Beyond Commerce, Inc 10-Q for FY2022 Q3
Beyond Commerce, Inc. (BYOC)
About this 10-Q
Beyond Commerce, Inc filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).
Headline figures
Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $975.64K
- down 4.8% from $1.02M a year earlier
- Net loss
- $958.97K
- compared with a net loss of $1.45M a year earlier
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarter ended:
Or
For the Transition Period from ___________ to____________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or Other Jurisdiction of |
| (I.R.S. Employer |
Incorporation or Organization) |
| Identification No.) |
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(Address of Principal Executive Offices) | ||
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
None |
| None |
| None |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically a every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller reporting company | ||
| Emerging growth company | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of November 14, 2022, the registrant had
Table of Contents
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| Table of Contents |
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Beyond Commerce, Inc.
UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE THREE- AND NINE-MONTH PERIODS ENDED
September 30, 2022 & 2021
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| Table of Contents |
BEYOND COMMERCE, INC.
TABLE OF CONTENTS
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CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2022 & DECEMBER 31, 2021 (Unaudited) |
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
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| Table of Contents |
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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| September 30, |
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| December 31, |
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| 2021 |
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Current assets: |
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Cash & cash equivalents |
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Accounts receivable, net |
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Other current assets |
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Total current assets |
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Right of use asset – operating lease |
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Property, equipment, and software - net |
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Investments |
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Intangible asset - net |
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Goodwill |
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Total assets: |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
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Operating Lease Liability, current |
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Accrued Interest |
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Accrued Payroll & related items |
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Derivative liability |
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Short-term borrowings – net of discount |
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Short-term borrowings- related party |
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Total current liabilities |
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Long-term borrowings – net of discount |
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Operating lease liability, noncurrent |
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Total liabilities |
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Commitments and Contingencies |
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Stockholders’ Deficit: |
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Preferred stock series A, $ |
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Preferred stock series B, $ |
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Preferred Stock series C, $ |
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Common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
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Deficit attributable to Beyond Commerce, Inc Stockholders |
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Equity attributable to noncontrolling interest |
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Total stockholders' deficit |
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Total liabilities and stockholders' deficit |
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| $ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Table of Contents |
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE & NINE-MONTH ENDED SEPTEMBER 30,
(unaudited)
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| For the three months ended September 30, 2022 |
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| For the three months ended September 30, 2021 |
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| For the nine months ended September 30, 2022 |
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| For the nine months ended September 30, 2021 |
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Revenues |
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Operating expenses |
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Cost of revenue |
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Selling, general and administrative |
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Payroll expense |
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Professional Fees |
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Depreciation and amortization |
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Total operating expenses |
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Loss from operations |
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Non-operating income (expense) |
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Interest expense |
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Amortization of debt discount |
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Derivative related expenses |
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Change in derivative liability |
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Gain on forgiveness of PPP loan |
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Gain (loss) on extinguishment of debt |
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Total non-operating income (expense) |
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Loss from continuing operations before income tax |
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Provision for income tax |
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Consolidated net loss |
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Noncontrolling interest |
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Net Loss attributable to Beyond Commerce |
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Net income (loss) per common share-basic and diluted |
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Weighted average shares of capital outstanding (basic and diluted) |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
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| Table of Contents |
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30,
(Unaudited)
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| 2022 |
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| 2021 |
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Net loss |
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Cash flows from operating activities: |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock issued for services |
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Loss on derivative |
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Amortization of debt discount |
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Depreciation and amortization |
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Loss on extinguishment of debt |
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Gain on forgiveness of PPP loan |
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Interest expense – original interest discount |
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Change in derivative liability |
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Changes in assets and liabilities: |
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(Increase) decrease in accounts receivable |
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(Increase) decrease in other current assets |
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Increase (decrease) in accounts payable |
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Increase (decrease) in payroll liabilities |
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Increase (decrease) in other current liabilities |
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Net cash provided by (used in) in operating activities. |
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Cash flows from investing activities: |
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Cash flows from financing activities: |
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Cash receipts from note payable |
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Proceeds from sale of preferred stock Series C |
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Payment on note payable |
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Net cash provided by financing activities |
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Net increase (decrease) in cash and cash equivalents |
