DLT Resolution Inc 10-Q for FY2022 Q1

DLT Resolution Inc. (DLTI)

10-Q 2023-08-07 For: 2022-03-31

Added on April 06, 2026

About this 10-Q

DLT Resolution Inc filed this 10-Q on August 7, 2023, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $56.16K; down 38.6% from $91.44K a year earlier
Net loss: $992.53K; compared with a net loss of $180.3K a year earlier

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Nevada		20-8248213
(State of Incorporation)		(I.R.S. Employer Identification No.)

5940 S. Rainbow Blvd., Ste 400-32132, Las Vegas, NV		89118
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Non‑accelerated filer	☐
Accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☒

		Page
PART I FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations	4

	Condensed Consolidated Statements of Comprehensive Loss	5

	Condensed Consolidated Statements of Changes in Stockholders’ Deficit	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	15

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

DLT RESOLUTION, INC
Condensed Consolidated Balance Sheets
(Unaudited)

	March 31, 2022			December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	4,198		$	29,783
Accounts receivable, net of allowance for doubtful accounts of $35,000 and $0 at March 31, 2022 and December 31, 2021, respectively		14,496			49,129
Total current assets		18,694			78,912

Intangible assets, net of accumulated amortization		201,547			213,742
Assets from discontinued operations		121,052			1,066,003
Total assets	$	341,293		$	1,358,657

LIABILITIES AND STOCKHOLDERS’DEFICIT

Current liabilities
Accounts payable and accrued liabilities	$	266,118		$	207,588
Accounts payable, related party		15,000			15,000
Interest payable, related party		50,724			47,067
Related party payables		60,948			60,017
Notes payables, related party		81,500			81,500
Notes payable, current portion		32,046			31,306
Liabilities from discontinued operations		765,394			780,703

Total current liabilities		1,276,730			1,223,181

Notes payable, net of current portion		5,000			5,000
Total liabilities		1,276,730			1,228,181

Stockholders’ equity (deficit)
Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized; 0 issued and outstanding at March 31, 2022 and December 31, 2021		-			-
Series B convertible preferred stock, $1.00 par value; 500,000 shares authorized; 64,000 issued and outstanding at March 31, 2022 and December 31, 2021		64,000			64,000
Common stock, $0.001 par value; 275,000,000 shares authorized; 26,926,287 issued; 23,111,287 outstanding at March 31, 2022 and December 31, 2021		26,926			26,926
Common stock subscribed		14,000			14,000
Additional paid-in capital		6,762,010			6,762,010
Other comprehensive income		300,006			(182,345	)
Treasury stock, 3,815,000 shares as of March 31, 2022 and December 31, 2021, at cost		(5,300	)		(5,300	)
Accumulated deficit		(8,097,079	)		(6,548,815	)
Total stockholders’ equity (deficit)		(935,437	)		130,476

Total liabilities and stockholders’ equity (deficit)	$	341,293		$	1,358,657

See accompanying notes to unaudited condensed consolidated financial statements.

DLT RESOLUTION, INC.
Unaudited Condensed Consolidated Statements of Operations

	Three Months ended March 31,
	2022			2021
Revenue	$	56,156		$	91,435
Cost of revenue and operating expenses
Cost of revenue		37,376			43,340
General and administrative		49,287			22,047
Depreciation and amortization		16,730			26,451
Professional fees		5,116			11,228
Total operating expenses		108,509			103,066

Loss from operations		(52,353	)		(11,631	)

Other expense
Foreign exchange loss		(2	)		(45	)
Interest expense		(3,657	)		(1,844	)
Total other expense		(3,659	)		(1,889	)

Net loss from continuing operations	$	(56,012	)	$	(13,520	)

Loss from discontinued operations	$	(936,520	)	$	(166,783	)

Net loss	$	(992,532	)	$	(180,303	)

Loss per common share, basic and diluted	$	(0.04	)	$	(0.01	)

Weighted average shares outstanding, basic and diluted		26,926,287			25,926,287

See accompanying notes to unaudited condensed consolidated financial statements.

