EDGAR 10-K Filing

Company CIK: 1525852
Filing Year: 2021
Filename: 1525852_10-K_2021_0001477932-21-008327.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
HISTORY AND BACKGROUND
We were incorporated in the State of Nevada on December 30, 2010, originally under the name Lifetech Industries, Inc. All agreements related to the Lifetech business were terminated and closed as of April 30, 2014. Effective August 2, 2013, the name was changed from “Lifetech Industries, Inc.” to “mCig, Inc.” The Company redomiciled to Puerto Rico on April 17, 2020. Effective April 17, 2020, the name was changed from “MCIG, Inc.,” to “BOTS, Inc.” The Company’s common stock is traded under the symbol “BTZI.” The Company is headquartered in San Juan, Puerto Rico.
GENERAL
Originally, we were formed to open and operate a full-service day spa in Montrose, California. In October 2013 we repositioned ourselves as a technology company focused on two long-term
secular trends sweeping the globe: (1) The decriminalization and legalization of marijuana for medicinal or recreational purposes; and (2) the adoption of electronic vaporizing cigarettes (commonly known as “eCigs”).
The Company initially earned revenue through wholesale and retail sales of electronic cigarettes, vaporizers, and accessories in the United States. It offered electronic cigarettes and related products through its online store at www.BOTS.org, as well as through the company’s wholesale, distributor, and retail programs. We expanded operations to include the VitaCig brand in 2014.
From 2015 through 2020 the Company was involved in multiple cannabis business entities. We have elected to discontinue all operations in the cannabis markets and focus on robotics.-, Blockchain-based solutions including decentralized finance applications, cybersecurity, crypto generation, mining, equipment repair, and extended warranties on Bitcoin mining equipment
We operated multiple websites (which are not incorporated as part of this Form 10Q report). The Company’s primary website is www.BOTS.bz.
INDUSTRY OVERVIEW
Robotics
The global robotics technology market size was valued at $62.75 billion in 2019, and is projected to reach $189.36 billion by 2027, growing at a CAGR of 13.5% from 2020 to 2027. Robotics technology is the intersection of technology, engineering, and science for producing machines called robots, which are used to replicate human actions. The key objective of the robotics technology is to enhance the performance of an organization and to produce better outcome. Robotics technology finds its wide range of applications in various industry verticals, which include healthcare, domestic, agriculture, technology, automotive, and manufacturing.
We believe that in the wake of COVID-19, demand for robotics is expected to increase among several industries such as supply chain, manufacturing, and healthcare, due to growing adoption of robots in place of humans to reduce the impact of the virus and to enhance market share.
Rise in need for automation and safety in organizations and availability of affordable, energy-efficient robots drive the growth of the global robotics market. In addition, increase in labor & energy costs and upsurge in usage of robotics technology in different industry verticals fuel the growth of the market. However, high initial cost of robots and lack of awareness among SMEs hamper the growth of the market. On the contrary, surge in adoption of robotics technology in emerging economies and increase in use in diverse applications are the factors expected to provide lucrative opportunities for the growth of the market.
Earlier, use of robots was limited to the automotive and manufacturing sectors. However, with the availability of customized solutions, industries such as healthcare, defense & security, aerospace, education, food & beverage, domestic, and electronics are adopting robotics technology to enhance their efficiency. In the coming years, robotics technology is expected to be used for different applications, which is expected to augment the growth of the market.
Blockchain and Digital Data
A Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. The blockchain system has been designed to use nodes agreement to order transactions and prevent fraud so that records cannot be altered retroactively. The network orders transaction by putting them together into groups called blocks, each block contains a definite number
of transactions and a link to the previous block. Bitcoin, which is the name of the best-known cryptocurrency, is the one for which blockchain technology was invented. Blockchain is, quite simply, a digital, decentralized ledger that keeps a record of all transactions that take place across a peer-to-peer network.
Bitcoins are not the only type of Digital Assets founded on math-based algorithms and cryptographic security, although it is considered the most prominent as of the date of the filing of this Registration Statement. Over 2,000 other Digital Assets, (commonly referred to as “altcoins”, “tokens”, “protocol tokens”, or “digital assets”), have been developed since the Bitcoin Network’s inception, including Ethereum, Ripple, Litecoin, Dash, and HEX.
Cryptocurrencies
Cryptocurrency is an encrypted decentralized digital currency transferred between peers and confirmed in a public ledger via a process known as mining. As of January 31, 2020, there are over 12,000 digital currencies in existence.
Blockchain Value
Cryptocurrencies are Digital Asset that is not a fiat currency (i.e., a currency that is backed by a central bank or a national, supra-national or quasi-national organization) and is not backed by hard assets or other credit. As a result, the value of cryptocurrencies is determined by the value that various market participants place on them through their transactions.
Exchange Valuation
Due to the peer-to-peer framework of cryptocurrencies, transferors and recipients of cryptocurrencies are able to determine the value of the cryptocurrency transferred by mutual agreement or barter with respect to their transactions. As a result, the most common means of determining the value of a cryptocurrency is by surveying one or more Exchanges where the cryptocurrency is publicly bought, sold and traded.
Uses of Cryptocurrencies
Global trade in cryptocurrencies consists of individual end-user-to-end-user transactions, together with facilitated exchange-based trading. There is currently no reliable data on the total number or demographic composition of users on the global exchanges.
Cryptocurrencies can be used to purchase goods and services, either online or at physical locations, although reliable data is not readily available about the retail and commercial market penetration of the various cryptocurrencies. To date, the rate of consumer adoption and use of cryptocurrencies for paying merchants has trailed the broad expansion of retail and commercial acceptance of cryptocurrency. Other markets, such as credit card companies and certain financial institutions are not accepting such digital assets. It is likely that there will be a strong correlation between the continued expansion of the Cryptocurrency Network and its retail and commercial market penetration.
The Blockchain Network was not designed to ensure the anonymity of users, despite a common misperception to the contrary. All transactions are logged on the Blockchain and any individual or government can trace the flow of cryptocurrencies from one address to another. Off-Blockchain transactions occurring off the Network are not recorded and do not represent actual transactions or the transfer of cryptocurrencies from one digital wallet address to another, though information regarding participants in an Off-Blockchain transaction may be recorded by the parties facilitating such Off-Blockchain transactions. Digital wallet addresses are randomized sequences of 27-34 alphanumeric characters that, standing alone, do not provide sufficient information to identify users; however, various methods may be used to connect an address to a particular user’s identity, including, among other things, simple Internet searching, electronic surveillance and statistical network analysis and data mining. Anonymity is also reduced to the extent that certain Exchanges and other service providers collect users’ personal information, because such Exchanges and service providers may be required to produce users’ information in order to comply with legal requirements. In many cases, a user’s own activity on the Blockchain Network or on Internet forums may reveal information about the user’s identity.
Users may take certain precautions to enhance the likelihood that they and their transactions will remain anonymous. For instance, a user may send its cryptocurrencies to different addresses multiple times to make tracking the cryptocurrencies through the Blockchain more difficult or, more simply, engage a so-called “mixing” or “tumbling”
service to switch its cryptocurrencies with those of other users. However, these precautions do not guarantee anonymity and are illegal to the extent that they constitute money laundering or otherwise violate the law.
As with any other asset or medium of exchange, cryptocurrencies can be used to purchase illegal goods or fund illicit activities. The use of cryptocurrencies for illicit purposes, however, is not promoted by the Blockchain Network or the user community as a whole. Furthermore, we do not believe our advertising, marketing, and consulting services has exposure to such uses because the services we provide are curated by our management and team.
DESCRIPTION OF SUBSIDIARIES
The following subsidiaries are incorporated in the financials for the year ending April 30, 2021, but have been discontinued as operational elements of BOTS, Inc.
First Bitcoin Capital, LLC
On May 14, 2020, we acquired 100% of First Bitcoin Capital, LLC (“FBC”). FBC was incorporated on December 11, 2017, under the laws of the state of Colorado. FBC works in multiple areas of blockchain development and cryptocurrency.
CoinQX Exchange Limited
On May 14, 2020, we acquired 100% of CoinQX Exchange, Limited (“CoinQX”). CoinQX was incorporated on July 4, 2014, in British Columbia, Canada. CoinQX has not yet begun operations.
420Wifi.com, llc
On May 14, 2020, we acquired 100% of 420wifi.com, llc (“420wifi”). 420wifi was organized on January 18, 2019, under the laws of the state of Wyoming. 420wifi has not yet begun operations.
D’BOT Technology Corp
On May 14, 2020, we acquired 100% of D’BOT Technology Corp (“DBOT”). DBOT was incorporated on March 15, 2019, under the laws of the state of Colorado.
BUSINESS MODEL
The Company continues to look at increasing revenue internally and through strategic acquisitions. The Company utilizes many methods of identifying new products to produce and potential companies to acquire. Our staff continually reviews current market trends to determine appropriate products to introduce or develop. We have had them presented to us by business brokers, have reviewed competition and looked for compelling stories, or incorporated a subsidiary directly for a specific purpose. In some instances, the companies come looking to us for assistance. We will continue to finance additional acquisitions through private placements of stock, debt, or revenue from operations.
The BOTS business model is built around developing and incubating self-sustaining business entities in the technology space. We look for strong management teams that have expertise in their fields and want to operate within the Blockchain, Robotic Automation and Bitcoin mining industry. Once the entities are self-sustaining the company divest them either through i) a sale of the assets, ii) a spin-off into its own publicly traded entity, or iii) seek additional partners and privatize the business.
Expansion through Acquisition
The Company continues to look for additional acquisition opportunities in the Blockchain, Robotic Automation and Bitcoin mining industry that will enhance our overall growth, complement our existing operations and increase shareholder value. BOTS considers acquisitions as a critical element to our strategic growth. We look for synergistic companies that will provide strength and growth opportunities to the developing products and services of BOTS. We will review current competition in many markets and determine if an acquisition or joint venture is in the best interest of BOTS.
Marketing and Sales Strategy
BOTS marketing and sales strategy is subject to change quickly and often. When we evaluate a new product or service, we place considerable analysis on immediate return on investment (during initial 12-month period of launch) as the future long-term opportunities are uncertain and highly speculative. In instances where a client has demonstrated an ability to continue to control a market share the Company may consider long term sales as well.
Our products and services are marketed directly through each subsidiary. As we continue to acquire companies or services, we look for synergic growth opportunities that will allow for expansion of the multiple services available under our umbrella of companies. The growth in revenue created by the cross pollination of products and services are desirable.
The Company continues to utilize newsletters, advertisement, and viral knowledge of our services to expand our customer base. The Company utilizes all social media platforms to grow its customer awareness.
Patents and Intellectual Properties
The Company owns patent number US9135787 “Bitcoin kiosk/ATM device and system integrating enrollment protocol and method of using the same”. The Company also has an exclusive rights to the additional Bitcoin ATM patent USPTO No. US10332205B1 “Bitcoin kiosk/ATM device and system and method of using the same” and US20190318326A1
In addition, the Company has a patent application number US20180315072A1 entitles “Method and system of facilitating management of cryptocurrency-based loyalty points associated with one or more of a product and a service”.
The Company is developing Intellectual Property (I.P.) licensing guidelines for the Bitcoin ATM operators and manufacturers. Copies of the guidelines are available upon request from the Company. These Intellectual-Property Guidelines are designed to help Bitcoin ATM operators implement practical, internal licensing compliance policies consistent with our patents together with the related I.P. laws and to reduce the business risks associated with counterfeiting, piracy, and transaction cybersecurity.
Bitcoin ATM companies, large and small, increasingly use and rely on intellectual property-the copyright, trademark, patents, trade secrets, and other intangible rights that underlie many products and services in the cryptocurrency ATM industry today. The “intellectual capital” embodied in inventions and creative content can be crucial to economic growth and business development as traditional capital, goods, and services.
I.P. protections provide the incentives and returns on investments for intellectual capital necessary to produce a continuous stream of innovations in crypto and blockchain economies. These make individual companies, industry sectors, and national economies more competitive.
These Intellectual-Property Bitcoin ATM IP Guidelines are designed to be helpful to a wide range of businesses involved in the Bitcoin ATM industry, including ATM manufacturers, banks, and non-bank Bitcoin ATM operators and are suitable to be tailored to deal more specifically with particular segments of the Bitcoin ATM supply chain.
These guidelines may be used directly as a basis for a Bitcoin ATM company to create or improve internal I.P. compliance, company policies, or employee manuals. The terms of these Guidelines can also be included in contracts between BOTS Inc and suppliers, such as ATM kiosk manufacturers.
They are also suitable for adoption as the basis of an I.P. compliance certification, whether voluntary or mandatory, in the Bitcoin ATM industry.
Also, these Guidelines are intended to be a “living document” capable of evolving to respond to the challenges of new technologies and globalization, and political and economic trade pressures. Like the intellectual property system more generally, these Guidelines are intended as a balanced approach that respects the legitimate interests of I.P. rights owners, other stakeholders as well as the Bitcoin ATM business community.
I.P. guidelines are compliant with U.S. Antitrust Laws and regulations.
Research published by Statista.com indicates that the number of Bitcoin ATMs worldwide grew by every passing month since 2015, reaching new highs in 2021. As of January 1, 2021, there were nearly 14,000 Bitcoin ATMs worldwide. As far as Bitcoin ATMs are concerned, there are two main types of such ATMs: the basic ones, allowing the users only to purchase Bitcoins, and more complex ones, enabling the users both to buy and sell the virtual money. In the case of complex ATMs, only the members of a particular ATM producer can use the ATM. As of July 2020, the leading manufacturers of the Bitcoin ATMs were Genesis Coin and General Bytes, with 34.6 percent and 30.3 percent of the market share, respectively. The highest number of Bitcoin ATMs was recorded in the United States as of July 2020. In total, approximately 83 percent of global ATMs were concentrated in North America.
EMPLOYEES AND CONSULTANTS
As of April 30, 2021, the Company has a total of 3 full-time/part-time employees and consultants throughout the various subsidiaries. None of our employees are covered by a collective bargaining agreement, and management believes its relationship with our employees is good.