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Cash and cash equivalents, beginning balance |
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Cash and cash equivalents, ending balance |
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Supplemental Disclosure of Cash Flow Information: |
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Cash Paid For: |
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Interest |
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Income taxes |
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Summary of Non-Cash Investing and Financing Information: |
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Stock issued for conversion of debt |
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Stock issued for conversion of Series C preferred stock |
| $ |
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Stock issued in escrow for warrant settlement |
| $ |
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| $ |
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Stock issued in escrow for Letter of Intent |
| $ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Table of Contents |
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ DEFICIT
(Unaudited)
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| Preferred Stock A |
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| Preferred Stock B |
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| Preferred Stock C |
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| Common Stock |
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| Additional |
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| Total |
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| Par Value |
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| Par Value |
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| Paid in Capital |
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| Accumulated Deficit |
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| Controlling Interest |
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| Stockholders’ Deficit |
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Balance Year December 31, 2020 |
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Common stock issued for debt conversion |
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Preferred Series C issued |
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Preferred Series B issuance |
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Extinguishment of Debt |
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Extinguishment of derivative liabilities on conversion |
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Net loss |
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Balance March 31, 2021 |
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Common stock issued for conversion of preferred stock series C |
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Net Loss |
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Balance June 30, 2021 |
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| $ |
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Common stock issued for conversion of preferred stock series C |
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Common stock issued for warrants |
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Preferred stock Series B issued for services |
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Net Loss |
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Balance, September 30,2021 |
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Balance Year January 1, 2022 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
|
| $ | ( | ) | ||||||||||
Common Stock issued for employment agreement |
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| ( | ) |
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| |||
Common stock issued for conversion of preferred stock series C |
|
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| |||
Common stock issued for debt conversion |
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| ( | ) |
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Net loss |
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| ( | ) |
|
| ( | ) |
|
| ( | ) |
Balance March 31, 2022 |
|
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|
| $ |
|
|
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|
| $ |
|
|
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|
| $ |
|
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| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
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| $ | ( | ) | ||||||||||
Common Stock issued for Letter of Intent |
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Net Loss |
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| ( | ) |
|
| ( | ) |
|
| ( | ) |
Balance June 30, 2022 |
|
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|
| $ |
|
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|
| $ |
|
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| $ |
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| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
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| $ | ( | ) | ||||||||||
Common stock issued for conversion of preferred stock series C |
|
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| |||||
Net Loss |
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| ( | ) |
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| ( | ) |
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| ( | ) |
Balance, September 30, 2022 |
|
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| ( | ) |
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| ( | ) | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 8 |
| Table of Contents |
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
September 30, 2022
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Beyond Commerce, Inc. (the “Company”, “we” and “our”), has a planned business objective to develop, acquire, and deploy disruptive strategic software technology and market-changing business models through selling our own products and the acquisitions of existing companies. The Company currently owns and operates a data company and is actively seeking acquisition opportunities in high growth sectors such as psychedelics, cryptocurrency, ESports and Logistics among others.
Basis of Presentation
The condensed consolidated financial statements and the notes thereto for the periods ended September 30, 2022 and 2021 included herein include the accounts of the Company, its wholly-owned subsidiary Service 800 Inc., and Customer Centered Strategies, LLC (“CCS”), which the Company has an
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. All significant intercompany accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
NOTE 2. SELECTED ACCOUNTING POLICIES
Interim Financial Statements
These unaudited condensed consolidated financial statements as of and for the three (3) and nine (9) months ended September 30, 2022 and 2021, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America.
These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2021 and 2020, respectively, which are included in the Company’s December 31, 2021 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on March 31, 2022. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three (3) and nine (9) months ended September 30, 2022 are not necessarily indicative of results for the entire year ending December 31, 2022.
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Estimates are used in the determination of depreciation and amortization and the valuation for non-cash issuances of equity instruments, income taxes, and contingencies, among others. Actual results could differ materially from these estimates.
| 9 |
| Table of Contents |
Fair Value Measurements
|
| September 30, 2022 Fair Value Measurements |
| |||||||||||||
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| Level 1 |
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| Level 2 |
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| Level 3 |
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| Total Fair Value |
| ||||
Liabilities |
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| ||||
Derivative Liabilities |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Total |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
|
| December 31, 2021 Fair Value Measurements |
| |||||||||||||
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| Level 1 |
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| Level 2 |
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| Level 3 |
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| Total Fair Value |
| ||||
Liabilities |
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| ||||
Derivative Liabilities |
| $ |
|
| $ |
|
| $ |
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| $ |
| ||||
Total |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Derivative liability as of December 31, 2021 |
| $ |
| |
Change in derivative liability during the period |
|
|
| |
Balance at September 30, 2022 |
| $ |
|
Management considers all of its derivative liabilities to be Level 3 liabilities.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC Subtopic 606-10, Revenue Recognition. We recognize revenue as we transfer control of deliverables (products, solutions and services) to our customers in an amount reflecting the consideration to which we expect to be entitled. To recognize revenue, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. We account for a contract based on the terms and conditions the parties agree to, the contract has commercial substance and collectability of consideration is probable. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience.
