UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the quarterly period For the transition period from Commission File Number: VIRTUAL INTERACTIVE TECHNOLOGIES CORP. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 600 17 Denver, CO80202 (Address of principal executive offices, including Zip Code) (303)228-7120 (☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of 1934☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act Of 1934 ended August 31, 2017☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act Of 1934☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act Of 1934 ________________________ to ______________0-23726MASCOTA RESOURCESNoneNEVADA29409 232ndth Ave. SEBlack Diamond, WA 98010 (AddressStreet, Suite 2800 South(206)-818-4799Issuer'sIssuer’s telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ ☒ No ☒
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☐ ☒ No ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "non-accelerated” “non-accelerated filer,"” “smaller reporting company,” and "smaller reporting company"“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||
Non-accelerated filer | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
If an emerging growth company, indicate by checkmark 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.Act ☐
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 | N/A | N/A |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No☒ No ☐
State the number of shares outstanding of each of the issuer'sissuer’s classes of common equity, as of the latest practicable date: 3,890,750 shares of common stock as of October 18, 2017.
Virtual Interactive Technologies Corp.
Index
2 |
MASCOTA RESOURCES CORP. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Stated in US Dollars) | ||||||||
(Unaudited) | ||||||||
August 31, | November 30, | |||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 2,546 | $ | 1,172 | ||||
Total Current Assets | 2,546 | 1,172 | ||||||
Total Assets | $ | 2,546 | $ | 1,172 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
LIABILITIES | ||||||||
Current Liabilities | ||||||||
Accounts Payable | $ | 4,762 | $ | 9,016 | ||||
Accrued Interest | 76 | - | ||||||
Accrued Interest, Related Party | 438 | - | ||||||
Convertible Note Payable | 5,000 | - | ||||||
Convertible Note Payable, Related Party | 10,000 | - | ||||||
Total Current Liabilities | 20,276 | 9,016 | ||||||
Total Liabilities | 20,276 | 9,016 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Preferred Stock, $0.01 par value, 10,000,000 shares authorized, | 500 | 500 | ||||||
50,000 issued and outstanding | - | - | ||||||
Common Stock, $0.001 par value, 90,000,000 shares authorized, | ||||||||
3,890,750 shares issued and outstanding | 3,891 | 3,891 | ||||||
Additional paid-in capital | 156,003 | 156,003 | ||||||
Accumulated deficit | (178,124 | ) | (168,238 | ) | ||||
Total Stockholders' Deficit | (17,730 | ) | (7,844 | ) | ||||
Total Liabilities and Stockholders' Deficit | $ | 2,546 | $ | 1,172 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Balance Sheets
As of June 30, 2022 and September 30, 2021
(UNAUDITED)
June 30, 2022 | September 30, 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 72,684 | $ | 251,064 | ||||
Royalties receivable | 89,628 | 115,830 | ||||||
Convertible note receivable | 7,500 | - | ||||||
Interest receivable | 4,687 | 3,340 | ||||||
Note receivable | 25,000 | 25,000 | ||||||
Total current assets | 199,499 | 395,234 | ||||||
Convertible note receivable | - | 7,500 | ||||||
Total non-current assets | - | 7,500 | ||||||
TOTAL ASSETS | $ | 199,499 | $ | 402,734 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued liabilities | $ | 2,300 | $ | 37,014 | ||||
Note payable, related party | 741,030 | - | ||||||
Interest payable, related party | 209,969 | - | ||||||
Notes payable, net of discounts | 149,828 | 62,375 | ||||||
Interest payable | 18,138 | 2,091 | ||||||
Total current liabilities | 1,121,265 | 101,480 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Note payable, related party | - | 741,030 | ||||||
Interest payable, related party | - | 167,597 | ||||||
Note payable | 10,000 | - | ||||||
Interest payable | 1,969 | - | ||||||
Total long-term liabilities | 11,969 | 908,627 | ||||||
Total liabilities | 1,133,234 | 1,010,107 | ||||||
Commitments and contingencies | - | - | ||||||
STOCKHOLDERS’ DEFICIT | ||||||||
Series A Preferred Stock, $ | par value; authorized; shares issued and outstanding500 | 500 | ||||||
Series B Convertible Preferred Stock $ | par value; authorized; and shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively2,706 | 5,956 | ||||||
Preferred stock, value | ||||||||
Common stock, $ | par value; shares authorized, shares issued and shares outstanding at June 30, 2022, and shares issued and outstanding as of September 30, 20217,599 | 6,900 | ||||||
Additional paid-in-capital | 5,351,898 | 4,518,347 | ||||||
Treasury stock (0 cost) | and shares at June 30, 2022 and September 30, 2021 respectively, $- | - | ||||||
Accumulated deficit | (6,296,438 | ) | (5,139,076 | ) | ||||
Total stockholders’ deficit | (933,735 | ) | (607,373 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 199,499 | $ | 402,734 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3 |
MASCOTA RESOURCES CORP. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(Stated in US Dollars) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, | August 31, | |||||||||||||||
2017 | 2016 | �� | 2017 | 2016 | ||||||||||||
Revenue | $ | - | $ | - | $ | - | $ | - | ||||||||