The Company utilizes a number of consultants to provide periodic work requirements. When workflow demands a fulltime or justifiable part-time employee the Company hires the appropriate person to fulfill the job requirements.
Available Information
All reports of the Company filed with the SEC are available free of charge through the SEC’s Web site at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.
ITEM 1. A. RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully consider the following risk factors as well as other information contained herein, including our financial statements and the related notes. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could materially and adversely affected. In that case, the trading price of our securities could decline, and you may lose some or all of your investment.
RISK RELATED TO OUR BUSINESS AND INDUSTRY
We have incurred losses in the past and cannot assure you that we will achieve or maintain profitable operations.
As of April 30, 2021, we had an accumulated deficit of $21,176,122. Our accumulated deficit is primarily due to, among other reasons, the establishment of our business infrastructure and operations, stock-based compensation expenses and increases in our marketing expenditures to grow sales. For the year ended April 30, 2021, we had net loss of $8,026,463 compared to a net loss of $3,883,988 for the year ended April 30, 2020. We cannot assure you that we will generate operating profits now or in the immediate future, or be able to on, a sustainable basis, continue to expand our infrastructure, further develop our marketing efforts and otherwise implement our growth initiatives.
We make product and investment decisions that may not prioritize short-term financial results.
We frequently make product and investment decisions that may not prioritize short-term financial results if we believe that the decisions are consistent with our mission and improve our financial performance over the long term. We may introduce changes to existing services, or introduce new stand-alone services, that direct our customers away from our current services. We are also investing in new products and services, and we may not successfully monetize such experiences. We also may take steps that result in limiting distribution of products and services in the short term in order to attempt to ensure the availability of our products and services to users over the long term. These decisions may not produce the long-term benefits that we expect, in which case our customer growth and our business results of operations could be harmed.
We face intense competition and our failure to compete effectively could have a material adverse effect on our business, results of operations and financial condition.
Some of our current and potential competitors may have significantly greater resources or better competitive positions in certain product segments, geographic regions or user demographics than we do. These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market conditions. We believe that some of our users are aware of and actively engaging with other services similar to, or as a substitute for, our services, and we believe that some of our users have reduced their use of and engagement with our product in favor of these other services. In the event that our users increasingly engage with other services, we may not experience the anticipated growth, or see a decline, in use and engagement in key user demographics or more broadly, in which case our business would likely be harmed.
Our competitors may develop products, features, or services that are like ours or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies.
We believe that our ability to compete effectively depends upon many factors both within and beyond our control, including:
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the popularity, usefulness, ease of use, performance, and reliability of our services compared to our competitors’ services;
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the size and composition of our user base;
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the engagement of our users with our products and competing services;
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the timing and market acceptance of services, including developments and enhancements to our or our competitors’ services;
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our ability to distribute our services to new and existing users;
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our ability to monetize our services;
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the frequency, size, format, quality, and relative prominence of the ads displayed by us or our competitors;
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customer service and support efforts;
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marketing and selling efforts, including our ability to measure the effectiveness of our ads and to provide marketers with a compelling return on their investments;
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our ability to establish and maintain developers’ interest in building mobile and web applications that integrate with Facebook and our other services;
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our ability to establish and maintain publisher interest in integrating their content with Facebook and our other services;
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changes mandated by legislation, regulatory authorities, or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on us;
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acquisitions or consolidation within our industry, which may result in more formidable competitors;
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our ability to attract, retain, and motivate talented employees, particularly software engineers, designers, and product managers;
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our ability to cost-effectively manage and grow our operations; and
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our reputation and brand strength relative to those of our competitors.
If we are not able to compete effectively, our user base and level of user engagement may decrease, we may become less attractive to developers and marketers, and our revenue and results of operations may be materially and adversely affected.
Credit card payment processors and merchant account pose a risk.
We accept credit cards as a means of payment for the sale of our services. If we are unable to find suitable providers or an alternative method of payment for our customers, our cash-flow will be constrained and our sales may be affected which may have a material adverse effect on our performance, financial condition and results of operations.
Our costs are continuing to grow, which could harm our business and profitability.
Operating our business is costly, and we expect our expenses to continue to increase in the future as we broaden our products and services, and as these services and products increase, the amount of customer support and management needed increases. The development of new products and services, expanding our technical infrastructure, and the hiring of additional personnel will add cost to our expanding operations. We expect to continue to invest in our global efforts and other initiatives, which may not have clear paths to monetization. We may also be subject to increased costs in order to obtain and attract third-party content or to facilitate the distribution of our services. Any investments may not be successful, and any such increases in our costs may adversely affect our business and profitability.
If we are unable to protect our intellectual property, the value of our brands and other intangible assets may be diminished, and our business may be adversely affected.
We rely and expect to continue to rely on a combination of confidentiality, assignment, and license agreements with our employees, consultants, and third parties with whom we have relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect our proprietary rights. In the United States and internationally, we have filed various applications for protection of certain aspects of our intellectual property. Third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business. In any or all these cases, we may be required to expend significant time and expense in order to prevent infringement or to enforce our rights. Although we have generally taken measures to protect our proprietary rights, there can be no assurance that others will not offer products or concepts that are substantially like ours and compete with our business. Any of these events could have an adverse effect on our business and financial results.
We plan to continue to make acquisitions, which could harm our financial condition or results of operations and may adversely affect the price of our common stock.
As part of our business strategy, we have made and intend to continue to make acquisitions to add specialized employees and complementary companies, products, or technologies. We may not be able to find suitable acquisition candidates, and we may not be able to complete acquisitions on favorable terms, if at all. In some cases, the costs of such acquisitions may be substantial. There is no assurance that we will receive a favorable return on investment for these or other acquisitions.
We may pay substantial amounts of cash or incur debt to pay for acquisitions, which could adversely affect our liquidity. The incurrence of indebtedness would also result in increased fixed obligations, increased interest expense, and could also include covenants or other restrictions that would impede our ability to manage our operations. We may also issue equity securities to pay for acquisitions, which could increase our expenses, adversely affect our financial results, and result in dilution to our stockholders. In addition, any acquisitions we announce could be viewed negatively by customers, shareholders, or investors, which may adversely affect our business or the price of our common stock.
In the future, we may use shares of preferred stock as consideration in connection with acquisitions. However, we may not be able to issue shares of preferred stock because companies that we are interested in acquiring may not agree to accept shares that carry no voting rights, or for other reasons. Companies that we seek to acquire may also demand more shares in exchange for accepting such stock as consideration. In such instances, we may need to pay cash, issue common stock as consideration, or issue a relatively greater number of shares of preferred stock to consummate the acquisitions.
We may also discover liabilities or deficiencies associated with the companies or assets we acquire that were not identified in advance, which may result in significant unanticipated costs. The effectiveness of our due diligence review and our ability to evaluate the results of such due diligence are dependent upon the accuracy and completeness of statements and disclosures made or actions taken by the companies we acquire or their representatives, as well as the limited amount of time in which acquisitions are executed. In addition, we may fail to accurately forecast the financial impact of an acquisition transaction, including tax and accounting charges. Acquisitions may also result in our recording of significant additional expenses to our results of operations and recording of substantial finite-lived intangible assets on our balance sheet upon closing. Any of these factors may adversely affect our financial condition or results of operations.
We may not be able to successfully integrate our acquisitions, and we may incur significant costs to integrate and support the companies we acquire.
The integration of acquisitions requires significant time and resources, and we may not manage these processes successfully. Our ability to successfully integrate complex acquisitions is unproven, particularly with respect to companies that have significant operations or that develop products where we do not have prior experience. We cannot assure you that these investments will be successful. If we fail to successfully integrate the companies we acquire, we may not realize the benefits expected from the transaction and our business may be harmed.
If our goodwill or finite-lived intangible assets become impaired, we may be required to record a significant charge to earnings.
We review our finite lived intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable, such as a decline in stock price and market capitalization. We test goodwill for impairment at least annually. If such goodwill or finite lived intangible assets are deemed to be impaired, an impairment loss equal to the amount by which the carrying amount exceeds the fair value of the assets would be recognized. We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill or finite lived intangible assets is determined, which would negatively affect our results of operations.
In addition, some members of our management do not have significant experience managing a large global business operation, so our management may not be able to manage such growth effectively. To effectively manage our growth, we must continue to improve our operational, financial, and management processes and systems and to effectively expand, train, and manage our employee base. As our organization continues to grow, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products. This could negatively affect our business performance.
We have plans to continue expanding our operations abroad where we have limited operating experience, and this may subject us to increased business and economic risks that could affect our financial results.
We may enter new international markets where we have limited or no experience in marketing, selling, and deploying our services. Our services are generally available globally through the web and on mobile, but some or all our services or functionality may not be available in certain markets due to legal and regulatory complexities. We also outsource certain operational functions to third-party vendors globally. If we fail to deploy, manage, or oversee our international operations successfully, our business may suffer. In addition, we are subject to a variety of risks inherent in doing business internationally, including:
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political, social, or economic instability;
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risks related to legal, regulatory, and other government scrutiny applicable to U.S. companies with sales and operations in foreign jurisdictions, including with respect to privacy, tax, law enforcement, content, trade compliance, intellectual property, and terrestrial infrastructure matters;
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potential damage to our brand and reputation due to compliance with local laws, including potential censorship or requirements to provide user information to local authorities;
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fluctuations in currency exchange rates and compliance with currency controls;
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foreign exchange controls and tax regulations that might prevent us from repatriating cash earned in countries outside the United States or otherwise limit our ability to move cash freely, and impede our ability to invest such cash efficiently;
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higher levels of credit risk and payment fraud;
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enhanced difficulties of integrating any foreign acquisitions;
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burdens of complying with a variety of foreign laws;
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reduced protection for intellectual property rights in some countries;
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difficulties in staffing, managing, and overseeing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations;
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compliance with the U.S. Foreign Corrupt Practices Act, and similar laws in other jurisdictions; and
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compliance with statutory equity requirements and management of tax consequences.
If we are unable to expand internationally and manage the complexity of our global operations successfully, our financial results could be adversely affected.
The Company has entered into indemnification agreements with the officers and directors and we may be required to indemnify our Directors and Officers, which could create significant losses for the Company.
We have authority under Puerto Rico law to indemnify our directors and officers to the extent provided in that statute. Our Articles of Incorporation require the Company to indemnify each of our directors and officers against liabilities imposed upon them (including reasonable amounts paid in settlement) and expenses incurred by them regarding any claim made against them or any action, suit or proceeding to which they may be a party by reason of their being or having been a director or officer of the company. We currently do not maintain officer’s and director’s liability insurance coverage. Consequently, any judgment against our Officers and Directors, the Company will be forced to pay. We have entered into indemnification agreements with each of our officers and directors containing provisions that may require us, among other things, to indemnify our officers and directors against certain liabilities that may arise because of their status or service as officers or directors (other than liabilities arising from willful misconduct of a culpable nature) and to advance their expenses incurred because of any proceeding against them as to which they could be indemnified. Management believes that such indemnification provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. We are subject to claims arising from disputes with employees, vendors and other third parties in the normal course of business. These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time. If the plaintiffs in any suits against us were to successfully prosecute their claims, or if we were to settle such suits by making significant payments to the plaintiffs, our operating results and financial condition would be harmed. In addition, our organizational documents require us to indemnify our senior executives to the maximum extent permitted by Puerto Rico law. If our senior executives were named in any lawsuit, our indemnification obligations could magnify the costs of these suits.
RISK ASSOCIATED WITH CRYPTOCURRENCY & BLOCKCHAIN INDUSTRY
We have an evolving business model that will require significant resources, and our upcoming business model may not develop as we project.
As blockchain technology becomes more widely available and utilized, we expect the services and products associated with them to evolve and, as a result our contemplated blockchain consulting business will have to continue to evolve. Distributed ledger technology is relatively new, and we believe that it will take significant resources to become a competitive provider of consulting services relating to the application of distributed ledger technology. Future additions and modifications to our business will increase the complexity of our business and may place significant strain on our management, personnel, and operations.
If we do not keep pace with technological changes, our blockchain consulting business, when developed, may not become competitive and/or our competitors may develop and market similar products that receive greater market acceptance.
The market for blockchain technology and any related consulting services is characterized by rapid technological change, frequent product and service innovation and evolving industry standards. As a result, our contemplated blockchain consulting business must be able to keep pace with this rapidly developing and competitive marketplace. There can be no assurance that we will be able to successfully grow our contemplated blockchain consulting business.
We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest, and similar matters.
Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or the Nasdaq Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors’ independence, and audit committee oversight. We have not yet adopted any of these corporate governance measures and, since our securities are not yet listed on a national securities exchange, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.
If we are unable to retain our staff, our business and results of operations could be harmed.
Our ability to develop our blockchain consulting business is largely dependent on the services of certain executive officers and other employees and contractors which assist such individuals in management and operation of the business (collectively, “Key Personnel”). If we are unable to retain Key Personnel and to attract qualified senior management on terms satisfactory to us, our business will be adversely affected. We do not have key man life insurance covering the life of any executive officers and, even if we are able to afford such a key man policy, our coverage levels may not be sufficient to offset any losses we may suffer as a result of the loss of any Key Personnel.
We may acquire stakes in businesses and enter joint ventures that will expose us to increased operating risks.
As part of our growth strategy, we intend to enter joint venture arrangements intended to complement or expand our business and will likely continue to do so in the future. These joint ventures are subject to substantial risks and liabilities associated with their operations, as well as the risk that our relationships with our joint venture partners fail in the manner that we can’t anticipate.
Current and future litigation could adversely affect us.
We, along with certain directors and/or officers of the Company may become subject to other legal proceedings in our ordinary course of business. Such legal proceedings involve substantial costs, including the costs associated with investigation, litigation and possible settlement, judgment, penalty or fine. As a smaller company, the collective costs of litigation proceedings represent a drain on our cash resources, as well as an inordinate amount of our management’s time and attention. Moreover, an adverse ruling in respect of certain litigation could have a material adverse effect on our results of operation and financial condition.