The majority of the Company’s revenue is generated by the completion of a survey. Revenue is recognized and customers are billed at the point in time a survey occurs or when a related service is complete. The Company may require a deposit from new customers for set up costs or as down payments. These amounts are not significant to the financial statements.
Valuation of Derivative Instruments
ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts, and recognizes a net gain or loss on debt extinguishment.
| 10 |
| Table of Contents |
Management used the following inputs to value the Derivative Liabilities for the nine months ended September 30, 2022:
|
| September 30, 2022 Derivative Liability |
| |
Expected term |
|
| ||
Exercise price |
| $ |
| |
Expected volatility |
|
| % | |
Expected dividends |
| None |
| |
Risk-free rate |
|
| % | |
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics.
In August 2020, the Financial Accounting Standards Board (“FASB”) issued a new standard (ASU 2020-06) to reduce the complexity of accounting for convertible debt and other equity-linked instruments. The ASU simplifies accounting for convertible instruments by removing major separation models required under current Generally Accepted Accounting Principles (GAAP). Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. As a result, the new standard may affect net income and EPS, and therefore performance measures, and increase debt levels which may impact debt covenant compliance.
ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption will be permitted.
The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements. The Company has taken the position that any future standards will not be disclosed to the extent they are not material to our operations.
NOTE 3. GOING CONCERN
The Company’s financial statements are prepared using GAAP, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because of recent events, the Company cannot state with certainty of its ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has suffered losses from operations and has a working capital deficit, and negative cash flows from operations which raise substantial doubt about its ability to continue as a going concern. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in attempting to raise capital from additional debt and equity financing. Due to its nominal revenues, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue, including through the acquisition of Service 800 and CCS or through a merger transaction with a well-capitalized entity. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. If we are unable to obtain additional funds, or if the funds cannot be obtained on terms favorable to us, we will be required to delay, scale back or eliminate our plans to continue to develop and expand our operations or in the extreme situation, cease operations altogether.
| 11 |
| Table of Contents |
NOTE 4. INVESTMENTS
On November 23, 2021, the Company entered into a simple agreement for future equity (the “SAFE”) with Cityfreighter, Inc. (“Cityfreighter”), pursuant to which the Company invested $
On December 2, 2021 the Company executed a binding Letter of Intent (“LOI”) with Elettricars (of Italy) to attain the exclusive U.S. rights to its low-speed electric vehicle (“LSEV”). Elettricars is focused on manufacturing and commercializing a low-speed electric vehicle (“LSEV”), a 4-wheeled motor vehicle, not an ATV, with a top speed of 25 mph and weighs less than 3,000 lbs. The Company paid Elettricars an initial payment in the amount of $
On April 8, 2022, the Company executed a binding Letter of Intent (“LOI”) with Electric Built, Inc., headquartered in Inglewood, California. The acquisition will provide the Company exclusive access to Electric Built’s commercial business know-how, intellectual property, and business relationships and operations in electric vehicle fleet service. The Company paid Electric Built an initial payment in the amount of $
NOTE 5. SHORT- AND LONG-TERM BORROWINGS
Short-term and Long-term borrowings, consist of the following: |
| September 30, |
|
| December 31, |
| ||
Short term debt; |
| 2022 |
|
| 2021 |
| ||
Convertible Promissory Notes, bearing an annual interest rate of 24% secured, past due; derivative liability of $988,104 |
| $ |
|
| $ |
| ||
Short-Term Note – Jean Mork Bredeson cash deficit holdback, 15%, past due |
|
|
|
|
|
| ||
Short-Term Note – Jean Mork Bredeson purchase allocation, 15%, past due |
|
|
|
|
|
| ||
Promissory Note – bearing annual interest rate of 3.25% |
|
|
|
|
|
| ||
Convertible promissory note, related party interest rate 2.0%, past due |
|
|
|
|
|
| ||
Total short-term debt |
| $ |
|
| $ |
| ||
Long term debt; |
|
|
|
|
|
|
|
|
Funding from the SBA Program, annual interest of 3.75%, due 03/30/2051 |
|
|
|
|
|
| ||
Promissory Note – Jean Mork Bredeson, interest rate 5.5%, due 2/28/2022, past due |
|
|
|
|
|
| ||
Senior Secured Redeemable Debenture, bearing an annual interest rate of 16%, due 12/31/2021, long term, past due |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total short-term and long-term borrowings, before debt discount |
|
|
|
|
|
| ||
Less debt discount |
|
| ( | ) |
|
| ( | ) |
Total short-term and long-term borrowings, net |
| $ |
|
| $ |
| ||
Short-term and Long-term borrowings, consist of the following: |
|
|
|
|
|
|
|
|
Short-term borrowings – net of discount |
| $ |
|
| $ |
| ||
Long-term borrowings – net of discount |
|
|
|
|
|
| ||
Total Short-Term and long term borrowings – net of discount |
| $ |
|
| $ |
| ||
| 12 |
| Table of Contents |