Operating Expenses | ||||||||||||||||
General and administrative | 2,032 | 10,806 | 9,372 | 11,017 | ||||||||||||
Total Operating Expenses | 2,032 | 10,806 | 9,372 | 11,017 | ||||||||||||
Operating loss | (2,032 | ) | (10,806 | ) | (9,372 | ) | (11,017 | ) | ||||||||
Interest expense | 227 | 316 | 514 | 2,295 | ||||||||||||
Net loss | $ | (2,259 | ) | $ | (11,122 | ) | $ | (9,886 | ) | $ | (13,312 | ) | ||||
Loss per share, basic and fully diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted average number of shares outstanding - basic and fully diluted | 3,890,750 | 3,497,913 | 3,890,750 | 3,233,120 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Statements of Operations
For the three and nine months ended June 30, 2022 and 2021
(UNAUDITED)
2022 | 2021 | 2022 | 2021 | |||||||||||||
For the three months ended, | For the nine months ended, | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue – royalties | $ | 20,689 | $ | 35,767 | $ | 80,719 | $ | 130,898 | ||||||||
Operating expenses: | ||||||||||||||||
General, administrative and selling | 523,282 | 48,352 | 836,879 | 175,383 | ||||||||||||
Research and development | 16,539 | - | 16,539 | - | ||||||||||||
Total operating expenses | 539,821 | 48,352 | 853,418 | 175,383 | ||||||||||||
Loss from operations | (519,132 | ) | (12,585 | ) | (772,699 | ) | (44,485 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Other income | 449 | 449 | 1,347 | 1,300 | ||||||||||||
Amortization of debt discount | (117,764 | ) | - | (310,203 | ) | - | ||||||||||
Interest expense, related party | (14,084 | ) | (12,300 | ) | (42,373 | ) | (36,899 | ) | ||||||||
Interest expense | (16,741 | ) | (150 | ) | (32,784 | ) | (449 | ) | ||||||||
Gain (loss) from foreign currency transactions | (79 | ) | (5 | ) | (650 | ) | 620 | |||||||||
Total other income (expense) | (148,219 | ) | (12,006 | ) | (384,663 | ) | (35,428 | ) | ||||||||
Net loss | $ | (667,351 | ) | $ | (24,591 | ) | $ | (1,157,362 | ) | $ | (79,913 | ) | ||||
Loss per share, basic and diluted | $ | (0.09 | ) | $ | 0.00 | $ | (0.16 | ) | $ | (0.01 | ) | |||||
Weighted average number of shares outstanding, basic and diluted | 7,369,188 | 6,817,784 | 7,083,577 | 6,817,784 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4 |
MASCOTA RESOURCES CORP. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Stated in US Dollars) | ||||||||
(Unaudited) | ||||||||
Nine Months Ended | ||||||||
August 31, | ||||||||
2017 | 2016 | |||||||
Cash Flows from Operating Activities | ||||||||
Net loss | $ | (9,886 | ) | $ | (13,312 | ) | ||
Change in operating assets and liabilities: | ||||||||
Accounts payable | (4,254 | ) | (4,751 | ) | ||||
Accrued interest | 76 | - | ||||||
Accrued interest, related parties | 438 | 2,298 | ||||||
Net Cash (Used by) Operating Activities | (13,626 | ) | (15,765 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Net Cash (Used by) Investing Activities | - | - | ||||||
Cash Flows from Financing Activities | ||||||||
Convertible note payable | 5,000 | - | ||||||
Convertible note payable, related party | 10,000 | 20,150 | ||||||
Net Cash Provided by Financing Activities | 15,000 | 20,150 | ||||||
Net increase in cash | 1,374 | 4,385 | ||||||
Cash at beginning of period | 1,172 | 3,600 | ||||||
Cash at end of period | $ | 2,546 | $ | 7,985 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
Cash paid for: | ||||||||
Interest | $ | - | $ | - | ||||
Income taxes | $ | - | $ | - | ||||
Conversion of shareholders notes into common and preferred stock | $ | - | $ | 71,254 | ||||
Forgiveness of accrued interest on shareholder notes | $ | - | $ | 4,708 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Statements of Changes in Stockholders’ Deficit
For the three and nine months ended June 30, 2022 and 2021
(UNAUDITED)
For the three months ended June 30, 2022
Preferred Stock | ||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B Convertible | Common Stock | Additional | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Par Value | Shares | Par Value | Paid In Capital | Shares | Cost | Accumulated Deficit | Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||
Balance March 31,2022 | 50,000 | $ | 500 | 595,612 | $ | 5,956 | 7,001,534 | $ | 7,002 | $ | 4,817,495 | 41,250 | $ | - | $ | (5,629,087 | ) | $ | (798,134 | ) | ||||||||||||||||||||||||
Stock issued for commitment fee debt discount on note payable | - | - | - | - | 82,500 | 82 | 206,168 | - | - | - | 206,250 | |||||||||||||||||||||||||||||||||
Stock issued for cash | - | - | - | - | 30,000 | 30 | 37,470 | - | - | - | 37,500 | |||||||||||||||||||||||||||||||||
Conversion of preferred B stock to common stock | - | - | (325,000 | ) | (3,250 | 325,000 | 325 | 2,925 | - | - | - | - | ||||||||||||||||||||||||||||||||
Stock issued for services | - | - | - | - | 160,000 | 160 | 287,840 | - | - | - | 288,000 | |||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | (667,351 | ) | (667,351 | ) | |||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 50,000 | $ | 500 | 270,612 | $ | 2,706 | 7,599,034 | $ | 7,599 | $ | 5,351,898 | 41,250 | $ | - | $ | (6,296,438 | ) | $ | (933,735 | ) |
For the three months ended June 30, 2021
Preferred Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||
Series A | Series B Convertible | Common Stock | Additional | Total | ||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Par Value | Shares | Par Value | Paid-In Capital | Accumulated Deficit | Stockholders’ Deficit | ||||||||||||||||||||||||||||