We may face competition and, if we are not able to effectively compete in our markets, our revenues may decrease.
Competitive pressures in our markets could adversely affect our competitive position, leading to a possible loss of customers or a decrease in prices, either of which could result in decreased revenues and profits. Though the market sectors in which we compete are new, our competitors are numerous, and the recent increase in popularity of such market sectors only creates more competition. New or current competitors may have significantly greater capital resources than us, and our business could be adversely affected because of increased competition from such competitors.
We are in the development stage, are not generating revenue in our continuing operations, and have a limited operating history in providing consulting services.
The Company is in the development stage and faces all the risks and uncertainties associated with a new and unproven business. Our future is based on an unproven business plan with no historical facts to support projections and assumptions. The Company was founded in March 2017 and has limited history of providing blockchain consulting services. The Company is not currently generating revenues and cannot guarantee when it expects to generate revenue. Investors should understand that an investment in a start-up business is significantly riskier than an investment in a business with any significant operating history. There can be no assurance that the Company will ever achieve revenues or profitability. The Company’s operations are subject to all of the risks inherent in the establishment of a new business enterprise. The likelihood of our success must be considered in light of the challenges, expenses and delays frequently encountered in connection with the operation of a pre-revenue business. Our lack of a significant and relevant operating history makes it difficult to predict future operating results.
If our remedial measures are insufficient to address material weaknesses and we are unable to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, timely file our periodic reports, maintain our reporting status or prevent fraud.
Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement new or improved controls, or if we experience difficulties in their implementation, our business and financial results could be harmed and we could fail to meet our financial reporting obligations.
Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, detected or corrected on a timely basis. If the enhanced controls implemented to remediate and address the material weaknesses are not designed or do not operate effectively, if we are unsuccessful in implementing or following these processes, if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, or we are otherwise unable to remediate the material weaknesses, this may result in untimely or inaccurate reporting of our financial results.
We may be forced to cease operations or take actions that result in the dissolution of the Company.
It is possible that, due to any number of reasons, including, but not limited to, regulations that decrease interests in or inhibit the growth of Blockchain technology, the inability by the Company to maintain its competitiveness among companies operating in similar market sectors, the failure of commercial relationships, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve or take actions that result in a dissolution event.
RISKS ASSOCIATED WITH OUR COMMON STOCK
The market price of our common stock has been and may continue to be volatile or may decline regardless of the Company’s operating performance, and you may not be able to resell your shares at or above the initial public offering price and the price of our common stock may fluctuate significantly.
Since the commencement of trading of our common stock on the OTC Markets, the market price of our common stock has been volatile and fluctuates widely in price in response to various factors, which are beyond our control. Since the commencement of trading of our common stock on the OTC Markets, the price of our common stock went from $0.02 per share to almost $0.90 per share. The price of the stock as of fiscal year ending April 30, 2021, was trading at $0.11 per share. We attribute this large fluctuation especially on the industry that we operate in. Management believes that when the industry is doing well, we believe our stock price will benefit but when the industry is experiencing a downturn, we will not be immune from the decline.
Furthermore, we must note that the price of our common stock is not necessarily indicative of our operating performance or long-term business prospects. In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of companies. These market fluctuations may also materially and adversely affect the market price of our common stock. Factors such as the following could cause the market price of our common stock to fluctuate substantially:
Volatility in our common stock price may subject us to securities litigation.
The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities to us and could divert our management’s attention and resources from managing our operations and business.
The Company may issue more shares in connection with future mergers or acquisitions, which could result in substantial dilution to existing shareholders.
Our Certificate of Incorporation authorizes the issuance of 2,000,000,000 shares of common stock. Any future merger or acquisition effected by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then- current stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a future business combination or otherwise, dilution to the interests of our stockholders will occur, and the rights of the holders of common stock could be materially and adversely affected.
We do not anticipate paying cash dividends for the foreseeable future, and therefore investors should not buy our stock if they wish to receive cash dividends.
We have not paid dividends in the past and do not expect to pay dividends for the foreseeable future, and any return on investment may be limited to potential future appreciation on the value of our common stock.
We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after considering various factors, including without limitation, our financial condition, operating results, cash needs, growth plans, and the terms of any credit agreements that we may be party to at the time. To the extent we do not pay dividends, our stock may be less valuable because a return on investment will only occur if and to the extent our stock price increases, which may never occur. In addition, investors must rely on sales of their common stock after price appreciation as the only way to realize their investment, and if the price of our stock does not appreciate, then there will be no return on investment. Investors seeking cash dividends should not purchase our common stock.
Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.
Our common stock is a “penny stock.” It does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Exchange Act. Our common stock is a “penny stock” because it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange or (iii) it is not quoted on the NASDAQ Global Market or has a price less than $5.00 per share. The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock are subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Securities Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker- dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives;
(ii)reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.
FINRA sales practice requirements may limit a shareholder’s ability to buy and sell our common shares.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Rule 144 sales in the future may have a depressive effect on the company's stock price as an increase in supply of shares for sale, with no corresponding increase in demand will cause prices to fall.
All of the outstanding shares of common stock held by the present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act of 1933 and as required under applicable state securities laws. Rule 144 provides in essence that a person who is an affiliate or officer or director who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a Company's issued and outstanding common stock. There is no limit on the amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of six months if the Company is a current reporting company under the Securities Exchange Act of 1934. A sale under Rule 144 or under any other exemption from the Securities Act of 1933, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.
Future issuances of shares for various considerations including working capital and operating expenses will increase the number of shares outstanding which will dilute existing investors and may have a depressive effect on the company's stock price.
There may be substantial dilution to our shareholders purchasing in future offerings as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, payment of debt or acquisitions.
There may in all likelihood be little demand for shares of our common stock and as a result investors may be unable to sell at or near ask prices or at all if they need to liquidate their investment.
There may be little demand for shares of our common stock on the OTC Bulletin Board, or OTC Markets.com, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that it is a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if the Company came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of any of our Securities until such time as it became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in the Company's securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on the securities price. We cannot give investors any assurance that a broader or more active public trading market for the Company's common securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give investors no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities of the Company.
Public disclosure requirements and compliance with changing regulation of corporate governance pose challenges for our management team and result in additional expenses and costs which may reduce the focus of management and the profitability of our company.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.
SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED.
ITEM 1. B. UNRESOLVED STAFF COMMENTS
Not Applicable

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ITEM 1A. RISK FACTORS

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ITEM 1B. UNRESOLVED STAFF COMMENTS

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
CORPORATE HEADQUARTERS
We currently lease our corporate office facilities in Puerto Rico through a registered agent service. Our lease expires on December 31, 2021.
In addition to corporate headquarters, we maintain an office in Athens, Greece for international intellectual property rights for Europe, Middle East, and Africa, where applicable. The facilities are co-located in the operations of our paid Consultants and all rent cost are incorporated in our payments to the Consultants.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. Except as set forth below we are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET INFORMATION
Our common stock is quoted on the OTC Markets under the symbol BOTS. The following table sets forth for the periods indicated the range of high and low bid quotations per share as reported by the OTCQB. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not represent actual transactions.
Period
High
Low
May 1, 2019, through July 31, 2019
$ 0.08
$ 0.05
August 1, 2019, through October 31, 2019
$ 0.07
$ 0.03
November 1, 2019, through January 31, 2020
$ 0.08
$ 0.02
February 1, 2020, through April 30, 2020
$ 0.09
$ 0.03
May 1, 2020, through July 31, 2020
$ 0.04
$ 0.02
August 1, 2020, through October 31, 2020
$ 0.05
$ 0.03
November 1, 2020, through January 31, 2021
$ 0.05
$ 0.04
February 1, 2021, through April 30, 2021
$ 0.20
$ 0.05
The closing price of our common stock as reported on the OTC Marketplace was $0.11 on April 30, 2021.
HOLDERS
As of April 30, 2021, there were approximately 166 owners of record for our common stock. This does not include an indeterminate number of stockholders whose shares may be held by brokers in street name. The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There is no redemption or sinking fund provisions applicable to the common stock.
Transfer Agent and Registrar
Our independent stock transfer agent is Securities Transfer Corporation, 2901 N. Dallas Parkway, STE 380, Plano, TX 75093 Telephone: (469) 633-0101
DIVIDENDS
We have never paid or declared any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to fund the expansion of our business, and we do not anticipate paying any cash dividends for the foreseeable future following this offering. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors deems relevant. In addition, the terms of any future debt or credit facility may preclude us from paying dividends.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Under its Year 2016 Stock Option Plan (the “Plan”), the Company grants stock options for a fixed number of shares to employees and directors with an exercise price equal to the fair market value of the shares at the date of grant.
Options granted under the Plan are exercisable at the exercise price of grant and, subject to termination of employment, expire five years from the date of issue, are not transferable other than on death, and vest in monthly installments commencing at various times from the date of grant. A summary of the Company’s stock option plan as of April 30, 2021, is presented below:
Shares
Options outstanding at May 1, 2020
11,550,000
Granted in FY 2020
-
Forfeited in FY 2020
-
Exercised in FY 2020
-
Options outstanding at April 30, 2020
11,550,000
Options outstanding at May 1, 2020
11,550,000
Granted in FY 2021
-
Forfeited in FY 2021
-
Exercised in FY 2021
-
Options outstanding at April 30, 2021
11,550,000
Options exercisable at April 30, 2021
11,550,000
There are currently 11,550,000 unissued options under the 2016 Stock Option Plan.
RECENT SALES OF UNREGSTERED SECURITIES
In the year ended April 30, 2020, we issued an aggregate of 4,750,000 shares of common stock valued at approximately $181,040 for professional services. In addition, the Company issued 2,600,000 common shares for investments in the amount of $650,000. Furthermore, we issued 2,300,000 in a legal settlement valued at $190,900.
In the year ended April 30, 2021, we issued an aggregate of 155,500,000 shares of common stock valued at $4,008,000 for professional services. In addition, the Company issued 100,000,000 shares of common stock and 30,000,000 shares of preferred stock for acquisition valued at $3,000,000. Finally, we issued 15,000,000 shares of common stock for debt owed valued at $375,000.
The issuance of such shares of our common stock was effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933, as mended (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.
ISSUER PURCHASES OF EQUITY SECURITIES
None.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA.
We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Management’s Discussion and Analysis of Results of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the financial statements included herein. Further, this MD&A should be read in conjunction with the Company’s Financial Statements and Notes to Financial Statements included in this Annual Report on Form 10-K for the years ended April 30, 2021 and 2020, as well as the “Business” and “Risk Factors” sections within this Annual Report on Form 10-K. The Company's financial statements have been prepared in accordance with United States generally accepted accounting principles.
Management’s Discussion and Analysis may contain various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-K, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company has adopted the most conservative recognition of revenue based on the most astringent guidelines of the SEC. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.
Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.
Any future equity financing will cause existing shareholders to experience dilution of their interest in our Company. In the event we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource sector. Any business opportunity would require our management to perform diligence on possible acquisitions.
During this period, we will need to maintain our periodic filings with the appropriate regulatory authorities and will incur legal and accounting costs. In the event no other such opportunities are available, and we cannot raise additional capital to sustain operations, we may be forced to discontinue business. We do not have any specific alternative business opportunities in mind and have not planned for any such contingency.
The Company's MD&A is comprised of significant accounting estimates made in the normal course of its operations, overview of the Company's business conditions, results of operations, liquidity and capital resources and contractual obligations.
The discussion and analysis of the Company’s financial condition and results of operations is based upon its financial statements, which have been prepared in accordance with generally accepted accounting principles generally accepted in the United States (or "GAAP"). The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities at the date of its financial statements. Actual results may differ from these estimates under different assumptions or conditions.
OVERVIEW
Blockchain and Cryptocurrencies Generally
We are in the process of transitioning into the blockchain and robotics automation industries.
Distributed blockchain technology is a decentralized and encrypted ledger that is designed to offer a secure, efficient, verifiable, and permanent way of storing records and other information without the need for intermediaries. Cryptocurrencies serve multiple purposes. They can serve as a medium of exchange, store of value or unit of account. Examples of cryptocurrencies include: bitcoin, bitcoin cash, and litecoin. Blockchain technologies are being evaluated for a multitude of industries due to the belief in their ability to have a significant impact in many areas of business, finance, information management, and governance.
Cryptocurrencies are decentralized currencies that enable near instantaneous transfers. Transactions occur via an open source, cryptographic protocol platform which uses peer-to-peer technology to operate with no central authority. The online network hosts the public transaction ledger, known as the blockchain, and each cryptocurrency is associated with a source code that comprises the basis for the cryptographic and algorithmic protocols governing the blockchain. In a cryptocurrency network, every peer has its own copy of the blockchain, which contains records of every historical transaction - effectively containing records of all account balances. Each account is identified solely by its unique public key (making it effectively anonymous) and is secured with its associated private key (kept secret, like a password). The combination of private and public cryptographic keys constitutes a secure digital identity in the form of a digital signature, providing strong control of ownership.
No single entity owns or operates the network. The infrastructure is collectively maintained by a decentralized public user base. As the network is decentralized, it does not rely on either governmental authorities or financial institutions to create, transmit or determine the value of the currency units. Rather, the value is determined by market factors, supply and demand for the units, the prices being set in transfers by mutual agreement or barter among transacting parties, as well as the number of merchants that may accept the cryptocurrency. Since transfers do not require involvement of intermediaries or third parties, there are currently little to no transaction costs in direct peer-to-peer transactions. Units of cryptocurrency can be converted to fiat currencies, such as the US dollar, at rates determined on various exchanges, such as Cumberland, Coinsquare (in Canada), Coinbase, Bitsquare, Bitstamp, and others. Cryptocurrency prices are quoted on various exchanges and fluctuate with extreme volatility.
