The following discussion and analysis of our financial condition and results of
operations for the three and nine months ended January 31, 2020 should be read
together with our unaudited financial statements and related notes included
elsewhere in this quarterly report. This discussion contains forward-looking
statements and information relating to our business that reflect our current
views and assumptions with respect to future events and are subject to risks and
uncertainties that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements. These forward-looking statements speak only as
of the date of this report. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, or achievements. Except as required by applicable
law, including the securities laws of the United States, we expressly disclaim
any obligation or undertaking to disseminate any update or revisions of any of
the forward-looking statements to reflect any change in our expectations with
regard thereto or to conform these statements to actual results.
Company Overview
Black Cactus Global, Inc. (formerly Envoy Group Corp.) (the "Company") was
incorporated in the State of Florida on April 8, 2013, with a fiscal year end of
April 30. Until June 2017, we had not established any business operations and
had not achieved any revenues. Until then, we were in the process of identifying
and evaluating feasible business opportunities in the consumer products and
technology industries.
The address of the head office is Suite 200, 8275 South Eastern Avenue, Las
Vegas, Nevada 89123. On December 4, 2017, the Company changed its name to
"Black Cactus Global, Inc." with a plan to engage in the development of
commercial Blockchain technology and Smart Contract software applications for
healthcare, Fintech, logistics and energy solutions worldwide.
We are currently focused on developing blockchain software platforms. Our plan
is to develop or license intellectual property to build blockchain platforms for
a variety of uses. Our initial efforts will focus on utilizing the intellectual
property in two ways: to develop secure blockchain based supply chain and
inventory control systems, and to develop a blockchain based trading platform in
order to facilitate securities trading using either a fiat currency or
cryptocurrency.
On October 30, 2018, an aggregate of 50,000,000 shares of our common stock,
which were issued in certificated form on April 27, 2018, in the amounts of
12,500,000 each to three of our former directors Dr. Pruthvinath Kancherla, Dr.
Ravindranath Kancherla Dr. Ramesh Para, and to Sai Krishna Para, the nephew of
Dr. Ramesh Para, were transferred into book entry form. These shares of common
stock were issued to them in consideration for their services to be performed,
in connection with our proposed acquisition of 29% of the outstanding common
stock of Black Cactus Global Technologies Pvt. Limited ("BCGT"), a corporation
organized under the laws of India, the CEO of which is Dr. Ramesh Para, the CEO
of the Company, and were to be cancelled if the acquisition was not consummated.
On October 24, 2018, we received notice from the applicable regulators, in
India, that they would not approve our acquisition of the shares of common stock
of BCGT. As a result, the transaction was never consummated. The 50,000,000
shares of our common stock issued to our former directors and Sai Krishna Para
were to be cancelled as a result of the failure to consummate the acquisition of
the shares of common stock of BCGT, but such shares have not yet been cancelled
and continue to be issued and outstanding shares of common stock of the Company.
On August 24, 2019, the Company entered into a Software License Agreement
("License Agreement") with Charteris, Mackie, Baillie & Cummins Limited ("CMBC
Limited") to acquire a non-exclusive license for Black Cactus blockchain
development software platform and related intellectual property ("Software")
which are licensed to CMBC Limited from Black Cactus LLC. As consideration, the
Company shall pay CMBC Limited a royalty in the amount of five percent (5%) of
the gross revenue received from the sublicense of the Software ("royalty"), due
on a quarterly basis, and issue or assign an equivalent number of common shares
to CMBC Limited that will represent 60% of the then issued shares of the
Company. In addition, the Company will issue an option for CMBC Limited to
acquire additional shares at par value ($0.0001) per share up to 60% of any
shares issued under the existing Securities Purchase Agreements with Bellridge.
The closing of the License Agreement is subject to, among certain other
conditions: (1) the Company obtaining a written agreement with Bellridge to
increase its line of credit from $1,500,000 to $5,000,000; (2) the resignation
of all the directors of the Company serving on the Board, during the quarterly
period ended July 31, 2019, which was satisfied by the resignation of all of
such directors on September 13, 2019, and the appointment of Lawrence P.
