METRO ONE TELECOMMUNICATIONS, INC. The following discussion is intended to assist you in understanding our
financial condition and results of operations and should be read in conjunction
with the financial statements and related notes included elsewhere in this
Annual Report on Form 10-
Overview Our Mission
We enable retailers to grow their business, using mobile commerce to better engage their customers, both in-store and online with no coding required.
Our Objective
We are focused on changing the way retailers integrate mobile commerce solutions within their business. Our multi-model, plug and play mobile commerce platform enables retailers to launch their own branded mobile application serving as an additional sales channel in a matter of a few hours with no coding required.
Through our recently incorporated Israeli tech company, Stratford, we will continue to merge the functionality of mobile technology, artificial intelligence "AI", and machine learning enabling retailers to quickly and easily bring their business online to significantly:
· Increase customer retention; · Increase average basket size; · Increase Up sell and Cross sell; and · Increase customers lifetime value CLV.
We have recently completed the transformation of our acquired suite of software products to a fully modular SaaS based platform. This will enable us to scale the company significantly, onboarding multiple retailers simultaneously without any additional integration costs. Our first two mobile commerce app modules launched in August and September, 2022 on each of Shopify and WooCommerce and are currently available for consumers to download.
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Highlights
The following are highlights of our operating results for the year ended
· Revenue. During the year ended December 31, 2022 , we generated revenue of
$74,703 . During the year ended December 31, 2021 , we generated revenue of
$170,622 . Our revenue for each of the years ended December 31, 2022 and
2021 is primarily attributed to subscription fees related to our legacy
enterprise software application and initial revenue related to our
recently launched SaaS mobile commerce software platform.
· Operating expenses. During the year ended December 31, 2022 , our operating
expenses were $2,797,382 . During the year ended December 31, 2021 , our
operating expenses were $2,217,626 . Our operating expenses include
management fees, research and development costs, general and
administrative expenses, and sales and marketing costs.
· Net (loss). During the year ended December 31, 2022 and the year ended
December 31, 2021 , the Company reported a net loss of $3,926,954 and
$3,341,980 , respectively, or a loss of approximately $0.02 and $0.04 per
share.
We are currently onboarding customers for our recently launched SaaS mobile
commerce suite. The Shelfy mobile app, which launched on
Our recently launched mobile commerce apps represent over 14 months of post feasibility development including reprogramming and industry required modifications to transform our suite of Shelfy enterprise commerce software applications from IOS and Android to flutter applications, among other modifications for initial integration with WooCommerce and Shopify reseller platforms. We believe that the re-developed Shelfy software suite, now a single format mobile commerce offering available to all industry users, and fully customizable by the user, will generate increasing revenues period over period through recurring monthly subscriptions.
Historically, the Company was not generating revenue from its operations. Upon
acquisition of the Shelfy intellectual property in 2021, we acquired two legacy
customer accounts, using the existing Shelfy enterprise commerce software, one
of which customer contracts terminated prior to close of fiscal 2022. As of
Recent Developments
The Company has recently entered into two licensing and marketing agreements
with industry partners based in
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Uncertainties in our Business
We believe that the key uncertainties in our business are as follows:
· We believe that expanding our marketing team, which may result in
significant advertising expenses, will be necessary in order to increase
product awareness in order to compete with our competitors, including
large and well established brands with access to significant capital
resources.
· Customer trends and tastes can change for a variety of reasons including
government regulations and variation in demographics. We will need to be
able to adapt to changing preferences in the future.
· Our sales growth is dependent upon maintaining our relationships with
existing and future customers, which includes sales to large retailers.