On November 27, 2018, the Company received funding in conjunction with a convertible promissory note and a security purchase agreement dated November 27, 2018, in the amount of $
Effective February 28, 2019 as a component of the closing of the business combination between Beyond Commerce, Inc. and Service 800, Jean Mork Bredeson, Founder and President of Service 800, the Company issued a $
As a component of the Service 800 transaction, in lieu of the entire cash payment of $
On March 30, 2021 the Company through its Service 800 Inc. subsidiary, received $
On July 19, 2021, the Company issued a convertible promissory note (the “Note”) in favor of Geordan G. Pursglove, the Company’s Chairman and Chief Executive Officer, in the principal amount of $
On April 1, 2022, the Company entered into a promissory note (the “Note”) in favor of Discover Growth Fund, LLC (the “Discover”), in the aggregate principal amount of $
| 13 |
| Table of Contents |
NOTE 6. COMMON STOCK AND PREFERRED STOCK
Common Stock
As of September 30, 2022, our authorized capital stock consisted of
During the nine months ended, September 30, 2022, the Company issued
On April 8, 2022, the Company executed a binding Letter of Intent (“LOI”) with Electric Built, Inc. The Company paid Electric Built an initial payment in the amount of
Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
Preferred Stock
In March 2021, we approved authorization to issue up to
We have designated
The Series A Preferred Stock will, with respect to
We have designated
| 14 |
| Table of Contents |
With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series B Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Corporation’s Articles of Incorporation or by-laws. Such concentrated control of the Company may adversely affect the price of our common stock. A stockholder that acquires common stock will not have an effective voice in the management of the Company.
We have designated 50,000,000 shares of Series C Convertible Preferred Stock, par value of $
The Series C Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) pari passu with the Corporation’s Common Stock, $0.001 par value per share (“Common Stock”); (b) junior to all other series of Preferred Stock, as such may be designated as of the date of this Designation, or which may be designated by the Corporation after the date of this Designation (the “Other Preferred”), and (c) junior to all existing and future indebtedness of the Corporation.
Holders of the Series C Preferred Stock shall vote on all matters requiring a vote of the shareholders of the Corporation, together with the holders of shares of Common Stock and other classes of Preferred Stock entitled to vote, as a single class. Subject to the applicable beneficial ownership limitation, each Holder shall be entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s Preferred Shares would be convertible using the record date for determining the stockholders of the Corporation eligible to vote on such matters as the date as of which the number of Conversion Shares is calculated. Holders of the Series C Preferred Stock will also be entitled to vote as a separate class with respect to any matter as to which such voting rights are required by applicable law.
For the nine months ended September 30, 2022
For the nine months ended September 30, 2021 the Company issued
NOTE 7. COMMITMENTS AND CONTINGENCIES
Legal Matters –
A complaint against the Company, dated February 5, 2020, has been filed in Hennepin County, Minnesota, by Jean Mork Bredeson, the former President and former owner of Service 800, making certain claims related to
| 15 |
| Table of Contents |
The Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 5, states that a firm must distinguish between losses that are probable, reasonably probable or remote. If a contingent liability is deemed probable, it must be directly reported in the financial statements. In July 2010, the FASB issued ASC 450-20 that updated the Standard and uses “probable,” “reasonably possible,” and “remote” to determine the likelihood of the future event that will confirm a loss, an impairment of an asset, or the incurrence of a liability.
Accrual of a loss contingency is required when (1) it is probable that a loss has been incurred at the date of the financial statements and (2) the amount can be reasonably estimated. No accrual has been made in the above matter as the determination is that a loss is not probable as of September 30, 2022 nor can a loss be reasonably estimated.
In addition to the above, from time to time, we may be involved in litigation in the ordinary course of business. Other than as set forth above, we are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.
Coronavirus Pandemic
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States of America. The ultimate impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, which remain uncertain and cannot be predicted at this time. If the global response to contain the COVID-19 pandemic is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on the Company’s financial condition, results of operations and cash flows. Therefore, while we expect this matter to have an impact our business, the impact to our results of operations and financial position cannot be reasonably estimated at this time.
Russia-Ukraine conflict
The Russian-Ukraine conflict is a global concern. The Company does not have any direct exposure to Russia or Ukraine through its operations, employee base, investments or sanctions. We have no basis to evaluate the possible risks of this conflict.