Balance, March 31, 2021 | 50,000 | $ | 500 | 595,612 | $ | 5,956 | 6,817,784 | $ | 6,817 | $ | 4,353,430 | $ | (5,075,377 | ) | $ | (708,674 | ) | |||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (24,591 | ) | (24,591 | ) | |||||||||||||||||||||||||
Balance, June 30, 2021 | 50,000 | $ | 500 | 595,612 | $ | 5,956 | 6,817,784 | $ | 6,817 | $ | 4,353,430 | $ | (5,099,968 | ) | $ | (733,265 | ) |
For the nine months ended June 30, 2022
Preferred Stock | ||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B Convertible | Common Stock | Additional | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Par Value | Shares | Par Value | Paid-In Capital | Shares | Cost | Accumulated Deficit | Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||
Balance September 30, 2021 | 50,000 | $ | 500 | 595,612 | $ | 5,956 | 6,900,284 | $ | 6,900 | $ | 4,518,347 | - | $ | - | $ | (5,139,076 | ) | $ | (607,373 | ) | ||||||||||||||||||||||||
Stock issued for services | - | - | - | - | 220,000 | 220 | 380,780 | - | - | - | 381,000 | |||||||||||||||||||||||||||||||||
Stock issued for cash | - | - | - | - | 30,000 | 30 | 37,470 | - | - | - | 37,500 | |||||||||||||||||||||||||||||||||
Stock issued for commitment fee debt discount on note payable | - | - | - | - | 165,000 | 165 | 412,335 | - | - | - | 412,500 | |||||||||||||||||||||||||||||||||
Redemption of previously issued commitment shares | - | - | - | - | (41,250 | ) | (41 | ) | 41 | 41,250 | - | - | - | |||||||||||||||||||||||||||||||
Conversion of preferred B stock to common stock | - | - | (325,000 | ) | (3,250 | ) | 325,000 | 325 | 2,925 | - | - | - | - | |||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | (1,157,362 | ) | (1,157,362 | ) | |||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 50,000 | $ | 500 | 270,612 | $ | 2,706 | 7,599,034 | $ | 7,599 | $ | 5,351,898 | 41,250 | $ | - | $ | (6,296,438 | ) | $ | (933,735 | ) |
For the nine months ended June 30, 2021
Preferred Stock | Preferred Stock | Additional | Total | |||||||||||||||||||||||||||||||||
Series A | Series B Convertible | Common Stock | Paid-In Capital | Accumulated | Stockholders’ Deficit | |||||||||||||||||||||||||||||||
Balance, September 30, 2020 | 50,000 | $ | 500 | 595,612 | $ | 5,956 | 6,817,784 | $ | 6,817 | $ | 4,353,430 | $ | (5,020,055 | ) | $ | (653,352 | ) | |||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (79,913 | ) | (79,913 | ) | |||||||||||||||||||||||||
Balance, June 30, 2021 | 50,000 | $ | 500 | 595,612 | $ | 5,956 | 6,817,784 | $ | 6,817 | $ | 4,353,430 | $ | (5,099,968 | ) | $ | (733,265 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Statements of Cash flows
For the Nine Months Ended June 30, 2022 and 2021
(UNAUDITED)
2022 | 2021 | |||||||
For the nine months ended, | ||||||||
June 30, | June 30, | |||||||
2022 | 2021 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (1,157,362 | ) | $ | (79,913 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Stock issued for services | 381,000 | - | ||||||
Debt discount amortization | 310,203 | - | ||||||
Changes in operating assets and operating liabilities: | ||||||||
Interest receivable | (1,347 | ) | (1,301 | ) | ||||
Royalty receivable | 26,202 | 66,912 | ||||||
Accounts payable and accrued liabilities | (34,714 | ) | (4,970 | ) | ||||
Accounts payable, related parties | - | (5,994 | ) | |||||
Accrued interest payable, related parties | 42,372 | 36,898 | ||||||
Accrued interest payable | 18,016 | 448 | ||||||
Net cash (used in) provided by operating activities | (415,630 | ) | 12,080 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Advances to non-related party | - | (7,500 | ) | |||||
Net cash used in investing activities | - | (7,500 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from notes payable | 434,750 | - | ||||||
Proceeds from sale of common stock | 37,500 | - | ||||||
Payment to notes payable, related parties | (235,000 | ) | - | |||||
Net cash provided by financing activities | 237,250 | - | ||||||
Net change in cash and cash equivalents | (178,380 | ) | 4,580 | |||||
Cash and cash equivalents, beginning of period | 251,064 | 36,244 | ||||||
Cash and cash equivalents, end of period | $ | 72,684 | $ | 40,824 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Interest paid | $ | 14,769 | $ | - | ||||
Income taxes paid | $ | - | $ | - | ||||
Non-cash Investing and Financing Activities: | ||||||||
Debt discount on notes payable | $ | 35,250 | $ | - | ||||
Stock issued for commitment fee debt discount on note payable | $ | 412,500 | $ | - | ||||
Redemption of commitment shares as treasury stock at $0 cost | $ | - | $ | - |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6 |
VIRTUAL INTERACTIVE TECHNOLOGIES CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
For the Three and Nine Months Ended
June 30, 2022
Note 1 1. Basis of presentation
While the information presented in the accompanying August 31, 2017June 30, 2022 financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the periodperiods presented in accordance with the accounting principles generally accepted in the United StateStates of America.America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustmentadjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company's NovemberCompany’s September 30, 20162021 audited financial statements (and notes thereto). Operating results for the three and nine months ended August 31, 2017June 30, 2022 are not necessarily indicative of the results that can be expected for the year ending NovemberSeptember 30, 2017.