Cummins, Karyn Augustinus and three non-executive independent Directors
nominated by CMBC Limited; (3) the resignation of all the officers of the
Company serving, during the quarterly period ended July 31, 2019, which was
satisfied by the resignation of all of such officers on September 13, 2019, and
the appointment of Lawrence P. Cummins as its President (after undertaking a
review of the future plans of the Company, the Board of Directors will appoint a
Chief Executive Officer); (4) proof satisfactory to CMBC Limited that fair
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resolutions have been entered into with certain persons, including Harpreet
Sangha, the former Chairman of the Board and Chief Financial Officer of the
Company, along with his family and known associates for the cancellation of the
shares of the Company currently owned by them; (5) CMBC Limited is satisfied
with the possibility of lifting the Cease Trade Order issued by the British
Columbia Securities Commission on May 6, 2016, to the Company, ordering all
persons to cease trading in the Company's securities until the Company files the
required records completed in accordance with the Securities Act, R.S.B.C. 1996
and the Executive Director revokes the Order; (6) the cancellation of $350,000
amount allegedly outstanding under the terms of the Definitive Acquisition
Agreement, dated as of June 18, 2017, between the Company and the selling
shareholders of BitReturn.ca; (7) repayment by the majority shareholder of the
Company of $169,729 owed by such shareholder to the Company; and (8) the
Company's becoming current in its periodic filing with the SEC.
During the quarterly period ended January 31, 2020, we were not deemed an
"emerging growth company" as defined in the Jumpstart Our Business Startups Act
of 2012 (the "Jobs Act"). A company continues to be deemed an "emerging growth
company" until the last day of the fiscal year of the issuer following the fifth
anniversary of the date of the first sale of common equity securities of the
issuer pursuant to an effective registration statement under the Securities Act
of 1933. Our first sale of common equity pursuant to an effective registration
statement was during the three months ended October 31, 2013, and last day of
the fiscal year of the fifth anniversary of the date of the first sale of our
common equity securities was April 30, 2019. As a result, after April 30, 2019,
we were no longer an "emerging growth company".
Critical Accounting Policies
As of January 31, 2020, there were no critical accounting policies. See the
footnotes to our unaudited financial statements, included elsewhere in this
quarterly report on Form 10-Q, for a complete summary of the significant
accounting policies used in the presentation of our financial statements. The
summary is presented to assist the reader in understanding the financial
statements. The accounting policies used conform to accounting principles
generally accepted in the United States of America and have been consistently
applied in the preparation of the financial statements.
Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers or customers
constituting greater than 10% of the Company's gross sales during the reporting
period.
Recently Issued Accounting Standards
The Company has implemented all new accounting pronouncements that are in effect
and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
Results of Operations
The following discussion of the Company's financial condition and the results of
operations should be read in conjunction with the unaudited financial statements
and notes thereto appearing elsewhere in this quarterly report on Form 10-Q.
There is no historical financial information about us upon which to base an
evaluation of our performance. We had net loss of $134,191 and $942,606 for the
three months ended January 31, 2020 and 2019, respectively and $376,525 and
$4,126,101 for the nine months ended January 31, 2020 and 2019, respectively.
We did not generate any revenues from our operations for the three months ended
January 31, 2020 or 2019 or for the nine months ended January 31, 2020 or 2019.
We cannot guarantee we will be successful in our business operations. Our
business is subject to risks inherent in the establishment of a new business
enterprise, including the financial risks associated with the limited capital
resources currently available to us for the implementation of our business
strategies.
During the three months ended January 31, 2020 and 2019, we had operating
expenses of $8,364 and $22,706, respectively. The decrease in operating expenses
is primarily due to a decrease in investor relations of $17,833.
During the nine months ended January 31, 2020 and 2019, we had operating
expenses of $13,017 and $2,181,275, respectively. The decrease in operating
expenses is primarily due to a decrease in consulting of $75,133, a decrease in
investor relations of $71,333, a decrease in professional fees of $122,226, and
the recognition of stock-based compensation expense to certain directors and a
relative of a director of $1,875,000 in the prior period which did not recur
during the current period.
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Since inception, the majority of our time has been spent refining its business
plan and preparing for a primary financial offering.
Our results of operations are summarized below:
For the Three For the Three
Months Ended Months Ended
January 31, 2020 January 31, 2019
Revenue - -
Cost of Revenue - -
Net Loss (Income) and Comprehensive (Loss) Income $ (134,191 ) $ (942,606 )
Net Loss (Income) per Common Share, Basic and Diluted
(0.00 ) (0.01 )
Weighted Average Number of Common Shares Outstanding,
Basic and Diluted 166,073,296 166,073,296
For the Nine For the Nine
Months Ended Months Ended
January 31, 2020 January 31, 2019
Revenue - -
Cost of Revenue - -
Net Loss (Income) and Comprehensive (Loss) Income $ (376,525 ) $ (4,126,101 )
Net Loss (Income) per Common Share, Basic and Diluted
(0.00 ) (0.03 )
Weighted Average Number of Common Shares Outstanding,
Basic and Diluted
166,073,296 132,695,035
Management's Plan of Operation
We do not have adequate funds to satisfy our working capital requirements for
the next twelve months. We have borrowed a total of $1,000,000 from Bellridge
Capital LP ("Bellridge") to fund our planned plan of operations in digital
currency mining. We sold Bellridge our Senior, Secured Convertible Promissory
Notes (the "Notes"). Thus far, Bellridge has purchase $1,000,000 in Notes.
