CAPITAL PARK HOLDINGS CORP. - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Edgar Glimpses |

We define our accounting periods as follows:



  ? "fiscal 2017" -  through 

  ? "fiscal 2018" -  through 




The Company



Prior to the transaction discussed in Note 11 "Subsequent Events" to our consolidated financial statements, we were a lifelogging software company that developed and hosted a proprietary cloud-based software solution accessible on iOS and Android devices that offers an enhanced media experience for consumers by augmenting videos, livestreams and photos with additional context information and providing a platform that makes it easy to find and use that data when viewing or sharing media.

Following the launch of our private beta version of the LifeLogger platform in to users who expressed interest for exclusive testing with their iOS and Android devices, we launched an open public version during the first quarter of 2016. This release had the primary value proposition built in with geo-coordinates, face detection, playback with interactive map, social engagement features that enable easy sharing and ability to "like" other postings. Among the uses of our platform were the ability to share a video of a customer's vacation in Europe with others that is integrated with an interactive map showing the viewer where the video is taking place, allowing the viewer to seamlessly switch to the map view and even show additional views of those locations and other media taken by other people nearby. The end result was designed to provide an enhanced media experience much richer than just sharing the video alone.

Subsequent to , as discussed in Note 11 "Subsequent Events" to our consolidated financial statements, in addition to its lifelogging software business, the Company has been structured as a holding company with a business strategy focused on owning subsidiaries engaged in a number of diverse business activities.



8







RESULTS OF OPERATIONS



The following comparative analysis on results of operations was based primarily on the comparative audited financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report.



Revenue


The company had no revenues in fiscal 2018 nor 2017. The Company currently cannot predict when the Company will become revenue producing.



Operating Expenses


Total operating expenses for fiscal 2018 decreased by $398,750 compared to fiscal 2017 mainly as a result of a decreases in option expenses to a consultant, research and development, consulting and general and administrative.



Other Income (Expenses)


Other expenses for fiscal 2018 increased by $153,474 compared to fiscal 2017 as a result of, change in fair value of derivative warrants and notes, partially offset by an increase in interest expense.

The net loss for fiscal 2018 was $1,144,696, a decrease of $245,276 compared to fiscal 2017, as a result of decreases in operating expenses and other expenses discussed above.

Liquidity and Capital Resources

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of , our working capital deficit amounted to $3,052,319 an increase of $1,030,021 as compared to $2,022,298 as of . This increase is primarily a result of a decrease in cash and increases in accounts payable and notes payable and derivative liabilities.

Net cash used in operating activities was $781 during fiscal 2018 compared to $237,360 in fiscal 2017. The decrease in cash used in operating activities is primarily attributable to our net loss and derivative liabilities, partially offset by a decrease in options issued for consulting services, interest expense, original issue discount on new financing, commitment fee expense for new debt financing, changes in derivative liabilities.

Net cash provided by financing activities during fiscal 2018 was nil compared to $137,100 in fiscal 2017. The decrease was primarily a result of the reduction in proceeds from the note payable.



Capital Resources


We currently have no cash resources on hand and our projected operating expenses and working capital needs exceed our income and cash resources. We potentially will have to issue additional debt or equity, or enter into a strategic arrangement with a third party to carry out some aspects of our business plan. There can be no assurance that additional capital will be available to us.



9






Current and Future Financings



Current Indebtedness


Following is an analysis of convertible debt issued to Old Main Capital and SBI Investments at :



                             December 31, 2018
Contractual balance         $         1,117,399
Less unamortized discount               (11,809 )

Convertible debt            $         1,105,590



The above stated amount does not include the accrued expenses, including default interest and penalties, as at of $1,279,052. The Company is in default under the terms and conditions of the convertible debt issued to Old Main Capital and SBI.




Going Concern Consideration



We have been in the development stage since our inception on and continue to incur significant losses. We had an accumulated deficit of $7,128,606 as of and $781 in cash was used in operating activities. In addition, the Company is in default on convertible debt obligations of $1,117,399. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent our ability to raise additional capital and generate additional revenues and profits from our business plan.

In the opinion of our independent registered public accounting firm for our fiscal year end , our auditor included a statement that as a result of our deficit accumulated during the development stage at , our net loss and net cash used in operating activities for the reporting period then ended, there is a substantial doubt as our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Inflation


In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.



10






Off-Balance Sheet Arrangements

Under SEC regulations, we are required to disclose our off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. As of , we have no off-balance sheet arrangements.



CRITICAL ACCOUNTING POLICIES


Our significant accounting policies are disclosed in Note 2 of our Financial Statements included elsewhere in this Annual Report on Form 10-K.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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