We believe cryptocurrencies offer many advantages over traditional, fiat currencies, although many of these factors also present potential disadvantages and may introduce additional risks, including:
·
acting as a fraud deterrent, as cryptocurrencies are digital and cannot be counterfeited or reversed arbitrarily by a sender;
·
immediate settlement;
·
elimination of counterparty risk;
·
no trusted intermediary required;
·
lower fees;
·
identity theft prevention;
·
accessible by everyone;
·
transactions are verified and protected through a confirmation process, which prevents the problem of double spending;
·
decentralized - no central authority (government or financial institution); and
·
recognized universally and not bound by government imposed or market exchange rates.
However, cryptocurrencies may not provide all of the benefits they purport to offer at all or at any time.
Bitcoin was first introduced in 2008 and was first introduced as a means of exchange in 2009. Bitcoin is a consensus network that enables a new payment system and a completely new form of digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, we believe bitcoin can be viewed as cash for the Internet. The bitcoin network shares a public ledger called the “blockchain.” This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins currency rewards from their own bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This process is often called “mining.”
As with many new and emerging technologies, there are potentially significant risks. Businesses (including the Company) which are seeking to develop, promote, adopt, transact or rely upon blockchain technologies and cryptocurrencies have a limited track record and operate within an untested new environment. These risks are not only related to the businesses the Company pursues, but the sector and industry as a whole, as well as the entirety of the concept behind blockchain and cryptocurrency as value. Factors such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity) and location play an important role in “mining,” which is the term for using the specialized computers in connection with the blockchain for the creation of new units of cryptocurrency.
The Company is engaged in the business of digital cryptocurrency development and blockchain development.
More regulations expected
2019 revealed a growing awareness on the part of federal agencies that cryptocurrency (and technology in general) is beginning to become less a component of society and more of the core element of it. The Federal Reserve revealed recently the U.S. central bank is mulling over a potential digital analogue for the greenback. Meanwhile, the Internal Revenue Service has firmed up its guidance on reporting cryptocurrency transactions for the coming tax season.
Now with one of the biggest and most controversial tech companies in the world getting in on the cryptocurrency game, the cryptocurrency industry will likely see local and national governments pay closer attention to the digital currencies, for good or ill. For his part, Benzinga sees the current outlook on guidance and regulations in cryptocurrency as mostly benign.
While most of the current legislation has been encouraging, ongoing experiments may cut both ways for the larger cryptocurrency market. Supportive regulations like those highlighted by Alex promise to foster growth and increase transparency throughout the industry. On the other hand, highly restrictive regulations like those coming out of China could mean increased turmoil for digital assets.
The Market Consolidations
Turmoil might be a characteristic feature lower on the cryptocurrency food chain. Because, despite flattening in 2018 as the price of bitcoin fell, the number of cryptocurrencies in the market surged to more than 2300 through 2019, according to the latest account from CoinMarketCap. Unfortunately, fewer than a third of coins trade more than $100,000 of volume in a day. Meanwhile, more than a third are valued at less than a tenth of a penny. The result is that there are more coins in the cryptocurrency market now than ever before, but the total amount of capital has flatlined throughout 2019. While a potential upswing in cryptocurrency interest from mainstream finance might contribute to a subsequent increase of capital, it’s unlikely to trickle down to the very smallest coins. What’s more, as greater scrutiny comes to the market, regulatory burdens and increased transparency among the larger players will likely root out those just trying to make quick coin. In any case, the market has probably reached a saturation point, and the number of available coins is likely to grow through 2021.
Crypto and Fintech Hook Up
The overarching theme of all of these trends is that cryptocurrency is growing up, becoming mainstream and finally finding actual use cases, rather than just hypothetical ones. With the introduction of Libra, the problem isn’t explaining why cryptocurrency will be valuable and necessary soon but making it valuable and necessary now - do or die. There are obviously questions about how transactions will be implemented across an array of ledgers or how anonymized transactions can be regulated. Part of this will come in the consolidation of the industry and the continued struggle for interoperability between wallets and ledgers. However, most of these questions will likely be answered by whoever tries first, and financial technology companies are by far the most eager to fill that role.
This necessity of innovation has been an evident trend throughout major areas of the cryptocurrency market. Libra itself is (or was) stacked with members from various fintech companies. Meanwhile, fintech unicorns like Plaid and Chime have reached their valuations largely from investments by companies in the finance industry like Visa and Goldman Sachs Group that are curious about digital assets, but terrified of the uncertainty that surrounds them.
RESULTS OF OPERATIONS
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation and contingencies.
We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations, and they require critical management judgments and estimates about matters that may be uncertain. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.
Revenue Recognition Policies
Revenues are presented net of discounts. In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on our policy for each respective element. We generate revenue primarily from sales of the electronic cigarettes, components for electronic cigarettes and related accessories. We recognize revenue when the product is shipped.
Amounts billed or collected in excess of revenue recognized are recorded as deferred revenue.
The Company measures construction revenue as a Cost-type contract in accordance with ASC 605, which discusses accounting for performance of construction contracts. The Company recognizes revenue on a cost-plus basis, provisions for reimbursable costs (which are generally spelled out in the contract), overhead recovery percentages, and fees. A fee may be a fixed amount or a percentage of reimbursable costs or an amount based on performance criteria. Generally, percentage fees may be accrued as the related costs are incurred, since they are a percentage of costs incurred, and profits therefore are recognized as costs are incurred.
Our operating results for the years ended April 30, 2021, and 2020 are summarized as follows:
For the year ended April 30,
Sales
$ -
$ 115
Total Cost of Sales
-
-
Gross Profit
-
-
Total operating expenses
4,205,939
718,386
Income (Loss) from operations
(4,205,939 )
(718,386 )
Revenue
Our revenue from continuing operations for the year ended April 30, 2021 was $0 compared to $115, a decrease of $115 or 100%, from the year ended April 30, 2020.
Cost of Goods Sold
Our cost of goods sold for the year ended April 30, 2021 was $0 compared to $0 for the year ended April 30, 2021. There were no sales in year ending April 30, 2020 therefore cost of goods sold remained the same.
Gross Profit
Our gross profit for the year ended April 30, 2021 was $0 compared to $115 for the year ended April 30, 2020. The decrease in gross profits is due to no sales from fiscal year ending April 30, 2020.
Operating Expenses
Our operating expenses increased by $3,487,553 to $4,205,939 for the year ended April 30, 2021, from $718,386 for the year ended April 30, 2020.
The increase was primarily due to increase in stock-based compensation, increasing from $273,000 in 2020 to $3,900,000 in 2021.
Our total operating expenses for the year ended April 30, 2021 of $4,205,939 consisted of $3,900,000 of stock-based compensation, $26,414 of selling, general and administrative expenses, $29,580 in professional fees, $56,543 in marketing and advertising, and $193,402 of amortization and depreciation expenses.
Our general and administrative expenses consist of bank charges, telephone expenses, meals and entertainments, computer and internet expenses, postage and delivery, travel, rent, office supplies and other expenses.
Net Income (Loss) from Operations
Our net income loss increased by $3,487,553 to a net loss of $4,205,939 for the year ended April 30, 2021 from a net loss of $718,386 for the year ending April 30, 2020. The decrease in net loss compared to the prior year is a result of an increase in operating expenses of $3,487,553.
Liquidity and Capital Resources
Cash Requirements
We had cash available of $1,935 as of April 30, 2021. Based on our revenues, cash on hand and current monthly burn rate, the company has enough cash to sustain operations for 6 months. Without the use of stock-based compensation and/or the raising of capital, the company projects it does not have enough capital to sustain operations for a period of approximately the next 12 months.
Sources and Uses of Cash
Operations
We used $84,809 in continuing operating activities for the year ended April 30, 2021, as compared to using $264,622 for the year ended April 30, 2020.
Investments
We used $5,000 in investment activities as of April 30, 2021, as compared to cash received in investing activities of $24,103 for the year ended April 30, 2020.
Financing
We received $90,064 in financing activities for the year ended April 30, 2021, as compared to cash used of $16,618 for the year ended April 30, 2020. Our financing activities for the year ending April 30, 2021 consisted of borrowing $90,064 from a related party. Our financing activities for the year ending April 30, 2021 consisted of borrowing $123,382 from a related party, while paying $140,000 in notes payable.
Off-Balance Sheet Arrangements
None
Going Concern
Our financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is relatively new and has a short history and relatively few sales, no certainty of continuation can be stated. The accompanying consolidated financial statements for the years ended April 30, 2021 and 2020 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Consolidated Balance Sheets (Unaudited)
Consolidated Statements of Operation (Unaudited)
Consolidated Statements of Stockholders' Equity (Unaudited)
Consolidated Statements of Cash Flows (Unaudited)
Notes to Consolidated Financial Statements (Unaudited)
BOTS, Inc.
and SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
April 30,
April 30,
ASSETS
Current Assets
Cash and cash equivalents
$ 1,935
$ 24,695
Notes and other receivable
1,246,146
218,257
Total current assets
1,248,081
242,952
Cost basis investment
969,071
272,945
Intangible assets, net
4,569,960
400,037
Total assets
$ 6,787,112
$ 915,934
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses
$ 16,500
$ 173,317
Due to shareholder
90,064
110,923
Other current liabilities
508,317
443,706
Total current liabilities
614,881
727,946
Total Liabilities
614,881
727,946
Stockholders' equity
Preferred stock, $0.0001 par value; 90,000,000 shares authorized; 3,350,000 and 4,350,000 shares issued and outstanding, as of April 30, 2021 and 2020, respectively.
3,335
Common stock, $0.0001 par value, voting; 2,000,000,000 shares authorized; 505,374,596 and 515,124,596, and outstanding, as of April 30, 2021 and 2020, respectively.
77,587
50,537
Treasury stock
(680,330 )
(680,330 )
Additional paid in capital
27,947,761
13,961,354
Accumulated deficit
(21,176,122 )
(13,149,69 )
Total stockholders' equity
6,172,231
202,237
Non-controlling interest
-
(14,249 )
Total equity
6,172,231
187,988
Total liabilities and stockholders' equity
$ 6,787,112
$ 915,934
See accompanying notes to unaudited consolidated financial statements.
BOTS, Inc.
and SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
For the year ended April 30,
Sales
$ -
$ 115
Gross Profit
-
Selling, general, and administrative
26,414
11,457
Professional fees
29,580
41,273
Stock based compensation
3,900,000
273,000
Marketing & advertising
56,543
30,197
Consultant fees
-
190,260
Amortization and depreciation
193,402
172,199
Total operating expenses
4,205,939
718,386
Income (Loss) from operations
(4,205,939 )
(718,386 )
Other income (expense)
47,577
-
Net income (loss) before non-controlling interest
(4,158,362 )
(718,386 )
Loss on discontinued operations
(221,840 )
(3,165,717 )
Loss from investments
(75,521 )
Net income(loss) before minority interest
(4,455,723 )
(3,883,988 )
(3,570,740 )
Net income (loss) attributable to controlling interest
$ (8,026,463 )
$ (3,883,988 )
Basic and diluted (Loss) per share:
Income(Loss) per share from continuing operations
(0.0054 )
(0.0014 )
Income(Loss) per share
(0.0103 )
(0.0076 )
Weighted average shares outstanding - basic and diluted
760,349,938
507,071,171
See accompanying notes to unaudited consolidated financial statements.
BOTS, Inc.
and SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
Additional
Non-
Total
Stockholders'
Preferred Stock
Common Stock
Treasury Stock
Paid-in
Controlling
Accumulated
Equity
Shares
Amount
Shares
Amount
Shares
Amount
Capital
Interest
Deficit
(Deficit)
Balance - April 30, 2019
4,350,000
515,124,596
51,512
1,700,000
(680,330 )
13,968,212
1,205,779
(10,471,451 )
4,074,158
Stock converted from preferred to common
(1,000,000 )
(100 )
10,000,000
1,000
-
-
(900 )
-
-
-
Stock issuedfor services
-
-
6,500,000
-
-
272,350
-
-
273,000
Stock issued for acquisitions
-
-
3,750,000
-
-
159,325
-
-
159,700
Stock cancelled
-
-
(30,000,000 )
(3,000 )
-
-
(417,633 )
-
-
(420,633 )
Net income(loss)
-
-
-
-
-
-
-
(1,191,530 )
(2,692,458 )
$ (3,883,988 )
Balance - April 30, 2020
3,350,000
505,374,596
50,537
1,700,000
(680,330 )
13,981,354
14,249
(13,163,908 )
202,237
Stock issued for services
-
-
170,500,000
17,050
-
-
4,374,390
-
-
4,391,440
Stock issued for acquisitions
30,000,000
3,000
100,000,000
10,000
-
-
9,592,017
-
-
3,003,000
Net income(loss)
-
-
-
-
-
-
-
(14,249 )
(8,012,214 )
$ (8,026,463 )
Balance - April 30, 2021
33,350,000
3,335
775,874,596
77,587
1,700,000
(680,330 )
27,947,761
-
(21,176,122 )
6,172,231
See accompanying notes to unaudited consolidated financial statements.
BOTS, Inc.
and SUBSIDIARIES
Statements of Cash Flows
(Unaudited)
For the Year Ended April 30,
Cash flows from operating activities:
Net (Loss)
(8,026,463 )
$ (3,883,988 )
Adjustments to reconcile net loss to net Cash provided by (used in) operating activities:
Depreciation and amortization
193,402
265,746
Common stock issued for services
3,900,000
273,000
Accrued Interest, Net
(54,839 )
Loss of equity method investments
-
2,799,160
Gain on sale of plant and intangible assets
-
(907,766 )
Minority Interest in earnings of subsidiaries, Net
-
(61,103 )
Effect to cash flow from discontinued operations, net
317,530
585,907
Effects in acquisitions, Net
3,546,046
Decrease (Increase) in:
Accounts receivable, net
-
77,080
Other receivables
-
402,552
Inventories
-
43,543
Prepaid expenses and other current assets
-
10,000
Accounts payable, accrued expenses and taxes payable
16,500
152,504
Deferred revenue
(21,257 )
Total adjustment to reconcile net income to net cash
3,619,366
Net cash provided In operating activities
(107,824 )
(264,622 )
Cash flows from investing activities:
Increase (Decrease) in:
Cost basis investments
-
24,103
Acquisition of property, plant and equipment
(5,000 )
-
Net cash received in investing activities
(5,000 )
24,103
Cash Flows From Financing Activities:
Borrowing from related party, net
90,064
123,382
Notes Payable
-
(140,000 )
Net Cash Provided By Financing Activities
90,064
(16,618 )
Net Change in Cash
(22,760 )
(257,137 )
Cash at Beginning of Year
24,695
281,832
Cash at End of Period
1,935
24,695
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest
$ -
$ -
Cash paid for income taxes
$ -
$ -
Non-cash Investing and Financing Activities:
Stock issued for cannabis licenses in California
-
-
Stock issued for purchase of CBJ Distributing
-
-
Stock issued for land acquisition in California
-
-
Intangible Assets exchanges for accounts payable
-
27,930
Notes receivable in exchange for accounts payable
-
100,000
Land transfer in exchange for accounts payable
-
314,105
Settlement of Due to Related Party
-
1,221,871
Joint Venture investment with BRRX Management
-
166,675
Settlement of CBJ Distributing
-
1,357,473
See accompanying notes to unaudited consolidated financial statements.