Other than as set forth above, to our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Operating Lease
We currently lease virtual office space at 3773 Howard Hughes Parkway, Suite: 500 Las Vegas, NV 89169. We pay an annual fee of $
The public entity guidance in ASU 2016-02, Leases (Topic 842) requires lessees to recognize substantially all leases on their balance sheets as lease liabilities with a corresponding right-of-use asset. Our accounting policy is to keep leases with an initial term of 12 months or less off of the balance sheet.
| 16 |
| Table of Contents |
The Company leases office space under an operating lease. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease, right-of-use assets, and liabilities are recognized at the lease commencement date based on the present value of lease payments over the reasonably certain lease term. The implicit rates with the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The determination of the Company’s incremental borrowing rate requires judgement. The company determines its incremental borrowing rate for each lease using its then-current borrowing rate. Certain of the Company’s leases may include options to extend or terminate the lease. The Company establishes the number of renewal options periods used in determining the operating lease term based upon its assessment at the inception of the operating lease. The option to renew the lease may be automatic, at the option of the Company, or mutually agreed to between the landlord and the Company. Once the facility lease term has begun, the present value of the aggregate future minimum lease payments is recorded as a right-of-use asset.
Lease expense is recognized on a straight-line basis over the term of the lease. There are no options to extend or terminate the leases. The Company has no other leases yet to commence.
NOTE 8. RELATED PARTIES
On July 19, 2021, the Company issued a convertible promissory note (the “Note”) in favor of Geordan G. Pursglove, the Company’s Chairman and Chief Executive Officer, in the principal amount of $
During the first quarter of 2022, the Company issued
On September 29, 2022 Henry F. Gurley resigned from the Company’s Board of Directors to prevent a conflict of interest with his current employer.
NOTE 9. NET INCOME (LOSS) PER SHARE OF COMMON STOCK
The Company follows ASC 260-10, which requires presentation of basic and diluted Earnings per Share (“EPS”) on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying consolidated financial statements, basic net income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the year. Basic net income (loss) per common share is based upon the weighted average number of common shares outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Convertible debt that is convertible into
| 17 |
| Table of Contents |
The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the three and nine - month periods ended September 30, 2022 and 2021:
|
| Nine-month period ended September 30, |
|
| Three-month period ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Loss from continuing operations |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net loss |
| $ | ( | ) |
|
| ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Weighted average shares used for diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Incremental Diluted Shares |
|
| - | * |
|
| - | * |
|
| - | * |
|
| - | * |
Weighted Average shares used for diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: continuing operations |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Basic and Diluted: discontinued operations |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total Basic and Diluted loss per share |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
* | The shares associated with convertible debt, preferred stock, stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e., reduce the net loss per common share). |
NOTE 10. SUBSEQUENT EVENTS
Not Applicable
| 18 |
| Table of Contents |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for our products, and competition. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the throughout, the words “may”, “will”, “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management are intended to identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and we caution you that these statements are not guarantees of future performance or events and are subject to risks, assumptions, and other factors.
The following discussion provides information that management believes is relevant to an assessment and understanding of our past financial condition and plan of operations. The discussion below should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this annual report.
About Beyond Commerce
Beyond Commerce, Inc. was formed as a Nevada corporation on January 12, 2006.We are focused on business combinations of “big data” companies in global B2B internet marketing analytics, technologies and services. Our objective is to develop and deploy disruptive strategic software technology that will build on organic growth potential and to exploit cross-selling opportunities. We plan to offer a cohesive global digital product and services platform to provide clients with a single point of contact for their big data, marketing and related sales initiatives. We believe our business model will ensure that information will remain secure and private, as necessitated by the current market climate.
In addition, we provide solutions which facilitate the exchange of information and data transactions between supply chain participants, such as manufacturers, retailers, distributors and financial institutions, with the ultimate goal of automating potential client internal processes thereby increasing productivity and lowering costs. We plan to develop proprietary algorithms which it will embed in the planned software to enable clients to access data and gain insight into their business, through that data, leading to improved internal decision making.
We currently own and operate a data company and is actively seeking acquisition opportunities in high growth sectors such as psychedelics, cryptocurrency, ESports and Logistics among others. Our strategy is to identify companies in the early stages of development or growth, acquire them and provide these companies capital in order to accelerate their development and growth with the intention to ultimately sell these companies.