	Series B Preferred Stock				Common Stock				Common Stock		Additional Paid-in		Treasury			Other Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Subscribed		Capital		Stock			income			Deficit			Total
Balance, December 31, 2021		64,000	$	64,000		26,926,287	$	26,926	$	14,000	$	6,762,010	$	(5,300	)	$	(182,345	)	$	(6,548,815	)		130,476

Foreign currency translation adjustment		-		-		-		-		-		-		-			482,351			-			482,351

Loss on investment in Union Strategies Inc.		-		-		-		-		-		-		-			-			(555,732	)		(555,732	)

Net loss		-		-		-		-		-		-					-			(992,532	)		(992,532	)

Balance, March 31, 2022		64,000	$	64,000		26,926,287	$	26,926	$	14,000	$	6,762,010	$	(5,300	)	$	300,006		$	(8,097,079	)	$	(935,437	)

Balance, December 31, 2020		64,000	$	64,000		25,926,287	$	25,926	$	-	$	4,913,010	$	(5,300	)	$	816,396		$	(5,139,159	)	$	(368,300	)

Foreign currency translation adjustment		-		-		-		-		-		-		-			(31,543	)		-			(31,543	)

Loss on adjusted value of other long-term liability		-		-		-		-		-		-		-			(300,000	)		-			(300,000	)

Net loss		-		-		-		-		-		-		-			-			(180,303	)		(180,303	)

Balance March 31, 2021		64,000	$	64,000		25,926,287	$	25,926	$	14,000	$	4,913,010	$	(5,300	)	$	484,853		$	(5,319,462	)	$	177,027

DLT RESOLUTION, INC
Unaudited Condensed Consolidated Statements of Cash Flows

	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021

Cash flows from operating activities
Net loss from continuing operations	$	(56,012	)	$	(13,520	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense		16,730			26,451
Bad debt expense		35,000			-
Changes in operating assets and liabilities
Accounts receivable		(9,657	)		(27,724	)
Interest payable, related party		3,657			1,844
Accounts payable and accrued liabilities		7,401			14,927
Repayments to related parties		(21,196	)		(4,504	)
Net cash used in operating activities		(24,077	)		(2,526	)

Net cash used in investing activities		-			-

Cash flows from financing activities
Proceeds from bank overdrafts		-			11,817
Net cash provided by financing activities		-			11,817

Net change in cash		(24,077	)		9,291
Effect of exchange rate on cash		(1,507	)		117
Cash at beginning of period		29,782			4,557
Cash at end of period	$	4,198		$	13,965

Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

See accompanying notes to unaudited condensed consolidated financial statements.

	March 31, 2022			December 31, 2021

Developed technology	$	324,467		$	316,976
Customer relationships		104,150			101,745
Domain and trade name		4,006			3,913
Non-compete		37,654			36,785
Accumulated amortization		(268,730	)		(245,677	)
Total intangible assets, net	$	201,547		$	213,742

Expected future amortization expense related to identifiable intangibles based on our carrying amount as of March 31, 2022 for the following five years is as follows (in thousands):
For the Twelve Months ended March 31,
2023	$	67,183
2024		67,183
2025		67,181
2025		-
2027		-
Thereafter
	$	201,547

·	Adequacy of Accounting Systems at Meeting Company Needs — The accounting system in place at the time of the assessment lacks the ability to provide high quality financial statements from within the system, and there were no procedures in place or built into the system to ensure that all relevant information is secure, identified, captured, processed, and reported within the accounting system. Failure to have an adequate accounting system with procedures to ensure the information is secure and accurately recorded and reported amounts to a material weakness to the Company’s internal controls over its financial reporting processes.

·	Segregation of Duties — Management has identified a significant general lack of definition and segregation of duties throughout the financial reporting processes. Due to the pervasive nature of this issue, the lack of adequate definition and segregation of duties amounts to a material weakness to the Company’s internal controls over its financial reporting processes.

Exhibit No.		Description of Exhibit

31.1		Certification of Principal Executive Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended, filed herewith.
31.2		Certification of Principal Accounting Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended, filed herewith.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
101		Interactive data files pursuant to Rule 405 of Regulation S-T

DLT Resolution, Inc.

By:	/s/ John Wilkes	/s/ John Wilkes
	John Wilkes	John Wilkes
	President and Chief Executive Officer	Chief Financial Officer, Secretary and Treasurer
	(Principal Executive Officer)	(Principal Financial Officer)

	August 7, 2023	August 7, 2023

(1)	I have reviewed this report on Form 10-Q for the quarterly period ended March 31, 2022 of DLT Resolution, Inc.;

(2)	Based on my knowledge, this 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 report;

(3)	Based on my knowledge, the financial statements, and other financial information included in this 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 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 control 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 during the period in which this 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; and

	(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; and

	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2023

/s/ John Wilkes
John Wilkes
President and Chief Executive Officer
(Principal Executive Officer)