BOTS, INC.
And SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Organization and Basis of Presentation
The accompanying consolidated audited financial statements of BOTS, Inc., (the “Company”, “we”, “our”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”).
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany accounts and transactions have been eliminated.
Description of Business
We were incorporated in the State of Nevada on December 30, 2010 originally under the name Lifetech Industries, Inc. All agreements related to the Lifetech business were terminated and closed as of April 30, 2014. Effective August 2, 2013, the name was changed from "Lifetech Industries, Inc." to "mCIG, Inc.",On May 18, 2020 the Company changed name to BOTS, Inc The Company’s common stock is traded under the symbol “BTZI.” The Company is based in Puerto Rico.
Originally, we were formed to open and operate a full service day spa in Montrose, California. In October 2013 we repositioned ourselves as a technology company focused on two long-term secular trends sweeping the globe: (1) The decriminalization and legalization of marijuana for medicinal or recreational purposes; and, (2) the adoption of electronic vaporizing cigarettes (commonly known as “eCigs”).
The Company initially earned revenue through wholesale and retail sales of electronic cigarettes, vaporizers, and accessories in the United States. It offered electronic cigarettes and related products through its online store at www.BOTS.BZ, as well as through the company’s wholesale, distributor, and retail programs.
From 2015 through 2020 the Company was involved in multiple cannabis business entities. We have elected to discontinue all operations in the cannabis markets and focus on robotics.
During this fiscal year, we operated multiple websites (which are not incorporated as part of this Form 10K report). The Company’s primary website is www.BOTS.BZ.
Subsidiaries of the Company
The following subsidiaries are incorporated in the financials for the year ending April 30, 2021 but have been discontinued as operational elements of BOTS, Inc.
The following subsidiaries are incorporated in the financials for the year ending April 30, 2021, but have been discontinued as operational elements of BOTS, Inc.
First Bitcoin Capital, LLC
On May 14, 2020, we acquired 100% of First Bitcoin Capital, LLC (“FBC”). FBC was incorporated on December 11, 2017, under the laws of the state of Colorado. FBC works in multiple areas of blockchain development and cryptocurrency.
CoinQX Exchange Limited
On May 14, 2020, we acquired 100% of CoinQX Exchange, Limited (“CoinQX”). CoinQX was incorporated on July 4, 2014, in British Columbia, Canada. CoinQX has not yet begun operations.
420Wifi.com,llc
On May 14, 2020, we acquired 100% of 420wifi.com, llc (“420wifi”). 420wifi was organized on January 18, 2019, under the laws of the state of Wyoming. 420wifi has not yet begun operations.
D’BOT Technology Corp
On May 14, 2020, we acquired 100% of D’BOT Technology Corp (“DBOT”). DBOT was incorporated on March 15, 2019, under the laws of the state of Colorado.
Note 2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates include: revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation and recoverability of long-lived assets; property and equipment; contingencies; and income taxes.
On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
Revenue Recognition Policies
We intend to earn revenue from the subscription, non-software related hosted services, term-based and perpetual licensing of software products, associated software maintenance and support plans, consulting services, training, and technical support.
On February 1, 2019, we adopted Topic 606, using the modified retrospective transition method applied to those contracts which were not completed as of February 1, 2019. Results for reporting periods beginning after February 1, 2019 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on February 1, 2019.
Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
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 revenue when, or as, we satisfy a performance obligation.
Concentration of Credit Risk and Significant Customers
Financial instruments which potentially subject the Company to a concentration of credit risk consist principally of temporary cash investments and accounts receivable. The Company places its temporary cash investments with financial institutions insured by the FDIC.
Concentrations of credit risk with respect to trade receivables are limited due to the diverse group of customers to whom the Company sells. The Company establishes an allowance for doubtful accounts when events and circumstances regarding the collectability of its receivables warrant based upon factors such as the credit risk of specific customers, historical trends, other information and past bad debt history. The outstanding balances are stated net of an allowance for doubtful accounts.
For the years ended April 30, 2021 and April 30, 2020, the Company has no customers who impact the Company’s revenues or receivables more than 5%.
Stock-Based Compensation
The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718, Compensation - Stock Compensation. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 505-50, Equity Based Payments to Non-Employees, with respect to options and warrants issued to non-employees.
Deferred Revenue
Payments received by the Company in advance are recorded as deferred revenue until the merchandise has shipped to the customer.
Cost of Goods Sold
The Company recognizes the direct cost of purchasing product for sale, including freight-in and packaging, as cost of goods sold in the accompanying statement of operations.
Cost of Revenue
Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by OEMs, to drive traffic to our websites and products, and to acquire online advertising space; costs incurred to support and maintain Internet-based products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products.
Cash and Cash Equivalents
The Company includes in cash and cash equivalents all short-term, highly liquid investments that mature within three months of the date of purchase. Cash equivalents consist principally of investments in interest-bearing demand deposit accounts and liquidity funds with financial institutions and are stated at cost, which approximates fair value. For cash management purposes, the company concentrates its cash holdings in multiple FDIC insured state and federal banking institutions. The Company had no cash equivalents at April 30, 2021 or 2020.
Inventory
In accordance with ASU 2015-11 - Inventory (Topic 330) - Simplifying the Measurement of Inventory , the Company’s inventory consists of finished product, BOTS products valued at the lower of cost or market valuation under the first-in, first-out method of costing.
As of April 30, 2021, the Company had no allowance for obsolescence.
Property, Plant, and Equipment
Property, plant and equipment (“PPE”) are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized.
Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five years.
The Company classifies its software under the Financial Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 10, Accounting for Internal Use Software, and the Governmental Accounting Standards Board (GASB) Statement No. 42, Accounting of Costs of Computer Software Developed or Obtained for Internal Use. When software is used in providing goods and services it is classified as PPE. The Company considers its 420 Cloud software as a major part of the Company’s operations that is intended to provide profits.
Accounts Receivable
The Company’s accounts receivables are primarily through its construction and media and technologies segments. As the retail division is either paid through credit card processing and prepaid wholesale purchases, the Company projects insignificant amounts of outstanding accounts receivable for its retail division. The Company recognizes receipt of payment at the time the funds are deposited with the merchant services account of the Company. When the merchant services vendor determines to maintain a reserve for potential refunds and chargebacks, the Company reviews the reserve, to i) determine if the reserve is probably uncollectible, and ii) if a loss is probable, a reasonable estimate of the amount of the loss. We then allocate a portion or all of the reserve for bad debt, in accordance with FASB ASC 450-20-25-2. Once the vendor releases the funds, the bad debt reserve is appropriately reversed.
Advertising Costs and Expense
The advertising costs are expensed as incurred. During the years ended April 30, 2021 and 2020, the advertising costs were $56,543 and $30,197, respectively.
Foreign Currency Translation
The Company’s functional currency and its reporting currency is the United States Dollar.
Intangible Assets
The Company’s intangible assets consist of certain website development costs that is amortized over their useful life in accordance with the guidelines of ASC 350-30 General Intangible Other than Goodwill and ASC 350-50 Website Development Costs. In addition to these finite intangible assets, the Company accounts for its infinite intangible assets without depreciation and/or amortization. These assets are reviewed annually by an independent review to determine if an impairment should be recognized. The Company determined impairments were warranted for the Company’s intangible assets (see Note 9 for further information).
Financial Instruments
The carrying amounts reflected in the balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.
As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The three levels of the fair value hierarchy are described below:
Level 1-Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2-Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3-Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.
The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.
Income Taxes
Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Net Loss Per Share
The Company follows ASC Topic 260 - Earnings Per Share, and FASB 2015-06, Earnings Per Share to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
Basic net earnings (loss) per common share are computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Dilutive common stock equivalent shares consist of Series A convertible preferred stock, convertible debentures, stock options and warrant common stock equivalent shares.
Concentration of Credit Risk
Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade receivables. Concentrations of credit risk with respect to trade receivables are limited due to the clients that comprise our customer base and their dispersion across different business and geographic areas. We estimate and maintain an allowance for potentially uncollectible accounts and such estimates have historically been within management's expectations.
We rely almost exclusively on one Chinese factory as our principle supplier for our e-cig products. Therefore, our ability to maintain operations is dependent on this third-party manufacturer.
Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company may occasionally maintain amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had $0 in excess of federally insured limits at April 30, 2021 and 2020.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, “Accounting for the Impairment of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset.
In accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, ASU 2011-08, Intangible-Goodwill and Other (Topic 350)” Testing Goodwill for Impairment, and ASU 2012-02 Intangibles-Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment our intangible assets are evaluated for potential impairment annually, generally during the fourth quarter, by comparing the fair value of a reporting unit to its carrying value. If the carrying value exceeds the fair value, impairment is measured by comparing the derived fair value of to its carrying value, and any impairment determined would be recorded in the current period. The Company recognized no impairment on its intangible assets for the periods ending April 30, 2021 and April 30, 2020.
Warranties
Warranty reserves include management’s best estimate of the projected costs to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the Company’s evaluation of historical data. Management reviews BOTS’s reserves at least quarterly to ensure that its accruals are adequate in meeting expected future warranty obligations, and the Company will adjust its estimates as needed. Initial warranty data can be limited early in the launch of a product and accordingly, the adjustments that are recorded may be material. As a result, the products that can be returned as a warranty replacement are extremely limited. As a result, due to the Company’s warranty policy, the Company did not have any significant warranty expenses to report for the year ended April 30, 2021. Based on these actual expenses, the warranty reserve, as estimated by management as of April 30, 2021 and April 30, 2020 were at $0. Any adjustments to warranty reserves are to be recorded in cost of sales.
It is likely that as we start selling higher priced products, that are not affected by federal shipping laws and/or are not single use items, we will acquire additional information on the projected costs to service work under warranty and may need to make additional adjustments. Further, a small change in the Company’s warranty estimates may result in a material charge to the Company’s reported financial results.
Commitments and Contingencies
The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 - Commitments and ASC 450 - Contingencies. We recognize a loss on a contingency when it is probable a loss will incur and that the amount of the loss can be reasonably estimated. As of April 30, 2021, and April 30, 2019, the Company recognized a loss on contingencies of zero and $0, respectively.
Stock Options
In September 2016, we adopted a stock option plan. We account for stock options in accordance with ASC 718 - Compensation - Stock Compensation for employees. The company incorporates ASC Subtopic 505-50, Equity - Equity Based Payments to Non-Employees for issuance of stock options to non- employees.
Recent Accounting Pronouncements
The Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations, or cash flows of the Company.
On December 15, 2016, the following two ASU’s became effective, ASU 2015-11, Simplifying the Measurement of Inventory issued July 2015 and ASU 2014-09, Revenue From Contracts With Customers, issued May 2014, and must be utilized in fiscal years beginning after the effective date. The company has adopted and implemented the standards as part of its 2017 fiscal year. The early implementation had no effect on the financial performance of the Company. The Company reports its inventory by segments.
In March 2016, the FASB issued ASU No. 2015-03, Implementing the Effective Dates of Intangible - Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810) and Derivatives and Hedging (Topic 815) immediately. The Company has reviewed the topics and in compliance. The effects of the immediate implementation of these topics have had no effect on the financial statements of the Company.
In March 2016, the FASB issued ASU No. 2015-09, Compensation-Stock Compensation (Topic 718), “Improvements to Employee Share-Based Payment Accounting.” This ASU makes targeted amendments to the accounting for employee share-based payments. This guidance is to be applied using various transition methods such as full retrospective, modified retrospective, and prospective based on the criteria for the specific amendments as outlined in the guidance. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, as long as all of the amendments are adopted in the same period. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company’s financial statements and disclosures.
On August 26, 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). These amendments provide cash flow statement classification guidance for: (1) Debt Prepayment or Debt Extinguishment Costs, (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing, (3) Contingent Consideration Payments Made after a Business Combination, (4) Proceeds from the Settlement of Insurance Claims, (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies, (6) Distributions Received from Equity Method Investees, (7) Beneficial Interests in Securitization Transactions, and (8) Separately Identifiable Cash Flows and Application of the Predominance Principle. The Company adopted the amendment as of January 1, 2019. Adoption of the guidance did not have a material impact on the Company's consolidated statements of cash flows.
On August 28, 2017, the FASB issued Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). ASU 2017-12 expands component and fair value hedging, specifies the presentation of the effects of hedging instruments, eliminates the separate measurement and presentation of hedge ineffectiveness, and updates disclosure requirements related to hedging. The Company adopted the amendment as of January 1, 2020. Adoption of the guidance did not have a material impact on the Company's consolidated financial statements, as the Company had not yet undertaken any hedging activities at the date of adoption.
On August 27, 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The guidance eliminates, adds, and modifies certain disclosure requirements for fair value measurements. The Company adopted the amendment as of January 1, 2019. Adoption of the guidance did not have a material impact on the Company's consolidated financial statements and disclosures.