On April 8, 2022, we entered into a letter of intent (the “Letter of Intent”) with Electric Built Inc., a provider of electric vehicle design and engineering services (“Electric Built”), pursuant to which the Company will acquire the business of Electric Built (the “Transaction”). The Transaction shall provide the Company with exclusive access to Electric Built’s commercial business know-how and business connections and operations, with such structure to be negotiated by the parties. Consummation of the Transaction shall be subject to the execution of a mutually satisfactory definitive agreement by the Company and Electric Built (the “Definitive Agreement”). Pursuant to the Letter of Intent, in exchange for exclusivity in negotiating the transaction, the Company has issued $50,000 in shares of restricted common stock of the Company, to be released at Closing of the Definitive Agreement. Additionally, the Company has been given a right of first refusal to purchase the assets, intellectual property and all other assorted property of Electrogistics, Inc.
The Company and Electric Built entered into a Stock Purchase Agreement (the “SPA”) dated as of June 27, 2022, setting forth the definitive terms and condition for the Transaction, whereby the Company would acquire, for a balance of $950,000 in the form of shares of the Company’s common stock, all equity of Electric Built. Pursuant to the SPA, the SPA is subject to termination if due diligence review and required conditions for closing have not been satisfied by September 20, 2022 (the “Termination Date”).
On September 14, 2022, the Company and Electric Built entered into a First Amendment to the SPA (the “Amendment”), whereby the Termination Date was extended until October 31, 2022, and then, on October 24, 2022, Electric Built requested that the October 2022 Termination Date be extended (the “Extension”), to accommodate Electric Built’s need to relocate its operations, among other reasons. The Company has accepted such request and the SPA, as amended by the Amendment, is subject to the Extension,
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RESULTS OF OPERATIONS
Through our Service 800 Inc. subsidiary, many of our clients, such as GE Healthcare, Audiology System, Inc., 3M Healthcare, Johnson & Johnson Vision Care, Albany Molecular Research Inc., Sakura Finetek, Abbott Diagnostics, Biosense Webster, a Johnson & Johnson Company and Medtronic to name a few took the time during the pandemic to begin strategic planning with Service 800 to grow their business with the Company through renewals, expansion, and developing better ways to grow our programs with each and every one of them for the future. This select market segment continues to be a major source of revenue for the Company as we expand our services within this business segment. Renewals have been strong during the last nine months, and we anticipate revenue getting back in line with exceeding our expectations as we progress further into the year. All renewals that have taken place are on a minimum of a one to two-year term with an auto renewal taking place when the contract expires. The pandemic helped our customers recognize the value that Service 800 brings to its clients in the form of providing valuable information to not only help their growth within their own companies, but also help them be better providers to their customers as well. We continue to look forward to growth into each division of these companies and expansion to exceed expectations that have been set. We value these customers and seek to achieve positive growth we have set for the remainder of the year and moving onwards for future years to come.
For the Three Months Ended September 30, 2022 and September 30, 2021
Revenue
Revenue generated for the three months ended September 30, 2022 was $975,636 compared to $1,024,501 from the comparable three-month period in 2021.
Operating Expenses
For three months ended September 30, 2022, operating expenses were $1,300,442, and for the three months ended September 30, 2021, operating expenses were $1,540,241 in part to a reduction in professional fees of $218,885. Cost of revenues decreased by $29,164 due to a reduction in revenues and general and administrative expense increased by $13,545.
Non-Operating Income (Expense)
During the three months ended September 30, 2022, the Company incurred interest expense of $195,941 and recognized other expense in the change of the derivative liability of $442,811.
The Company incurred interest expense of $189,830, recognized an expense due to the change in derivative liability of $223,676 and recorded net expense relating to debt forgiveness, amortization of debt discount and loss on extinguishment of debt of $530,015 for the three months ended September 30, 2021.
Net Income (loss)
Loss from operations for the three months ended September 30, 2022 and 2021 was $324,806 and 515,740, respectively. For three months ended September 30, 2022, the Company incurred a net loss of $958,971 as compared to a net loss of $1,454,674 for the three months ended September 30, 2021 due to the reduction of operating costs as detailed above, and the loss on extinguishment of debt of $1,131,856, which occurred in 2021.
For the Nine Months Ended September 30, 2022 and September 30, 2021
Revenue
Revenue generated for the nine months ended September 30, 2022 was $3,023,137 compared to $3,258,619 from the comparable nine-month period in 2021
Operating Expenses
For nine months ended September 30, 2022, operating expenses were $4,281,799 and for the nine months ended September 30, 2021, operating expenses were $5,135,496. The Company’s cost of revenues decreased by $145,670 corresponding to a decrease in revenues in the comparable periods. The Company was able to achieve a reduction in professional fees of $581,523 and payroll expense of $78,140 during the nine months ended September 30, 2022 compared to the same period in 2021. General and administrative expenses increased by $7,227 and depreciation expense decreased by $55,591 in 2022 compared to the same nine-month period ended September 30, 2021.