The accompanying unaudited condensed consolidated financial statements herein contain the operations of Virtual Interactive Technologies Corp (“VRVR”), and its wholly-owned subsidiaries Advanced Interactive Gaming Inc. (“AIG Inc.”) and Advanced Interactive Gaming Ltd. (“AIG Ltd”) (collectively, the “Company”). All significant intercompany amounts have been eliminated.
Note 2 2. Business
Nature of Operations
Advanced Interactive Gaming, Ltd. (“AIG Ltd”) was incorporated in Bermuda on September 19, 2016, and is in the business of assisting in the development of video games through investments and royalty contracts. AIG Ltd had several royalty contracts with video game development companies during the past three years.
On September 24, 2019, AIG Ltd was acquired by Advanced Interactive Gaming, Inc. (“AIG Inc”), a Colorado Corporation, through a reverse recapitalization and share exchange agreement. After the transaction, AIG Ltd became a wholly owned subsidiary of AIG Inc.
Virtual Interactive Technologies Corp. (f/k/a Mascota Resources, Corp. ("the Company," "we," "us," or "our") was incorporated in the stateState of Nevada on November 3, 2011. On September 25, 2019, Mascota Resources, Corp. effected a name change to Virtual Interactive Technologies Corp. (“VRVR”), and a 20:1 reverse stock split applicable to all existing VRVR shareholders of record. The Company is an exploration stage company and was formed foreffects of the purpose of acquiring exploration and development stage mineral properties.
On November 9, 2011, the Company incorporatedSeptember 27, 2019, AIG Inc effected a reverse recapitalization via a share exchange agreement with VRVR, resulting in AIG Inc becoming a wholly-owned subsidiary MRC Exploration LLC ("MRC"),of VRVR.
VRVR finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the State of Nevada for the purpose of mineral exploration.
The Company's business planCompany’s strategy moving forward is to proceed withcontinue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the acquisition and exploration of feasible mineral claims to determine whether there are commercially exploitable reserves of gold, silver and uranium. The Company's geological consulting firm is well-experiencedrelatively early stage in the mineral exploration businessproduct cycle and will provide us with the expected costs of explorationgrowing need for content to determine the commercial viability of the prospect.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principlesUS GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
Cash Equivalents
The Company considers all short term investmentshighly liquid instruments purchased with an original maturitymaturities of three months or less to be cash equivalents.
7 |
Fair Value of Financial Instruments
The Company accounts for income taxes under the liability method, which requires recognitionfair value measurements in accordance with accounting standard ASC 820-10-50, “Fair Value Measurements.” ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of deferred taxfair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
- | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
- | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
- | Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |
The Company’s financial instruments consist of cash, royalties receivable, notes receivable and related accrued interest receivable, accounts payable and accrued expenses, and notes payable and related accrued interest payable. The carrying value of these financial instruments approximates fair value due to the short-term nature of the instruments.
Research and Development
The costs incurred for the expecteddevelopment of computer software to be sold, leased, or otherwise marketed are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed. The Company expenses all research and development costs incurred prior to technological feasibility. Capitalization is required when technological feasibility has been established, which generally occurs when all planning, design, coding and testing activities are completed that are necessary to establish that the product can be produced to meet its design specifications, including functions, features and technical performance requirements. The establishment of technological feasibility is an ongoing assessment of judgment by management with respect to certain external factors, including, but not limited to, anticipated future tax consequencesrevenues, estimated economic life and changes in technology. Capitalized software includes direct labor and related expenses for software development for new products and enhancements to existing products and acquired software.
Amortization of events that have been includedcapitalized software development costs begins when the product is available for general release. Amortization is provided on a product-by-product basis using the straight-line method over periods between 3 to 5 years. Unamortized capitalized software development costs determined to be in excess of the financial statements or tax returns. Under this method, deferred tax assets and liabilitiesnet realizable value of the product are determinedexpensed immediately.
Capitalized software costs are subject to an ongoing assessment of recoverability based on anticipated future revenues and changes in software technologies at least annually at September 30, and whenever events or circumstances make it more likely than not that impairment may have occurred. In the difference betweenevent of impairment, unamortized capitalized software costs are compared to the financial statementsnet realizable value of the related product and tax basesthe carrying value of the related assets are written down to the net realizable value to the extent the unamortized capitalized costs exceed such value. The net realizable value is the estimated future gross revenues from the related product reduced by the estimated future costs of completing and liabilities using enacted tax ratesdisposing of such product, including the costs of providing related maintenance and customer support, which costs are expensed as incurred.