On November 11, 2019, the FASB issued Accounting Standards Update No. 2019-08, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements-Share-Based Consideration Payable to a Customer (“ASU 2019-08”), that simplifies and increases comparability of accounting for nonemployee share-based payments, specifically those made to customers. The new guidance requires companies to measure and classify (on the balance sheet) share-based payments to customers by applying the guidance in Topic 718. As a result, the amount recorded as a reduction in revenue would be measured based on the grant-date fair value of the share-based payment. The Company elected to early adopt the amendment as of January 1, 2019. Adoption of the guidance did not have a material impact on the Company's consolidated financial statements and disclosures.
We have implemented all other new accounting pronouncements that are in effect and that may impact our financial statements and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations.
Note 3. Going Concern
The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is new and has a limited history, no certainty of continuation can be stated. The accompanying financial statements for the years ended April 30, 2021 and 2020 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has negative cash flow and there are no assurances the Company will generate a profit or obtain positive cash flow. The Company has a nominal working capital deficit, which raise substantial doubt about its ability to continue as a going concern.
Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty.
Note 4. Acquisitions
On May 15, 2020, the Company acquired First Bitcoin Capital, LLC and all the assets of First Bitcoin Capital Corp. The Company acquired all cash, inventory, prepaid expenses, inventory, fixed assets, and intellectual property for a total purchase price of $10,120,000. The Company issued 100,000,000 common shares and 30,000,000 Series A Preferred shares at the rate of $0.0253 per underlying common share. The Company has 60,000,000 Series A Preferred held in reserve for issuance should certain milestones be achieved over the course of three years. In accordance to rule, the following table reflects the determination of the purchase price of the assets of First Bitcoin Capital Corp and the business entity of First Bitcoin Capital, LLC:
Schedule of Digital Currencies - Non-current
Cost per
Currency
Total Cost
First Bitcoin (BIT)
17,120,497,315
$ 0.00
$ 69,114,447
President Trump (PRES)
55,869,517,129
-
145,372,484
KiloCoin (KLC)
998,560,007
-
-
TeslaCoilCoin (TESLA) *
3,988,609
-
Siacoin (SC)
342,348
-
-
Alphabit (ABC)
199,999,982
-
-
Perkscoin
2,083,333
-
-
OTC Coin
19,996,895,800
-
-
President Johnson (GARY)
54,987,192,536
-
-
Hillary (HILL)
55,967,772,167
-
-
BURN
55,968,072,167
-
-
Bitcoin Futures (XBU)
8,977,777
-
-
Altcoin (ALT)
10,888
-
-
BPU
8,999,000
-
-
BPL
8,999,000
-
-
BCN
8,999,000
-
-
BXT
8,999,000
-
-
XBC
8,999,000
-
-
XOM
4,090,505
-
-
WEED
77,141,332
-
-
Fly (LOYAL)
2,254,750,118
-
-
Catalan Coin
92,233,720,368
-
-
OPRAH
1,266,805,361
-
-
HERB
888,888,888
-
-
MoshiachCoin
379,164
-
-
HEMP
100,000,000
-
-
MaidSafeCoin (MAID)
-
-
AFG
100,000,000,000
-
-
AAL
91,818,181,818
-
-
UAL
91,818,181,818
-
-
FFT
91,818,181,818
-
-
HAL
91,818,181,818
-
-
SWA
91,818,181,818
-
-
PURPOSE
92,000,000,000
-
-
UAE
1,000,000,000
-
-
QTR
1,000,000,000
-
-
SIA
1,000,000,000
-
-
CPA
1,000,000,000
-
-
ANA
1,000,000,000
-
-
KZR
1,000,000,000
-
-
HVN
1,000,000,000
-
-
LAN
1,000,000,000
-
-
OMA
1,000,000,000
-
-
JST
1,000,000,000
-
-
POE
1,000,000,000
-
-
XAX
1,000,000,000
-
-
EIN
1,000,000,000
-
-
WJA
1,000,000,000
-
-
IGO
1,000,000,000
--
--
IBE
1,000,000,000
--
--
JBU
92,818,181,818
--
--
JSA
1,000,000,000
--
--
AZU
1,000,000,000
--
--
AVA
1,000,000,000
--
--
TAM
1,000,000,000
--
--
AZA
1,000,000,000
--
--
DAT
1,000,000,000
--
--
ASA
1,000,000,000
--
--
SCO
1,000,000,000
--
--
SAS
1,000,000,000
--
--
SEY
1,000,000,000
--
--
TAP
1,000,000,000
--
--
TOM
1,000,000,000
--
--
ALK
1,000,000,000
--
--
CMP
1,000,000,000
--
--
AHY
1,000,000,000
--
--
JAI
1,000,000,000
--
--
MAU
1,000,000,000
--
--
BER
1,000,000,000
--
--
EWG
1,000,000,000
--
--
EYH
1,000,000,000
--
--
APJ
1,000,000,000
--
--
ETD
1,000,000,000
--
--
THY
1,000,000,000
--
--
EVA
1,000,000,000
--
--
QFA
1,000,000,000
--
--
DLH
1,000,000,000
--
--
GIA
1,000,000,000
--
--
CHH
92,818,181,818
--
--
THA
1,000,000,000
--
--
AFR
1,000,000,000
--
--
SWR
1,000,000,000
--
--
AAR
1,000,000,000
--
--
ANZ
1,000,000,000
--
--
VOZ
1,000,000,000
--
--
AUA
1,000,000,000
--
--
BKP
1,000,000,000
--
--
JAL
1,000,000,000
--
--
JAA
1,000,000,000
-
-
JAT
1,000,000,000
-
-
HAD
1,000,000,000
-
-
AXM
1,000,000,000
-
-
KLM
1,000,000,000
-
-
VRD
1,000,000,000
-
-
BAW
92,818,181,818
-
-
FIN
1,000,000,000
-
-
VIR
1,000,000,000
-
-
CRK
1,000,000,000
-
-
NAX
1,000,000,000
-
-
ACA
1,000,000,000
-
-
CSN
1,000,000,000
-
-
AEE
1,000,000,000
-
-
MAS
1,000,000,000
-
-
DAL
92,818,181,818
-
-
KAL
1,000,000,000
-
-
CAL
1,000,000,000
-
-
EZY
1,000,000,000
-
-
SLK
1,000,000,000
-
-
AFL
1,000,000,000
-
-
SAA
1,000,000,000
-
-
CES
1,000,000,000
-
-
GFA
1,000,000,000
-
-
ICE
1,000,000,000
-
-
SVA
1,000,000,000
-
-
PAL
1,000,000,000
-
-
EGF
1,000,000,000
-
-
KQA
1,000,000,000
-
-
DTA
1,000,000,000
-
-
CCA
1,000,000,000
-
-
TSC
1,000,000,000
-
-
ANE
1,000,000,000
-
-
DKH
1,000,000,000
-
-
FJI
1,000,000,000
-
-
LOTP
1,000,000,000
-
-
CAW
1,000,000,000
-
-
AMX
1,000,000,000
-
-
RBA
1,000,000,000
-
-
GCRC
1,000,000,000
-
-
TGW
1,000,000,000
-
-
MNO
1,000,000,000
-
-
RJA
1,000,000,000
-
-
SEJ
1,000,000,000
-
-
WOWN
1,000,000,000
-
-
SW
1,000,000,000
-
-
FS
1,000,000,000
-
-
RT
1,000,000,000
-
-
BW
1,000,000,000
-
-
JJ
1,000,000,000
-
-
MC
1,000,000,000
-
-
HH
1,000,000,000
-
-
IC
1,000,000,000
-
-
CH
92,818,181,818
-
-
WY
1,000,000,000
-
-
Total
$ 214,487,552
Reserve
210,209,892
Carrying Value
$ 4,277,660
Note 5. Inventory and Work in Progress
The early implementation of ASU 2015-11, Simplifying the Measurement of Inventory had no effect on the financial performance of the Company. The Company reports its inventory by segments. The inventory levels for the segments for previous years are based upon best estimates of management and are provided for quality review measures only. The inventory and work in progress was eliminated as part of the discontinued operations.
Note 6: Accounts Receivable
As of April 30, 2021, the Company had $0 in accounts receivable
Accounts Receivable
For the year ending April 30,
A/R from credit card reserve
$ -
$ -
A/R from direct customers -
-
Subscription receivables
-
$ -
Allowance for bad debt
-
-
Allowance for discontinued operations
-
-
Total Accounts Receivable
$ -
$ -
Note 7. Property, Plant and Equipment
The following is a detail of equipment at April 30, 2021 and April 30, 2020:
Property, Plant, and Equipment
As of
April 30,
As of
April 30,
Office furniture
$ -
$ 4,889
Rollies machine
-
-
Computer equipment
-
29,318
420 Cloud
-
-
Farm equipment
-
-
Warehouse equipment
-
90,000
Plant Development
-
-
Land
-
-
Total acquisition cost
$ -
$ 124,207
Accumulated depreciation
-
69,078
Write-down
-
-
Sele of assets
-
-
Discontinued operations
-
-
Total property, plant, and equipment
$ -
$ 55,129
Note 8. Cost Basis Investments
The Company has invested $1,300,065 through April 30, 2021 through various nonmonetary transactions. The Company has elected to impair a portion of its investments (see Note 9). A breakdown of these investments includes:
Cost Basis Investment
As of
April 30,
As of
April 30,
Stony Hill Corp
$ -
$ 700,000
Omni Health, Inc
-
152,023
New York Hemp Pilot Program
-
50,000
Fist Bitcoin Capital
969,071
-
Investment in BRRX management
-
200,778
Agri-Contractors, LLC
-
160,008
Redfern BioSystems, Inc.
-
9,949
Total acquisition cost
$ -
$ 1,272,758
Impairment
-
(999,813 )
$ -
$ 272,945
Note 9. Intangible Assets:
The intangible assets consist of:
Intangible Assets
As of
April 30,
As of
April 30,
Domains
$ 115,848
$ 365,847
Trademarks & Patents
717,000
455,860
Website
-
30,491
Cannabis License
228,085
Noncurrent Digital Assets
223,479
-
VitaCBD
-
200,000
Total acquisition cost
$ 1,056,327
$ 1,280,283
Less: Amortization
(476,107 )
(752,193 )
Adjustment for sale of asset
-
(72,880 )
Write-off
-
(55,173 )
Current Intangible Assets
$ 580,220
$ 400,037
Amortization expense on intangible assets was $265,749 and $263,197 for the years ended April 30, 2021 and 2020, respectively. The weighted average remaining useful life on intangible assets at April 30, 2021 is approximately 24 months.
The table below represents the estimated amortization of intangible assets for each of the next five years.
Year
Amortization
$ 171,952
Total
$ 171,952
Note 10. Impairment Analysis
As of April 30, 2021 there were no impairments calculated as no investments have been made.
Note 11: Liabilities
Notes Payable
The Company owe Paul Rosenberg (see Related Party) $90,064as due to related party. There are no current agreements in place for these payments made by Paul Rosenberg on behalf of the Company. The Company treats these as notes payable to a related party.
Note 12: Consolidated Statements of Operations Notes
Professional Fees
The Company’s professional fees consists of legal fees, accounting fees, securities fees, and other licensed professional fees. The legal fees include general corporate counsel fees, legal expenses associated with various lawsuits, and the preparation of SEC filings. Following is a breakdown of the professional fees for the periods ending April 30, 2021 and April 30, 2020:
Professional Fees
For the year ending April 30,
Legal fees associated with litigation
$ -
$ -
Corporate legal fees
38,327
Accounting fees
28,680
19,500
Securities fees
-
5,375
Other licensed professional fees
-
-
Adjustment for discontinued ops
-
(21,929 )
Total Professional fees
$ 29,580
$ 41,273
Selling, General, and Administration
The Company’s selling, general, and administration expenses were $401,739 and $536,735 for the periods ending April 30, 2021 and April 30, 2020, respectively. The following chart is a breakdown of those expenses:
Selling, General, and Administration
For the year ending April 30,
Auto Expenses
$ 5,658
$ 9,403
Bank service charges
4,541
Business License
-
3,963
Dues & Subscriptions
2,263
Payroll
-
291,198
Travel
-
12,493
Office Supplies
2,067
37,766
Computer and Internet Expenses
5,965
11,018
Shipping and Postage
Rent
-
28,735
Regulatory Filing Fees
6,270
-
Software Expenses
3,496
Utilities
-
2,615
Adjustment for discontinued ops
-
(390,375 )
$ 26,414
$ 11,457
Bad Debts
The Company has recorded bad debt in the amounts of $0 and $0 for the periods ending April 30, 2021 and April 30, 2020, respectively.
Note 13: Discontinued Operations
In 2020 the Company elected to discontinue its operations in retail locations. The retail discontinued operation loss for the year ending April 30, 2020 was $3,165,717.
In 2021 the loss from discontinued operations was $221,840 related to investments into BRRX Management joint venture and eliminated the value of its California City cannabis license
In addition, we adjusted our assets and liabilities accordingly.
Note 14. Related Parties and Related Party Transactions
Related Parties
During the fical year ending 04-30-2021 There were no related party transactions. Subsequently, On July 6, 2021, the Company entered into a settlement agreement with Everything Blockchain , Inc. Under the settlement agreement, BOTS agreed to return 250,000 shares of Series B Preferred stock to the treasury of the OBITX, in exchange for the assignment of the $1.4 million promissory note owed by First Bitcoin Capital Corp to the Everything Blockchain Inc, along with all interest owed to date on the promissory note. In addition, Everything Blockchain transferred 20,726,120 BIT tokens to BOTS. This was a related party transaction and was conducted at arm’s length.