Results of Operations
Years Ended
Revenue
We have generated
Cost of Revenue
Cost of revenue in the year ended
Operating Expenses For the years endedDecember 31, 2022 and 2021 we had the following operating expenses: Years Ended December 31, 2022 2021 Operating expenses Cost of revenue$ 49,355 $ - Research and development expenses 816,629 - General and administrative 1,616,513 1,896,070 Management Fees 168,603 116,089 Sales and Marketing 146,282 205,467 Total operating expenses$ 2,797,382 $ 2,217,626
Total operating expenses for the year ended
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Other Income (Expenses)
Other expense for the years ended
During the year ended
Net Loss
We had a net loss of
Statement of Cash Flows
Years Ended
The following table summarizes our cash flows for the years presented:
December 31 ,December 31, 2022 2021
Net cash provided by (used in) operating activities
(1,022,114 ) (3,417,237 )
Net cash provided by financing activities 1,939,000 5,131,000
Foreign exchange gain (loss) (11,962 ) 195,676
Increase (decrease) in cash (885,100 ) 908,361
Cash end of year $ 231,763 $ 1,128,825 Cash used in operating activities:
Net cash used in operating activities was
Cash used in investing activities:
The Company purchased assets for a cash value of
Cash provided by financing activities:
Net cash provided by financing activities during the year ended
Liquidity and Capital Resources
As of
We continue exploring sources of debt and equity financings. There can be no
assurance the necessary financing will be available to meet our timeline. We
expect to continue to onboard additional customers for our existing software
suite and our new software offering that launched during fiscal year 2022,
however, we do not believe revenues from operations in fiscal year 2022 will be
sufficient to meet our operational overhead. We currently believe that the
Company's cash requirement during the following twelve months is approximately
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During the year ended
Going Concern
The accompanying financial statements have been prepared assuming the
continuation of the Company as a going concern. The Company has recently
acquired operating assets, is generating modest revenues, and is in the process
of pursuing expansion of its new business venture. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and is dependent on debt and equity financing to fund its operations. The
accompanying financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern. Management's plans for
the continuation of the Company as a going concern include financing the
Company's operations through issuance of its common stock, conducting revenue
generating operations or expanding the Company's existing business operations to
acquire projects which generate additional revenue. If the Company is unable to
complete its financing requirements or achieve net profits as projected, it will
then modify its expenditures and plan of operations to coincide with the actual
financing completed and actual operating revenues, if any. The Company is
currently seeking a further equity financing of up to
There are no assurances the Company will succeed in implementing its plans. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned operations. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.
Off-Balance Sheet Arrangements
As of
· a retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as credit;
· liquidity or market risk support to such entity for such assets;
· an obligation, including a contingent obligation, under a contract that
would be accounted for as a derivative instrument; or
· an obligation, including a contingent obligation, arising out of a
variable interest in an unconsolidated entity that is held by, and
material to us, where such entity provides financing, liquidity, market
risk or credit risk support to or engages in leasing, hedging, or research
and development services with us.
Critical Accounting Estimates
We have adopted various accounting policies that govern the application of
accounting principles generally accepted in
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Revenue Recognition
We derive our revenues primarily from subscription fees for access to our software offerings, collected monthly, as well as from limited sales of customized professional services. We recognize revenues when a contract exists between us and a customer and upon transfer of control of promised products or services to such customer in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenues are recognized net of allowances and any taxes collected from customers, which are subsequently remitted to governmental authorities.
We determine revenue recognition through the following steps:
· Identification of the contract, or contracts, with a customer;
· Identification of the performance obligations in the contract;
· Determination of the transaction price;
· Allocation of the transaction price to the performance obligations in the
contract; and
· Recognition of revenues when, or as, the Company satisfies a performance
obligation.
Stock-Based Compensation
We account for stock options granted to employees, non-employees, and directors using the accounting guidance in ASC 718 "Stock Compensation" ("ASC 718"). In accordance with ASC 718, we estimate the fair value of service-based options and performance-based options on the date of grant, using the Black-Scholes pricing model. We recognize compensation expense for stock option awards over the requisite or implied service period of the grant.
Compensation expense is recognized on a graded-vesting method over the requisite service period. Forfeitures are accounted for as they occur.
Income Taxes
Income taxes are recognized in accordance with ASC 740, "Income Taxes", whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.
Intangible assets
The Company recognizes assets for customer relationships, developed technology, post-technological feasibility software development costs, patents and finite-lived trade names. Finite-lived intangible assets are carried at acquisition cost less accumulated amortization. Such amortization is recorded on a straight-line basis over the estimated useful lives of the respective assets, generally from 3 to 8 years. Amortization for developed technology is recognized in cost of revenue. Amortization for customer relationships and trade names is recognized in sales and marketing expenses.
During the year ended
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Foreign Currency Translation
The Company uses the
Assets and liabilities of the Company's subsidiary are translated into
Software development expenditures consist primarily of costs associated with the
on-going modifications to certain software acquired from Royal App including
employee compensation and certain stock based compensation associated with
certain employee contracts, as well as other expenses for research and
development, personnel, supplies and development materials, costs for
consultants and related contract research and facility costs. Expenditures
relating to research and development incurred pre-technological feasibility are
expensed as incurred. Post-technological feasibility expenditures are
capitalized as incurred. During the period ended
During the year ended
Impairment
We account for indefinite-lived intangible assets using the accounting guidance in ASC 350-30-35. The Company tests for impairment annually, or more frequently if events or circumstances indicate the asset might be impaired, by comparing the fair value of the assets to their carrying amount. Alternatively, the Company's management may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative assessment. The Company presently has one reporting unit; and all intangible assets are included in this single reporting unit, therefore, all of its intangible assets are associated with the entire company. As a result the Company presently has the option to bypass the qualitative assessment and perform the quantitative assessment.
The Company reviews the valuation of long-lived assets, including property and equipment and finite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The recoverability of long-lived assets or asset groups is calculated based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. Impairment testing is performed at the asset group level.
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Recent Accounting Pronouncements
As of
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