On May 20, 2022, the Company entered into a letter of intent with Hammer Slammer Games GmbH of Berlin Germany to develop a mobile game called Micro Card Battler. As part of the agreement, the Company made an initial payment of $16,539 which was expensed as research and development expense that is considered a work in effect forprogress product as of June 30, 2022. The Company had no capitalizable research and development costs during the year in which the differences are expected to reverse. Current tax benefits are offset by a valuation reserve as they are considered not likely to be realized in the foreseeable future.
In accordance with FASB ASC Topic 260 "Earnings“Earnings per Share,"” the basic earningsnet income (loss) per share ("EPS"(“EPS”) is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS givesis computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding adjusted on an “if-converted” basis (for convertible preferred stock). During the period ended June 30, 2022, shares of the Series B Convertible Preferred stock were converted into shares of common stock. During the periods ended June 30, 2022 and 2021, the Company had and shares, respectively, of Series B Convertible Preferred stock issued and outstanding that are convertible into shares of common stock. These potentially dilutive securities were excluded from the EPS computation due to their anti-dilutive effect resulting from the Company’s net losses during the three and nine months ended June 30, 2022.
Foreign Currency
The Company’s functional currency is the US dollar. With the exception of stockholders’ equity (deficit), all transactions that are originally denominated in foreign currency are translated to US dollars by our international customers, on a monthly basis, when recognized by them and prior to paying royalties to the Company. All royalty revenues that are received and recognized by the Company are recorded in US dollars.
The Company has a Euro currency bank account located in Bermuda. This account is used for payments to vendors that bill the Company in a currency other than US dollars and for funds received from shareholders located outside the United States. As of June 30, 2022 and September 30, 2021, the Euro account had a balance of $0 and $0 Euros, respectively.
Foreign currency translation gains/losses are recorded in other accumulated comprehensive income (“AOCI”) based on exchange rates prevalent on reporting dates for balance sheet items, and at weighted average exchange rates during the reporting period for the statement of operations. Foreign currency transaction gains/losses are recorded as other income (expense) in the period of settlement. No AOCI items were present during the nine months ended June 30, 2022 and 2021, as all dilutive potentialfinancial statement items were denominated in the US dollar. (Losses) gains from foreign currency transactions during the nine months ended June 30, 2022 and 2021 totaled ($650) and $620, respectively.
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Concentration of Credit Risk
Some of our US dollar balances are held in a Bermuda bank that is not insured. As of June 30, 2022 and September 30, 2021, uninsured deposits in the Bermuda bank totaled $20,495 and $20,616, respectively. Our management believes that the financial institution is financially sound, and the risk of loss is low. The Company is in the process of migrating its banking to the institutions in the United States, which are insured by the FDIC up to $250,000.
Revenue Recognition
The Company follows the guidance contained in ASC 606, “Revenue Recognition.” The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 outlines the following five-step revenue recognition model (along with other guidance impacted by this standard): (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; (5) recognize revenue when or as the entity satisfies a performance obligation.
Revenue - Royalties
The Company enters into agreements with third-party developers that require us to make payments for game development and production services. In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished game titles as well as, in some cases, the underlying intellectual property rights. The Company has several contracts with video game developers that entitle us to royalty streams as a percentage of revenues generated by the game sales, which vary from contract to contract. As of June 30, 2022, the Company has four royalty contracts with three developers that are generating royalty revenue.
Once a game has been developed and has met the terms of the underlying royalty agreement, the game is released for commercial sales. Per each contract, the Company will receive reports on a regular basis from the game developers’ sales platforms that identify the amount of game sales, from which consideration expected to be collected from the commercial customers is computed based on the applicable royalty percentages. Royalty revenue is based on a percentage of net receipts as defined in each customer agreement, and is recognized in accordance with the sale-based royalty provisions of ASC 606, which requires revenue recognition after the subsequent sales occur. The Company’s performance obligation under each royalty contract as an investor in the game is complete once funds are advanced to the gaming developer. Subsequent consideration is then received by the Company from the developers in the amount of the Company’s percentage fee of royalty income (net receipts) received by the customer. Net receipts include all gross revenues received by the customer as a result of sales of the games or related exploitation less certain taxes, refunds, manufacturing costs, freight, and other items specified in the underlying contract.
During the nine months ended June 30, 2022 and 2021, the Company recognized revenue from royalties of $80,719 and $130,898, respectively.
Royalties Receivable
The Company provides an allowance for doubtful accounts equal to the estimated uncollectible royalties. The Company’s estimate is based on historical collection experience and a review of the current status of royalties receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change and that losses ultimately incurred could differ materially from the amounts estimated in determining the allowance. The Company had royalties receivable of $89,628 and $115,830 at June 30, 2022 and September 30, 2021, respectively, and has determined that no allowance is necessary.
New Accounting Pronouncements
The Company has evaluated all recently issued or enacted accounting pronouncements, and has determined that all such pronouncements either do not apply or their impact is insignificant to the financial statements.