Related Party Transactions
The Company entered a Line of Credit with Paul Rosenberg for up to $100,000 in funding on May 1, 2016. On May 1, 2017, the Company increased the amount of the Line of Credit and Convertible Promissory Note for up to $250,000 in funding by Paul Rosenberg to accurately record the day-to-day transactions of the Company and Paul Rosenberg. In February 2019 we increased the line of credit to $1,000,000. As of April 30, 2019, the Company owed Mr. Rosenberg $1,219,412, which included the amount of $120,000 earned, covered under his employment agreement which was not paid to Mr. Rosenberg. On August 1, 2019 the Company settled the account reducing the amount owed to Paul Rosenberg in the amount of $1,221,871. As payment of this amount was the transfer of the real estate property owned by CAAcres, Inc., in the amount of $314,105 and the transfer of ATM’s owned in the amount of $408,166, with the remainder of the amount due recognized as gain on sale of assets. Since the settlement, Paul Rosenberg has expended an additional $110,923 to third party vendors on behalf of MCIG. The Company has no agreement with Paul Rosenberg for these payments. The Company records the advances as payable to related party.
On September 1, 2016, the Company entered into an employment agreement with Michael Hawkins, the Chief Financial Officer and an employment agreement with Paul Rosenberg, the Chief Executive Officer of the Company (“employees”). Mr. Hawkins was the Interim Chief Financial Officer which agreement was scheduled to expire on September 6, 2016. Mr. Rosenberg has been the CEO since inception and served without an agreement. The terms of the Agreement are the same. The agreements call for $156,000 per year base salary with a three-year term. Only $3,000 per month guaranteed to be paid in cash, while the remainder ($10,000 per month) is booked as a note due, which may be converted into shares of the company at then current price per share. The initial year’s conversion option was accrued upon entering into the agreement. The employees earn annual bonuses based upon gross sales, net profits, and annual increases in sales and profits. The Company and employees may elect to convert a portion of this salary into equity of the company. In addition, each employee was issued a seven-year warrant to acquire four percent (4%) of the Company Stock at the market price as of September 1, 2016 with 25% vested immediately and 25% on each subsequent year anniversary of employment. On September 1, 2017 Mr. Hawkins agreement was modified to $10,000 per month and his options vested. The employment agreements expired on August 30, 2019. Mr. Hawkins elected not to extend the agreement and resigned as the Chief Financial Officer. Paul Rosenberg stopped receiving payments under his agreement effective October 31, 2019 and currently receives no compensation as CEO/CFO of the Company.
On August 2, 2018 Paul Rosenberg converted 8,000,000 Series A Preferred stock into 80,000,000 common shares of stock.
On August 15, 2018 Paul Rosenberg and Michael Hawkins became the majority owners of Tuero Capital, Inc., which subsequently changed its name to Redfern BioSystems, Inc. The Company converted its outstanding of $9,949 debt into equity and currently owns 1,902,375. Subsequently the company sold www.cbd.biz to Redfern BioSystems (see Note 15: Sale of Asset).
On August 1, 2018 the company’s Chief Financial Officer, Michael Hawkins, exercised a Warrant purchasing 5,416,551 shares of common stock at the price of $0.025, totaling $135,414. The purchase price was offset by the $135,414 owed to Mr. Hawkins under his employment agreement. The shares were issued to Epic Industry Corp, a private company owned 100% by Michael Hawkins.
On May 2, 2019 Paul Rosenberg converted 500,000 shares of Series A Preferred Stock into 5,000,000 common shares of stock.
On October 13, 2019 Paul Rosenberg retired 30,000,000 shares of common stock.
On October 13, 2019 the Company settled the account payable owed Paul Rosenberg and Michael Hawkins. In exchange for the elimination of $295,725 owed to Paul Rosenberg and $129,140 owed to Michael Hawkins, the Company provided $27,930 of assets owned by VitaCig, and assigned the $100,000 owed by Redfern to the Company to Paul Rosenberg and Michael Hawkins. The remaining balance of $296,935 was recorded as a gain on the sale of assets.
The Company entered a Line of Credit with OBITX, to provide up to $500,000 in funding on November 1, 2016. It was given at a 0% interest rate and is payable upon termination date with the option to convert the agreement into equity at a 15% discount to the then current market rate. The Line of Credit was increased to $1,000,000 on January 1, 2018 and expired January 1, 2020. As of April 30, 2021, and April 30, 2019, the amount outstanding on the Line of Credit owed to MCIG was $218,257 and $618,277, respectively.
Note 15. Commitments and Contingencies
Rent expense for the year ended April 30, 2021 and 2020 was $0 and $28,735, respectively. The company currently rents office space through its registered agent in Puerto Rico on a month-by-month basis.
Note 16. Stockholders’ Equity
Common Stock
The Company was authorized to issue 2,000,000,000 common shares at a par value of $0.0001. As of April 30, 2021, the Company had issued and outstanding, 775,874,596 common shares. During 2021 we issued 270,5000,00 shares of common stock.
Preferred Stock
The Company has authorized 90,000,000 shares of preferred stock, of which it has designated 90,000,000 as Series A Preferred, at $0.0001 par value. The Company has 33,350,000 issued and outstanding as of April 30, 2021. Each share of the Preferred Stock has 10 votes on all matters presented to be voted by the holders of the Company’s common stock.
Note 17. Income Taxes
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows:
Statutory federal income tax rate
34.0 %
34.0 %
State income taxes, net of federal taxes
6.0 %
6.0 %
Non-deductible items
(1.0 )%
(1.0 )%
Valuation allowance
(39.0 )%
(39.0 )%
Effective income tax rate
0.0 %
0.0 %
The Company may not be able to utilize the net operating loss carry forwards for its U.S. income taxes in future periods should it experience a change in ownership as defined in Section 382 of the Internal Revenue Code (“IRC”). Under section 382, should the Company experience a more than 50% change in its ownership over a 3-year period, the Company would be limited based on a formula as defined in the IRC to the amount per year it could utilize in that year of the net operating loss carry forwards. Section 382 of the Internal Revenue Code (“IRC”) imposes limitations on the use of NOL’s and credits following changes in ownership as defined in the IRC. The limitation could reduce the amount of benefits that would be available to offset future taxable income each year, starting with the year of an ownership change. The Company has not completed the complex analysis required by the IRC to determine if an ownership change has occurred.
Income Tax Computation
Tax Asset
Tax Asset
NOL
10,814,168
6,881,107
The Company has not performed a change in ownership analysis since its inception in 2010 and, accordingly, some or all of its net operating loss carry forwards may not be available to offset future taxable income. Even if the loss carry forwards are available, they may be subject to substantial annual limitations resulting from past ownership changes, and ownership changes occurring after April 30, 2021, that could result in the expiration of the loss carry forwards before they are utilized.
The nature of the components of the deferred tax asset is entirely attributable to the Net operating loss carry-forwards incurred by the Company less any permanent differences that maybe used in future years to offset future tax liabilities. We believe that it is more likely than not that the benefit from certain NOL carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance to offset the deferred tax assets relating to these NOL carryforwards.
The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors. At April 30, 2021 and 2020, deferred tax assets have been fully offset by a valuation allowance.
The Company files income tax returns in the U.S. federal jurisdiction, and with the State of California, Florida, New York, and Nevada. The Company is subject to
U.S. federal and state income tax examinations by tax authorities for tax years 2014 through 2019 due to net operating losses that are being carried forward for tax purposes. The Company does not have any uncertain tax positions or unrecognized tax benefits at April 30, 2021 or 2020. The Company’s policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively.
Note 18. Basic Loss per Share before Non-Controlling Interest
Basic Loss Per Share - The computation of basic and diluted loss per common share is based on the weighted average number of shares outstanding during each period.
Basic Income (Loss) Per Common Share
For the period ended April 30,
Net income from continuing operation (loss) before non-controlling interest
(4,205,939 )
Net income (loss) before non-controlling interest
(8,026,463 )
(3,883,988 )
Net income (loss) from non-controlling interest
-
-
Net income (loss)
(8,026,463 )
(3,883,988 )
Basic income (loss) per common share from continuing operation
(0.0054 )
(0.0014 )
Basic income (loss) per common share from non-controlling interest
0.0000
0.0000
Basic income (loss) per share
(0.0103 )
(0.0076 )
Basic weighted average number of shares outstanding
775,874,596
505,071,171
The computation of basic loss per common share is based on the weighted average number of shares outstanding during the year.
Note 19. Stock Option Plan
Under its Year 2016 Stock Option Plan (the “Plan”), the Company grants stock options for a fixed number of shares to employees and directors with an exercise price equal to the fair market value of the shares at the date of grant.
Options granted under the Plan are exercisable at the exercise price of grant and, subject to termination of employment, expire three years from the date of issue, are not transferable other than on death, and vest in monthly installments commencing at various times from the date of grant. As of April 30, 2021, the Company recorded compensation cost of $0 within operating expenses related to stock options granted in 2020.
The Company issued no options during fiscal year 2020. The weighted average fair value at date of grant for options granted during fiscal 2019 is $0.1362 per option. The fair value of each option at date of grant utilized the closing price of the stock on the date of issue.
A summary of the Company’s stock option plan as of April 30, 2021 is presented below:
Stock Option Summary
Shares
Weighted
Average
Exercise
Price
Options outstanding at May 1, 2020
11,550,000
$ 0.0485
Granted in FY 2020
-
-
Forfeited in FY 2020
-
-
Exercised in FY 2020
-
-
Options outstanding at April 30, 2020
11,550,000
-
Granted in FY 2020
-
-
Forfeited in FY 2020
-
-
Exercised in FY 2020
-
-
Options outstanding at April 30, 2021
11,550,000
$ 0.0485
There are currently 14,400,000 unissued options under the 2016 Stock Option Plan.
The following table summarizes information for stock options outstanding at April 30, 2021:
Options Outstanding Options Exercisable
Options Outstanding
Options Exercisable
Weighted-
Weighted-
Weighted-
Range of
Number
Average
Average
Number
Average
Exercise
Outstanding
Remaining
Exercise
Exercisable
Exercise
Prices
@ 4/30/20
in years
Price
@ 4/30/19
Price
$
0.034 - $0.244
11,550,000
-
$ 0.0937
11,550,000
$ 0.0937
Note 20. Warrants
A total of 43,332,412 warrants were issued on September 1, 2016 to various individuals/entities. These warrants were issued as a condition of employment agreements with the CEO and CFO. A total of 10,833,103 shares vests immediately with 10,833,103 vesting on the anniversary date for three years. The conversion price of the warrants is at $0.025.
On January 31, 2017, the company granted Mr. Rosenberg and Mr. Hawkins a five-year warrant to purchase 250,000 shares each of common stock at $0.75 per share.
On September 1, 2017 the remaining warrants issued to Michael W. Hawkins were vested in exchange for his reduction in salary.
A summary of warrant activity for period ended April 30, 2021 is as follows:
Stock Warrant Summary
Shares
Weighted
Average
Exercise
Price
Warrants outstanding at May 1, 2018
26,582,579
$ 0.025
Granted in FY 2019
-
-
Exercised in FY 2019
5,416,551
0.025
Warrants outstanding at April 30, 2019
21,166,208
0.206
Granted in FY 2020
-
-
Exercised in FY 20120
-
-
Options outstanding at April 30, 2021
21,166,208
$ 0.206
Note 21. Subsequent Events
None.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
On October 9, 2019, and effective the same date, on the recommendation of the Registrant’s Board of Directors, the Registrant engaged Weinstein International CPA, as its independent registered audit firm to audit the Registrant’s financial statements for the fiscal year ended April 30, 2019 and to perform procedures related to the financial statements included in the Registrant’s quarterly reports on Form 10-Q, beginning with the quarter ending July 31, 2019. The Company elected to utilize Weinstein International CPA as its independent registered audit firm to audit the Registrant’s financial statements for the fiscal year ended April 30, 2021.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.
We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2021. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.
As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.
SCOPE OF MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
N/A
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
·
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorizations of our management and board of directors; and
·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Our Chief Executive Officer and Chief Financial Officer have performed an evaluation of our internal control over financial reporting under the framework in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective at April 30, 2021.
Based on the results of its assessment, our management concluded that our internal control over financial reporting was not effective as of April 30, 2021 based on such criteria. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were:
Risk Assessment
We did not have an effective risk assessment process. From a governance perspective, we historically did not have a formal process to identify, update and assess risks, including changes in our business practices that could significantly impact our consolidated financial statements as well as the system of internal control over financial reporting.
Control Environment
We did not maintain an effective control environment as evidenced by:
·
Lack of majority independent board members.
·
An insufficient number of personnel to adequately exercise appropriate oversight of accounting judgements and estimates.
Control Activities
We did not have control activities that were designed and operating effectively to identify and address all likely sources of material misstatements, including non- standard transactions. In addition, management review controls were not sufficient or in place to identify all potential accounting errors.
Information and Communications
We did not implement appropriate information technology controls related to access rights for certain financial spreadsheets that are relevant to the preparation of the consolidated financial statements and our system of internal control over financial reporting. In addition, we did not implement the appropriate information technology disaster recovery controls in place to ensure the completeness of financial information surrounding the Company’s revenues and inventory.
Monitoring
We did not maintain effective monitoring of controls related to the financial close and reporting process. In addition, we did not maintain the appropriate level of review and remediation of internal control over financial reporting deficiencies throughout interim and annual financial periods.
We have not had sufficient time to fully remediate the aforementioned deficiencies and/or there was insufficient passage of time to evidence that the controls that were implemented during 2017 were effective. Therefore, the aforementioned control deficiencies continued to exist as of April 30, 2021. We believe the control deficiencies described herein, individually and when aggregated, represent material weaknesses in our internal control over financial reporting at April 30, 2021 since such deficiencies result in a reasonable possibility that a material misstatement in our annual or interim consolidated financial statements may not be prevented or detected on a timely basis by our internal controls. As a result of our assessment, we have therefore concluded that our internal control over financial reporting was not effective at April 30, 2021.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only the management's report in this annual report
MATERIAL WEAKNESS DISCUSSION AND REMEDIATION
We believe that the consolidated financial statements included in this Annual Report on Form 10-K for the year ended April 30, 2021 fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.
We were not able to fully implement and/or test the design and the operating effectiveness of our control procedures as of April 30, 2021. This required us to design new processes and controls concurrently, and thus did not allow us sufficient time to fully implement and/or test the design and operating effectiveness of the new controls.