Pursuant to the terms of our agreements with Bellridge, we were required to file
a registration statement with the SEC to register the shares of Common Stock to
be issued under those agreements. We filed the registration statement on April
24, 2018 but it has not yet been declared effective. We received the third
tranche of $200,000 from Bellridge after the first set of SEC comments. We may
not receive the fourth and final tranche of $500,000 unless and until the
registration statement is declared effective by the SEC. We cannot estimate when
our registration statement will be declared effective by the SEC. Under certain
conditions, Bellridge may not have to purchase the fourth Note. These
conditions include any acts constituting default under any of the Notes or the
agreements entered into at the time of the first purchase of the Note issued on
November 27, 2017. Until such time as we receive the final $500,000 of funding
from Bellridge, in the interim, we may not be able to completely implement and
commence our proposed plan of operations.
As of January 31, 2020, we had not yet had any revenues from our services in the
digital currency mining field.
Liquidity and Capital Resources
As of January 31, 2020, we had not generated any revenues from our business
operations. As at January 31, 2020, there were 166,073,296 shares of common
stock issued and outstanding. Total cash proceeds received from common share
issuance since inception to January 31, 2020 is $90,500.
As of January 31, 2020, and 2019, we had no cash on hand. Our cash was not
sufficient to meet the obligations associated with being a company that is fully
reporting with the SEC. We believe we will require additional financing in the
form of share issuance proceeds or advances from our directors.
Our business expansion will require significant capital resources that may be
funded through the issuance of common stock or of notes payable or other debt
arrangements that may affect our debt structure. Despite our current financial
status, we believe that we may be able to issue notes payable or debt
instruments in order to start executing our business plan. However, there can be
no assurance that we will be able to raise money in this fashion and have not
entered into any agreements that would obligate a third party to provide us with
capital.
During the nine months ended January 31, 2020 and 2019, we had operating
expenses of $13,017 and $2,181,275, respectively. Historically, we have relied
on loans to fund general and administrative operating expenses. As of January
31, 2020, we had a working capital deficiency of $2,729,409.
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As of January 31, 2020, the Company had no external sources of liquidity such as
arrangements with credit institutions or off-balance sheet arrangements that
will have or are reasonably likely to have a current or future effect on our
financial condition or immediate access to capital.
Our independent auditor has expressed substantial doubt about our ability to
continue as a going concern and believes that our ability is dependent on our
ability to implement our business plan, raise capital and generate revenues. See
Note 2 of our financial statements.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect or change on the Company's financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. The term
"off-balance sheet arrangement" generally means any transaction, agreement or
other contractual arrangement to which an entity unconsolidated with the Company
is a party, under which the Company has (i) any obligation under a guarantee
contract that has any of the characteristics identified in FASB ASC paragraph
460-10-15-4 (Guarantees Topic), as may be modified or supplemented, and that is
not excluded from the initial recognition and measurement provisions of FASB ASC
paragraphs 460-10-15-7, 460-10-25-1, and 460-10-30-1; (ii) a retained or
contingent interest in assets transferred to an unconsolidated entity or similar
arrangement that serves as credit, liquidity or market risk support to such
entity for such assets; (iii) any obligation, including a contingent obligation,
under a contract that would be accounted for as a derivative instrument, except
that it is both indexed to the registrant's own stock and classified in
stockholders' equity in the registrant's statement of financial position, and
therefore excluded from the scope of FASB ASC Topic 815, Derivatives and
Hedging, pursuant to FASB ASC subparagraph 815-10-15-74(a), as may be modified
or supplemented; or (iv) any obligation, including a contingent obligation,
arising out of a variable interest (as defined in the FASB ASC Master Glossary),
as may be modified or supplemented) in an unconsolidated entity that is held by,
and material to, the registrant, where such entity provides financing,
liquidity, market risk or credit risk support to, or engages in leasing, hedging
or research and development services with, the registrant.
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