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Non-Operating Income (Expense)
The Company reported non-operating expense of $984,191 for the nine months ended September 30, 2022, as compared to $6,928,746 for the nine months ended September 30, 2021 due mainly to the recording of derivative related expenses of $2,944,750, loss on extinguishment of debt of $5,088,555 and offset in part by the gain on the forgiveness of the PPP loan of $1,133,514 during the nine months ended September 30, 2021.
During the nine months ended September 30, 2022, the Company incurred interest expense of $534,952 and recognized other expense from the change of the derivative liability of $455,720.
Net Income (loss)
Loss from operations for the nine months ended September 30, 2022 and 2021 was $1,258,662 and 1,876,877, respectively due to the factors detailed above and noting that the derivative related expenses and loss on extinguishment of debt occurring in 2021 did not continue in 2022.
The net loss for the nine months ended September 30, 2022 and 2021 was $2,229,093 and $8,791,919, respectively.
Purchase of Significant Equipment
We do not anticipate the purchase or sale of any plant or significant equipment during the next twelve (12) months.
Going Concern
There is substantial doubt about our ability to continue as a going concern.
As of September 30, 2022, we had an accumulated deficit of $70,037,691 and a working capital deficit of $5,552,398. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to continue relying upon the issuance of debt and equity securities to finance our operations. In this regard, we are restricted by the number of shares available for issuance in an equity financing, and we will likely need to increase our authorized capital in order to take advantage of such financing. However, there can be no assurance that we will be successful in obtaining shareholder approval to increase our authorized capital, that we will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. Our financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern.
Liquidity and Capital Resources
Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan. Since inception, we have been funded by related parties through capital investment and borrowing of funds.
We had total current assets of $1,636,311 and $1,607,347 as of September 30, 2022 and December 31, 2021, respectively. Current assets would consist primarily of cash and accounts receivable. The Company had a $70,037,691 accumulated deficit on its balance sheet as of September 30, 2022.
We had total current liabilities of $7,191,709 and $5,414,772 as of September 30, 2022 and December 31, 2021, respectively. Current liabilities consisted primarily of the derivative liability, accounts payable, accrued payroll and payroll taxes, related party debt, conventional and convertible debt, lease liability, accrued loss contingency, and accrued interest. In the current nine months there were approximate increases in accrued interest of $417,000 and in accrued payroll liabilities of $45,000. Short-term borrowings – related party decreased by $150,000 due to the partial conversion on the note for stock. Short-term borrowings from nonrelated parties increased by $1,100,000 joined by a decrease in accounts payable of $75,000, a decrease in the current portion of the lease liability value of $16,000 and an increase in derivative liabilities of $455,720.
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We had a working capital deficit of $5,552,398 and $3,807,425 as of September 30, 2022 and December 31, 2021, respectively, which increase is mainly due to the net increase in short-term borrowings during the three months ended September 30, 2022.
Cash Flow from Operating Activities
For the nine months ended September 30, 2022 and 2021, cash used in operating activities was $959,652 and $1,464,373 respectively. This decrease of cash used is attributable to the decreased cash requirements for the operations of the Company which recorded a loss from operations of $1,258,662 for the nine months ended September 30, 2022 compared to $1,876,877 for the same period in 2021.
Cash Flow from Investing Activities
No cash was used in investing activities for the nine months ended September 30, 2022 and 2021.
Cash Flow from Financing Activities
For the nine months ended September 30, 2022 and 2021, cash provided by financing activities was $1,000,000 and $1,683,684, respectively, due to proceeds from notes payable of 1,000,000 and 775,000, respectively, and the sale of Series C Preferred Stock of $0 and $1,000,000, respectively.
Contractual Obligations
As a “smaller reporting company,” we are not required to provide tabular disclosure of contractual obligations.
Inflation
Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
Seasonality
In the past, our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, in the event that we succeed in bringing our planned products to market.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, we evaluate past judgments and our estimates, including those related to allowance for doubtful accounts, allowance for inventory write-downs and write offs, deferred income taxes, provision for contractual obligations and our ability to continue as a going concern. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
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Note 2 to the consolidated financial statements, presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, describes the critical accounting estimates and policies used in preparation of our consolidated financial statements. There were no significant changes in our critical accounting estimates during the three months ended September 30, 2022.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022. Based on the evaluation of our disclosure controls and procedures as of September 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls were not effective.
As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.