COVID-19 Uncertainties
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates the Company’s continuation as a going concern. The Company has not established profitable operations and has incurred significant losses since its inception. The Company’s plan is to grow significantly over the next few years through strategic game development partnerships, through internal game development and through the acquisition of independent game development companies globally.
The Company has taken much of the cash flow from its first royalty agreement and has invested in royalty agreements for the development of several other video games. By continuing to reinvest these royalties into agreements to develop new games, along with actively managing corporate overhead, management’s plan is to substantially increase its video game royalty portfolio and cash flow over the next several years. The Company intends to continue to grow its game portfolio over the next several years, focusing on console games, virtual reality games and mobile games.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or debt financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or debt financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.
Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
Note 3. Stockholders’ Equity (Deficit)
The Company’s common stock is quoted under the symbol “VRVR” on the OTC Pink tier operated by OTC Markets Group, Inc. To date, an active trading market for the Company’s common stock has not developed.
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Treasury Stock
The Company accounts for treasury stock using the cost method. During the nine months ended June 30, 2022, the Company acquired 0 cost of its then-issued and outstanding common stock pursuant to a claw-back provision in one of its notes payable (Note 4). At June 30, 2022 and September 30, 2021, the Company held in treasury and shares, respectively, at total cumulative cost of $0. shares at $
Common Stock
The Company is authorized to issue duringwith shares held as treasury stock. At September 30, 2021, the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential ofCompany had shares of common stock issued and outstanding. shares of common stock at par value of $ . At June 30, 2022, the Company had shares issued and shares outstanding,
On September 23, 2021, the Company issued 165,000 as a commitment fee related to a note payable (Note 4). The commitment fee was recorded as an additional discount to the note and was amortized over the life of the note. On March 24, 2022, the note payable and remaining accrued interest was paid off in full in the amount of $235,000 and $1,958. As per the terms of the contract, the Company recorded a claw back of half of the common shares associated with the commitment fee in the amount of shares that are being held in treasury at $0 cost. shares of common stock valued at $
On December 3, 2021, the Company issued shares to two of our directors for director compensation. Jerry Lewis received 93,000 was recorded for the issuance of these shares. shares and Janelle Gladstone received shares. The closing price of our common stock on the grant date was $ per share, and an expense of $
On March 15, 2022, the Company issued 206,250 as a commitment fee related to a note payable (Note 4). The commitment fee was recorded as an additional discount to the note and is being amortized over the life of the note. shares of common stock valued at $
On April 4, 2022, the Company issued 206,250 as a commitment fee related to a note payable (Note 4). The commitment fee was recorded as an additional discount to the note and is being amortized over the life of the note. shares of common stock valued at $
On April 21, 2022, the Company issued a total of 288,000 was recorded for the issuance of these shares. shares to two of our directors for director compensation. In addition, the Company issued shares for other services. The closing price of our common stock on the grant date was $ per share, and an expense of $
In June 2022, the Company received $ in cash, from two unrelated parties, and issued shares of common stock at a price of $ per share.
Preferred Stock
The Company is authorized to issue each of Series A and B preferred shares at a par value of $ . Series A preferred shares are not convertible, whereas Series B preferred shares are convertible into common stock on a one-for-one basis at the option of the holder and there is no redemption feature.
As of June 30, 2022 and September 30, 2021, the Company had shares of Series A preferred stock issued and outstanding. At June 30, 2022, the Company converted shares of Series B convertible preferred stock to shares of common stock. At June 30, 2022 and September 30, 2021, the Company had and shares, respectively, of Series B convertible preferred stock issued and outstanding.
Note 4. Notes Payable
On March 20, 2019, an unrelated individual loaned VRVR $ . The note carries a % interest rate and was initially payable March 20, 2020, and then amended on July 27, 2022 to mature on . As of June 30, 2022 and September 30, 2021, the note balance was $ , and accrued interest on the note totaled $ and $ , respectively.
On September 23, 2021, an unrelated third party loaned VRVR $that consisted of cash received by the Company in the amount of $and an original issue discount of $. This discount was amortized over the life of the note commencing October 1, 2021. The note carried a % annual interest rate and matured on . Under the terms of the agreement, the Company paid any accrued interest on a monthly basis. In addition, under the terms of the agreement, the Company issued commitment shares to the holder at $ per share and an expense of $ was applied as an additional discount to the note and amortized over the life of the note. The Company had the right to redeem of the commitment shares if their effect is anti-dilutive. No potentially dilutive debtthe note was repaid on or equity instrumentsbefore the maturity date. On September 30, 2021, principal and accrued interest totaled $ and $ , respectively. On March 23, 2022, the note payable balance of $ and unpaid interest of $ were issued or outstandingrepaid in full in the amount of $ . During the period of October 1, 2021 through March 23, 2022, interest payments totaling $ were made, resulting in $ total interest payments during the periodnine months ended AugustJune 30, 2022, and $ principal and interest balances at June 30, 2022. As a result of this repayment, of the commitment shares were redeemed at $ cost and are being held in treasury.
On March 15, 2022, an unrelated third party loaned VRVR $ that consisted of cash received by the Company in the amount of $ and an original issue discount of $ . This discount is being amortized over the life of the note commencing March 15, 2022. The note carries a % annual interest rate and matures on . As of June 30, 2022, the note balance was $ and the accrued interest was $ . The note is convertible at a price of $ per share.