We intend to continue to take appropriate and reasonable steps to make necessary improvements to our internal control over financial reporting, including:
·
Continuing to improve the control environment through (i) being staffed with sufficient number of personnel to address segregation of duties issues, ineffective controls and to perform control monitoring activities, (ii) increasing the level of GAAP knowledge through retaining of a technical accountant, (iii) implementing formal process to account for non-standard transactions, and (iv) implementing and formalizing management oversight of financial reporting at regular intervals;
·
Continuing to update the documentation of our internal control processes, including implementing formal risk assessment processes;
·
Implementing control activities that address relevant risks and assure that all transactions are subject to such control activities;
·
Ensure systems that impact financial information and disclosures have effective information technology controls;
·
Executing plan to increase number of independent directors to enhance corporate governance and Board composition;
·
Implementing plan to increase oversight and review of ad hoc spreadsheets while also working to reduce their use.
We believe that the remediation measures described above will strengthen our internal control over financial reporting and remediate the material weaknesses we have identified. We expect that our remediation efforts, including design, implementation and testing will continue throughout fiscal year 2021.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting during the year ended April 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
INHERENT LIMITATION ON THE EFFECTIVENESS OF INTERNAL CONTROLS
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION.
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
All of our directors hold office until the next annual meeting of stockholders and until their successors have been elected and qualified or until their earlier resignation or removal unless his or her office is earlier vacated in accordance with our bylaws or he or she becomes disqualified to act as a director. Our officers shall hold office until the meeting of the Board of Directors following the next annual meeting of stockholders and until his successor has been elected and qualified or until his earlier resignation or removal. The Board of Directors may remove any officer for cause or without cause.
Our executive officers and directors and their respective ages as of the date of this Annual Report are as follows:
Name
Director or
Officer
Since
Age
Positions
Oleksandr Gordieiev
CEO
Paul Rosenberg
Former President and Chief Executive Officer, Acting Chief Financial Officer and Chairman of the Board
Simon Rubin
Director
Yuri Abramov
Director
Oleksandr Gordieiev was appointed as the Company’s Chief Executive Officer on July 15, 2021. Mr. Gordieiev is an industry-leading technology professional with more than 18 years of technology and leadership experience, a Cisco Certified Academy Instructor as well as Founder and Organizer of many Technology Conferences. He holds a Doctor of Science in information technologies and the prestigious National Aerospace University degree.
Mr. Gordieiev served as the Director of Educational programs, Ukrainian Association of Fintech, and Innovation Companies (UAFIC). Also, he served as a Head of information systems and the cybersecurity department of the University of Banking, Kyiv, where he significantly transformed the Banking systems into a recognized European leader in cloud infrastructure, enterprise mobility and cybersecurity, increasing that company's annual revenues. Before joining Bots Inc, Gordieiev was Associate Professor of control of banking security, University of banking of the National bank of Ukraine, Kyiv, overseeing engineering and operations for financial information storage, data computing, cybersecurity, and banking enterprise solutions.
Paul Rosenberg was appointed as our Chief Executive Officer, Treasurer, Secretary, and Director of BOTS, Inc. on May 23, 2013. He resigned from his position on July 15, 2021. For the past 5 years Mr. Rosenberg has been a private investor focusing on the technology space where he has over two decades of experience as a software engineer specializing in complex distributed systems in C++, Delphi, VB, Java, and Oracle DB projects via his consulting company: PR Data Consulting. Since 1997, Mr. Rosenberg has worked as an independent consultant with both private and public enterprises including: The Federal Deposit Insurance Company (FDIC), The Zennstrom/Friis Group (Kazaa/Skype/Atomico Ventures), and Trust Digital (later sold to Mcafee in 2010), Dell, Inc., Boeing, and Microsoft Inc. as well as several other notable companies.
Simon Rubin was appointed to the Board of Directors on May 17, 2020 and currently serves as the chairman of the board for First Bitcoin Capital. Simon is a serial entrepreneur with a background in programming and web design. Simon also has years of experience in health care equipment management. Simon is an avid crypto currency enthusiast.
Yuri Abramov is an applied physicist, mathematician, and software developer. Master of Science in Theoretical Physics from the Institute of Chemical Physics, Russian Federation. For more than three decades, Yuri has applied his superior analytical skills and expertise to advance the field of applied physics in his work as a mathematician, algorithms and software developer, engineer and inventor. Yuri holds a Master of Science in Theoretical Physics and Chemical Physics from the Institute of Chemical Physics from the Russian Academy of Sciences in Moscow, Russia. Among his numerous unparalleled qualifications and credentials, Yuri is an expert problem solver in the areas of digital signal processing for video-compressions as well as for high speed wireless communications. Yuri is experienced in developing novel algorithms in MATLAB and C/C++ as well as SAW-filters hardware design, which are inherent attributes in many of today’s state-of-the-art electronic systems and are developed to improve Tx-Rx Communication Systems by communication sensitivity. In addition, Yuri developed a SAW-coprocessor for wireless modems operating in UWB (ultra-wide band) frequency range that are destined for super-high-speed data communication. His business background includes acting as a project’s leader for Soliton-SAW Ltd., for 14 years where he worked in consulting and implementation, algorithms and software development and modeling and designing. Yuri has at least multiple inventions that are registered as patents including “Signal Processing Method Utilizing the SAW Velocity Dispersion Effect for Weighting by Shaping the Electrode Fingers of a SAW Interdigital Transducer and Apparatus, signal processing utilizing SAW wave guides, image processing methods for digital quantization” and others. Yuri has contributed to nearly 40 scientific publications with various articles on analysis, methods and applications of SAW filters design, algorithms for video encoding and others. He currently works in the field of Ultra-Wide Band Communication applied to coax-cable defects localization. Yuri is the younger brother of Dr. Vyacheslav M. Abramov, who was appointed Chairman to the company’s advisory board.
FAMILY RELATIONSHIPS
There are no family relationships between or among the above directors, executive officers or persons nominated or charged by us to become directors or executive officers.
BOARD LEADERSHIP STRUCTURE
Mr. Simon Rubin currently serves as our chairman of our Board of Directors and Secretary
CONFLICTS OF INTEREST
Members of our management are associated with other firms involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our company. Although the officers and directors are engaged in other business activities, we anticipate they will devote an important amount of time to our affairs.
Our officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to ours. Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities. Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise. Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business operations.
Our officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis. A breach of this requirement will be a breach of the fiduciary duties of the officer or director. If we or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity. However, all directors may still individually take advantage of opportunities if we should decline to do so. Except as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.
INVOLVEMENT IN CERTAIN IN CERTAIN LEGAL PROCEEDINGS
Except as noted below, none of the following events have occurred during the past five years and are material to an evaluation of the ability or integrity of any director or officer of the Company:
1.
A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.
Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
a.
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
b.
Engaging in any type of business practice; or
c.
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4.
Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5.
Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6.
Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.
Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
a.
Any Federal or State securities or commodities law or regulation; or
b.
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
c.
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.
Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
COMMITTEES
Our Board of Directors as a whole act as the audit and compensation committees.
CODE OF ETHICS
We adopted a code of ethics that applies to our officers and directors. Our code of ethics was filed with our Annual Report for the year ended April 30, 2014, as filed on August 14, 2014.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the laws of Puerto Rico, we can indemnify our directors and officers against liabilities they may incur in such capacities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Our amended and restated articles of incorporation provide that, pursuant to Puerto Rico law, our directors shall not be liable for monetary damages for breach of the directors’ fiduciary duty of care to us and our stockholders. This provision in the articles of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Puerto Rico law. In addition, each director will continue to be subject to liability for breach of the director’s duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, for any transaction from which the director directly or indirectly derived an improper personal benefit, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Puerto Rico law. The provision also does not affect a director’s responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.
Our bylaws, as amended, provide for the indemnification of our directors and officers to the fullest extent permitted by the laws of Puerto Rico. We are not, however, required to indemnify any director or officer in connection with any (a) willful misconduct, (b) willful neglect, or (c) gross negligence toward or on behalf of us in the performance of his or her duties as a director or officer. We are required to advance, prior to the final disposition of any proceeding, promptly on request, all expenses incurred by any director or officer in connection with that proceeding on receipt of any undertaking by or on behalf of that director or officer to repay those amounts if it should be determined ultimately that he or she is not entitled to be indemnified under our bylaws or otherwise.
We have been advised that, in the opinion of the SEC, any indemnification for liabilities arising under the Securities Act of 1933 is against public policy, as expressed in the Securities Act, and is, therefore, unenforceable.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION.
The Company was formed on December 30, 2010.
The Company has no retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees, but our officers and directors may recommend adoption of one or more such programs in the future. In September 2016, the Company adopted a stock option plan. See Notes to Financial Statement in Item 8.
The Company does not have a standing compensation committee, audit committee, nomination committee, or committees performing similar functions. We anticipate that we will form such committees of the Board of Directors once we have a full Board of Directors.
The following table sets forth certain compensation information for: (i) the person who served as the Chief Executive Officer of BOTS, Inc., during the year ended April 30, 2021, regardless of the compensation level, and (ii) each of our other executive officers, serving as an executive officer at any time during 2021. The foregoing persons are collectively referred to in this prospectus as the “Named Executive Officers.” Compensation information is shown for the year ended April 30, 2021:
Non-
Non- Equity
Qualified
Incentive
Deferred
Stock
Option
Plan Comp
Comp
All Other
Name and Principal Position
Year
Salary ($)
Bonus ($)
Awards ($)
Awards ($)
($)
Earnings ($)
Comp ($)
Totals ($)
Oleksandr Gordieiev
CEO
Simon
40,000
20,000
60,000
Yuri
40,000
20,000
60,000
OUTSTANDING EQUITY AWARDS
None
OPTION EXERCISES AND STOCKS VESTED
During 2021 we did not have any option activity
GRANTS OF PLAN-BASED AWARDS
None
NON-QUALIFIED DEFERRED COMPENSATION
None.
GOLDEN PARACHUTE COMPENSATION
None.
DIRECTOR COMPENSATION
We currently do not compensate our directors. No director has received any compensation from the Company since the inception of the Company.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Under Rule 13d-3 under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.
The following table indicates beneficial ownership of BOTS’s common stock, as of April 30, 2021 by:
·
Each person or entity known by BOTS to beneficially own more than 5% of the outstanding shares of BOTS’s common stock;
·
Each executive officer and director of BOTS; and,
·
All executive officers and directors of BOTS as a group.
·
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Percentage of beneficial ownership is based on 505,374,596 shares of common stock outstanding as of April 30, 2021.
Unless other indicated, the address of each beneficial owner listed below is c/o BOTS, Inc., 4720 Salisbury Road, Jacksonville, Fl 32256.
REVIEW, APPROVAL AND RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS
All future related party transactions will be approved, if possible, by a majority of our directors who do not have an interest in the transaction and who will have access, at our expense, to our independent legal counsel.
DESCRIPTION OF CAPITAL STRUCTURE
General
Our authorized capital stock consists of 2,000,000,000 shares of common stock, par value $ 0.0001.
Common Stock
The shares of our common stock presently outstanding, and any shares of our common stock issues upon exercise of common stock purchase options and/or warrants, will be fully paid and non-assessable. Each holder of common stock is entitled to one vote for each share owned on all matters voted upon by shareholders, and a majority vote is required for all actions to be taken by shareholders. In the event we liquidate, dissolve or wind-up our operations, the holders of the common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all our debts and liabilities and the liquidation preference of any shares of preferred stock that may then be outstanding. The common stock has no pre-emptive rights, no cumulative voting rights, and no redemption, sinking fund, or conversion provisions. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, out of funds legally available for such purpose, subject to the dividend and liquidation rights of any preferred stock that may then be outstanding.
Preferred Stock
The Series A Preferred shares of BOTS, Inc. carry ten (10) votes per each share of Preferred stock while BOTS, Inc’s common shares carry one (1) vote per each share outstanding.
Voting Rights
Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders.
Dividends
Subject to preferences that may be applicable to any then-outstanding securities with greater rights, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past and does not presently contemplate that there will be any future payment of any dividends on Common Stock.
Indemnification of Officers and Directors
As permitted by Nevada Revised Statutes, our Articles of Incorporation provide that we will indemnify our directors and officers against expenses and liabilities they incur to defend, settle, or satisfy any civil or criminal action brought against them on account of their being or having been Company directors or officers unless, in any such action, they are adjudged to have acted with gross negligence or willful misconduct.
Pursuant to the foregoing provisions, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On August 1, 2019 the Company settled the the amount owed to Paul Rosenberg in the amount of $1,221,871. As payment of this amount was the transfer of the real estate property owned by CAAcres, Inc., in the amount of $314,105 and the transfer of ATM’s owned in the amount of $408,166, with the remainder of the amount due recognized as gain on sale of assets. Since the settlement, Paul Rosenberg has expended an additional $110,923 to third party vendors on behalf of MCIG. The Company has no agreement with Paul Rosenberg for these payments. The Company records the advances as payable to related party.
DIRECTOR INDEPENDENCE
Our Board of Directors is comprised of 2 members, who are not “independent” within the meaning of Marketplace Rule 5605 of the NASDAQ Stock Market.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
On October 9, 2019, we engaged, Weinstein International CPA to serve as our independent registered public accounting firm for the years ending April 30, 2020 and 2021
The following table shows the fees that were billed for the audit and other services provided for 2021 and 2020.
Audit Fees
$ 15,000
$ 31,225
Audit-Related Fees
-
-
Tax Fees
-
-
All Other Fees
-
-
Total
$ 15,000
$ 31,225
Audit Fees - This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
Audit-Related Fees - this category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under Audit Fees. The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting services.
Tax Fees - this category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees - this category consists of fees for other miscellaneous items.
Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of Board. The audit paid to the auditors with respect to 2021 and 2020 were pre-approved by the Board of Directors.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Exhibits
Description
31.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
31.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
32.1
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
32.2
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act XBRL Instance Document
XBRL Taxonomy Extension Schema Document XBRL Taxonomy Calculation Linkbase Document XBRL Taxonomy Labels Linkbase Document XBRL Taxonomy Presentation Linkbase Document XBRL Definition Linkbase Document