Changes in internal controls over financial reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Limitations on the Effectiveness of Controls
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its Principal Executive Officer and its Principal Financial Officer, do not expect that the Company’s controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
These inherent limitations include the realities that judgments in decision-making can be faulty, and these breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS –
A complaint against the Company, dated February 5, 2020, has been filed in Hennepin County, Minnesota, by Jean Mork Bredeson, the former President and former owner of Service 800, making certain claims related to the Company’s acquisition of Service 800, seeking in excess of $1.6 million in damages. On March 16, 2020, the Company and Service 800 filed an answer, counterclaim and third-party claim against Ms. Bredeson and defendants Allen Bredeson and Jeff Schwedinger, former employees of Service 800. Answers and Affirmative and Additional Defenses to Third Party Claims were filed by Ms. Bredeson on April 7, 2020 and by Mr. Schwedinger on April 9, 2020 and, on April 24, 2020, Ms. Bredeson filed a Motion to Dismiss. The Court denied in full Ms. Bredeson’s motion to dismiss or for a more definite statement. Subsequently, using a wholly owned entity she controls, Ms. Bredeson filed another matter, captioned Green Valley Associates Inc. vs Service 800 Inc., 27-CV-20-13800. Although Ms. Bredeson is seeking to have the matters handled by separate judges, the Company sought consolidation of the two matters before Judge Klein, the judge who denied Ms. Bredeson’s motion to dismiss, but the consolidation was denied. Discovery has closed in both cases. Trial commenced on October 3, 2022. After a week of trial, a technical mistrial occurred based on the Court falling under the minimum number of jurors required to maintain the trial. As a result, the trial is now scheduled for May, 2023.
The Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 5, states that a firm must distinguish between losses that are probable, reasonably probable or remote. If a contingent liability is deemed probable, it must be directly reported in the financial statements. In July 2010, the FASB issued ASC 450-20 that updated the Standard and uses “probable,” “reasonably possible,” and “remote” to determine the likelihood of the future event that will confirm a loss, an impairment of an asset, or the incurrence of a liability.
Accrual of a loss contingency is required when (1) it is probable that a loss has been incurred at the date of the financial statements and (2) the amount can be reasonably estimated. No accrual has been made in the above matter as the determination is that a loss is not probable as of September 30, 2022 nor can a loss be reasonably estimated.
In addition to the above, from time to time, we may be involved in litigation in the ordinary course of business. Other than as set forth above, we are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. Other than as set forth above, to our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect
ITEM 1A. RISK FACTORS.
We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission on March 31, 2022.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
There were no unregistered sales of equity securities during the period ended September 30, 2022.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
A Convertible Promissory Note, bearing an annual interest rate of 12% secured, due August 27, 2019 remains outstanding and is in default. There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any other indebtedness of the Company.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION
Henry Gurley resigned from the Board of Directors of the Company effective September 29, 2022. Such resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
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ITEM 6. EXHIBITS.
Exhibit Number |
| Exhibit Description |
| Form |
| Exhibit |
| Filing Date |
| Herewith |
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| 8-K |
| 10.1 |
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| 8-K |
| 10.2 |
| 9/16/2022 |
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| Rule 13a-14(a) Certification of Principal Executive Officer. |
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| Rule 13a-14(a) Certification of Principal Financial Officer. |
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101.INS |
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101.XSD |
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101.PRE |
| XBRL Presentation. |
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101.CAL |
| XBRL Calculation. |
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101.DEF |
| XBRL Definition. |
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101.LAB |
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* In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not deemed filed for purposes of Section 18 of the Exchange Act.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Beyond Commerce, Inc. |
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Dated: November 14, 2022 | By: | /s/ Geordan Pursglove |
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| Geordan Pursglove, President / CEO (Principal Executive Officer) |
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EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Geordan Pursglove, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Beyond Commerce, Inc.; |
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
| a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
| Date: November 14, 2022 | By: | /s/ Geordan Pursglove | |
| Geordan Pursglove Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Peter M. Stazzone, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Beyond Commerce, Inc.; |
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
| Date: November 14, 2022 | By: | /s/ Peter M. Stazzone | |
| Peter M. Stazzone Chief Financial Officer (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report of Beyond Commerce, Inc. (the “Company”), on Form 10-Q for the period ended September 30, 2022, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Geordan Pursglove, Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | Such Quarterly Report on Form 10-Q for the period ended September 30, 2022, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2022, fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: November 14, 2022 | By: | /s/ Geordan Pursglove | |
| Geordan Pursglove | |||
| Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report of Beyond Commerce, Inc. (the “Company”), on Form 10-Q for the period ended September 30, 2022, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Peter M. Stazzone, Chief Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | Such Quarterly Report on Form 10-Q for the period ended September 30, 2022, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2022, fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: November 14, 2022 | By: | /s/ Peter M. Stazzone | |
| Peter M. Stazzone | |||
| Chief Financial Officer (Principal Financial and Accounting Officer) |