On March 21, 2022, an unrelated third party, loaned VRVR $ that consisted of cash received by the Company, on April 4, 2022, in the amount of $ and an original issue discount of $ . This discount is being amortized over the life of the note commencing March 15, 2022. The note carries a % annual interest rate and matures on . As of June 30, 2022, the note balance was $ and the accrued interest was $ . The note is convertible at a price of $ per share.
Debt discount amortization on the above notes totaled $310,203 and $0 during the nine months ended June 30, 2022 and 2021, respectively. Total unamortized debt discount totaled $320,172 and $0 at June 30, 2022 and September 31, 20172021, respectively.
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Note 5 5. Related Party Transactions
Note Payable, Related Party
On March 29, 2018, the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing.
Note 7 Stockholders' Deficit
On June 28, 2016,December 11, 2019, the Company issued 50,000 sharesa $25,000, unsecured promissory note receivable to a non-related entity. The note carries an interest rate of its preferred stock to Dale Rasmussen in satisfaction 6% per annum and is due on demand. There is no prepayment penalty for early repayment of his $15,436 loan made to the Company.
Note 7. Convertible Note Receivable
On November 30, 201620, 2020, the Company had 50,000 sharesinvested $7,500 in a Convertible Note from and unrelated entity developing a freemium gaming concept that combines online auctions and gift card purchasing. The note matures on November 20, 2022. The note carries an interest rate of preferred4% per annum and is convertible into 1.25% of the entity’s stock issuedat the Company’s option. As of June 30, 2022 and outstanding.
Note 8 8. Subsequent Events
The Company has evaluated other events subsequent eventsto the balance sheet date through the date these financial statements were issued. There have beenissued and determined that there are no additional subsequent events after August 31, 2017 for which disclosure is required.requiring disclosure.
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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Cautionary Statement about Forward-Looking Statements
This Form 10-Q contains forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “hopes,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, and other characterizations of future events or circumstances are forward-looking statements.
The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.
EXECUTIVE OVERVIEW
On September 27, 2019, Virtual Interactive Technologies Corp merged with Advanced Interactive Gaming Inc, and its subsidiary Advanced Interactive Gaming Ltd. (collectively “Advanced Interactive Gaming” or “AIG”), through a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide financing solutions for independent video game developers globally. Advanced Interactive Gaming was deemed to be the accounting acquirer of the transaction and will be the operating entity moving forward under the name of Virtual Interactive Technologies Corp (“VRVR” or “the Company” or “we”)
VRVR finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the games. To date the Company financed several gaming titles including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release and Worbital. Collectively these games are distributed world-wide on various gaming platforms including Sony PlayStation, Xbox, Steam and Oculus among others. In addition to financing solutions, VRVR offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VRVR continues to reinvest its royalty income into growing its royalty contracts and intellectual property in the video game development industry.
On December 1, 2021 the Company entered into an agreement with a production entity for the services of Duane “Dog” Chapman, also known as “Dog the Bounty Hunter.” Pursuant to the agreement, the Company and Mr. Chapman will develop and market a line of video games in cooperation with the other and will use Mr. Chapman’s name, image, and likeness in connection with the advertisement, promotion, and sale of the video games.
The Company’s strategy moving forward is to continue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the relatively early stage in the product cycle and the growing need for content to support VR hardware sales. While the Company has historically participated mostly in the PC and console market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VRVR may explore strategic alliances and acquisitions in order to expand its business.
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Results of Operations
The following discussion involves the results of operations for the three and nine months ended June 30, 2022 and June 30, 2021.
For the Three Months Ended June 30, 2022 and 2021
Revenue decreased from $35,767 for the three months ended June 30, 2021 to $20,689 for the three months ended June 30, 2022. Revenue was derived from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition and Worbital.
General and Administrative expense for the three months ended June 30, 2022 and 2021 was $523,282 and $48,382, respectively. This increase was due to fees incurred for investor relations, marketing, professional services, and director fees.
Research and development expense for the three months ended June 30, 2022 and 2021 was $16,539 and $0, respectively. The Company is in the beginning stages of planning and designing a new product. All research and development costs for the three months ended June 30, 2022, was associated with fees paid to an external developer.
Other income (expense) for the three months ended June 30, 2022 and 2021 was ($148,219) and ($12,006), respectively. This increase in expense was mainly due to non-cash transactions associated with the amortization of debt discount in the current period of $117,764. The Company incurred interest expense associated with additional debt brought on advances fromin the second quarter. Interest expense recorded for the three months ended June 30, 2022 and 2021 was $16,741 and $150, respectively. Interest expense recorded for related parties until such time thatfor the three months ended June 30, 2022 and 2021 was $14,084 and $12,300, respectively.
For the three months ended June 30, 2022 we can earnrecorded a net loss of $667,351. For the three months ended June 30, 2021, we recorded a net loss of $24,591. The increase in loss of $642,760 was mainly associated with the decrease in revenue, additional general and administrative expenses and research and development expenses identified above, and debt discount amortization and interest expense associated with our related party and convertible notes payable.
For the Nine Months Ended June 30, 2022 and 2021
Revenue decreased from $130,898 for the nine months ended June 30, 2021 to support$80,719 for the nine months ended June 30, 2022. Revenue was derived from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition and Worbital.
General and Administrative expense for the nine months ended June 30, 2022 and 2021 was $836,879 and $175,383, respectively. This increase was due to fees incurred for investor relations, marketing, professional services, and director fees. During nine months ended June 30, 2022, the Company issued 220,000 shares for services which totaled $381,000.
Research and development expense for the nine months ended June 30, 2022 and 2021 was $16,539 and $0, respectively. The Company is in the beginning stages of planning and designing a new product. All research and development costs for the nine months ended June 30, 2022, was associated with fees paid to an external developer.
Other income(expense) for the nine months ended June 30, 2022 and 2021 was ($384,663) and ($35,428), respectively. This increase in expense was mainly due to non-cash transactions associated with the amortization of debt discount in the current period of $310,203. The Company incurred interest expense associated with additional debt brought on in the second quarter. Interest expense recorded for the nine months ended June 30, 2022 and 2021 was $32,784 and $449, respectively. Interest expense recorded for related parties for the nine months ended June 30, 2022 and 2021 was $42,373 and $36,899, respectively.
For the nine months ended June 30, 2022, we recorded a loss of $1,157,362. For the nine months ended June 30, 2021, we recorded a loss of $79,913. The increase in loss of $1,077,449 was mainly associated with the decrease in revenue, increase in general and administrative expenses and research and development expenses identified above, and debt discount amortization and interest expense associated with our operations or obtain financing through salesrelated party and convertible notes payable.
Liquidity and Capital Resources
As of our equity or securities. ThereJune 30, 2022, we had cash and cash equivalents of $72,684. As of September 30, 2021, we had cash and cash equivalents of $251,064. Working capital was ($921,766) as of June 30, 2022 compared to $293,754 at September 30, 2021. The decrease in working capital of $1,215,520 was primarily the result of the Company’s related party debt of $950,999 (notes payable and accrued interest) due in the current year and is no formal written commitmentrecorded as a current liability at June 30, 2022 and as a long term liability of $908,627 at September 30, 2021 (note is set to mature in December 2022).
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Cash Flows from any personOperating Activities:
Net cash used in operating activities for the nine months ended June 30, 2022 was $415,630. Net cash provided by operating activities for the nine months ended June 30, 2021 was $12,080. The change over the two periods presented was $427,710.
Changes in operating activities for the nine months ended June 30, 2022 included decreases in accounts payable and accrued liabilities of $34,714, and royalties receivable of $26,202, offset by increases in interest receivable of $1,347, accrued interest payable, related party of $42,372 and accrued interest payable of $18,016. The Company had non-cash activities of $381,000 and $310,203 related to provide us with capital.stock issued for services and debt discount amortization, respectively.
Changes in operating activities for the nine months ended June 30, 2021 included decreases in accounts payable and accrued liabilities of $4,970, accounts payable-related party of $5,994, and royalty receivable of $66,912, offset by increases in accrued interest receivable of $1,301, accrued interest payable, related parties of $36,898, and accrued interest payable of $448.
Cash Flows from Investing Activities:
Net cash used in investing activities for the nine months ended June 30, 2022 and 2021 was $0 and $7,500, respectively. During the nine months ended August 31, 2017June 30, 2021, the Company advanced money in the form of a convertible note receivable in the amount of $7,500.
Cash Flows from Financing Activities:
Net cash provided by financing activities for the nine months ended June 30, 2022 and 2016, we received $10,0002021 was $237,250 and $20,150, respectively, in proceeds from related parties, as well as $5,000 from an unaffiliated investor in May 2017, which we used to pay for professional fees to maintain our registrant status with the SEC.$0, respectively. During the nine months ended August 31, 2016, we issued 50,000 sharesJune 30, 2022, the Company received money in the form of preferred stock to our President in satisfactiontwo convertible notes payable, net of $15,436 in loans we owed to him, and 2,790,750 sharesdiscounts of our common stock to our President and Secretary in satisfaction of $55,818 in related party loans. The officers also forgave accrued interest on these loans$434,750. In addition, an existing convertible note in the amount of $4,708, which is reflected$235,000, plus interest, was paid off during this period presented. In June 2022, the Company received $37,500 in paid-in capital. We did not engage in any equity transactions during the nine months ended August 31, 2017.
ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of our disclosure controls and procedures as of August 31, 2017.June 30, 2022. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive and Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission'sCommission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company'scompany’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, our Chief Executive and Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the periodnine months ended August 31, 2017June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
Item 6. Exhibits
Exhibits
3.1 | Articles of Incorporation (1) | |
3.2 | Amended Articles of Incorporation (1) | |
3.3 | Bylaws (1) | |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act | |
31.2* | ||
32.1* | ||
32.2* | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
(1) Incorporated by reference to the same exhibit filed with the Company’s registration statement on Form S-1 (File #333-190265).
* Provided herewith
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, of 1934, the registrantRegistrant has duly caused this reportReport to be signed on its behalf by the undersigned, thereunto duly authorized.
VIRTUAL INTERACTIVE TECHNOLGIES CORP. | ||
By: | /s/ Jason D. Garber | |
Jason D. Garber | ||
Principal Executive Officer | ||
By: | /s/ Janelle Gladstone | |
Janelle Gladstone | ||
Principal Financial and Accounting Officer |
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