The financial report highlights key events and developments, such as changes in preferred stock, common stock, additional paid-in capital, and retained earnings. It also mentions building improvements, subscription and license fees, and training and education expenses. The report covers various periods, including Q1, Q3, and Q4 of 2023 and 2024, as well as annual financial statements.
Overview
The Company is developing artificial intelligence products to eliminate language barriers in communications. The focus is on a proprietary technology that is faster and more accurate than competitors, with a commitment to superior quality services. The Company intends to serve a variety of markets and become a leader in pragmatic products for interpretation and translation.
Business Summary
Originally focused on live promotions and events, the Company now develops artificial intelligence technologies to solve everyday problems and elevate the human condition. Using natural language processing and prediction, the Company aims to enhance the metaverse.
The Company recently launched Verbum for real-time interpretation and Verbum SDK for developers to integrate interpretation into their own applications.
Our Products
The Company has proprietary technologies and associated patents for:
Verbum - Enables conversations, meetings, and chats in 112 languages for 40 dialects. It is distributed through the Company’s platform, direct business sales, and potential video conferencing partnerships. It competes against providers like Microsoft, Zoom, and Google, but is cheaper than human interpreters.
Verbum SDK - Allows integration of Verbum into Software-as-a-Service apps and client/server programs, helping remove communication barriers. It may be distributed through developer partnerships or direct sales. It competes against interpretation service kits like Microsoft Azure and Amazon Translate.
Components of Our Results of Operations
Revenue
Currently from product sales. Expected to increase with new customers and offerings. May fluctuate quarter to quarter based on research, development, and additional products.
Operating Expenses
Research and Development - Developing the proprietary NLP technology and architecture. Includes talent, research, infrastructure, and equipment.
Salaries and Benefits - Investing in additional employees for functions like development, support, sales, and administration.
Infrastructure and Equipment – Technology infrastructure and equipment for development and distribution. Includes servers, licenses, hardware, and office equipment.
Professional Services – Potentially legal, accounting, consulting, or other professional services.
Distribution and Delivery - Product distribution and delivery expenses like shipping, licensing, or server maintenance.
Total Other Expense
Primarily interest expense. Also includes gains/losses from convertible note derivative liabilities.
Results of Operations for the Three Months Ended March 31, 2024 and 2023
Three months ended March 31, 2024 | Three months ended March 31, 2023 | Increase/Decrease | |
---|---|---|---|
Revenue | $5,387 | $3,160 | $2,227 |
Total revenue | 5,387 | 3,160 | 2,227 |
Operating expenses: | |||
Research and development | 232,889 | 145,032 | 87,857 |
General and administrative | 464,039 | 305,459 | 158,580 |
Advertising and marketing | 33,026 | 60,607 | (27,581) |
Legal and professional | 205,651 | 24,584 | 181,067 |
Total operating expenses | 935,605 | 535,682 | 399,923 |
Loss from operations | (930,218) | (532,522) | 397,696 |
Other expense: | |||
Interest expense | (6,879) | (9,891) | (3,012) |
Total other expense | (6,879) | (9,891) | (3,012) |
Net loss | $(937,097) | $(542,413) | $394,684 |
Revenue
Minimal revenue in both periods as products are in development without large customers.
Expenses
Increased by $399,923 primarily due to:
Other Expense
Decreased by $3,012 due to lower interest expense.
Net Loss
Increased by $394,684 due to $399,923 higher operating expenses.
Liquidity and Capital Resources
March 31, 2024 | December 31, 2023 | |
---|---|---|
Current Assets | $220,511 | $1,143,690 |
Current Liabilities | $914,061 | $1,025,919 |
Working Capital (Deficit) | $(693,550) | $117,771 |
Working capital deficit of $693,550 as of March 31, 2024. Net losses and negative operating cash flows expected in the near future. Primary sources of capital have been common stock sales and debt financing.
Cash Flow
Three Months Ended March 31, 2024 vs. March 31, 2023
| | Three Months Ended March 31 |
2024 | 2023 | |
Net cash used in operating activities | $(964,843) | $(373,560) |
Net cash provided by financing activities | $35,000 | $175,000 |
Net change in cash | $(929,843) | $(198,560) |
Operating Activities
Increased use of $591,283 primarily due to higher net loss.
Financing Activities
Decreased cash provided by $140,000 due to lower common stock sales.
Critical Accounting Policies and Estimates
No changes in critical accounting policies and estimates during the three months ended March 31, 2024.
Cautionary Notice Regarding Forward-Looking Statements
This report includes forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected or assumed results. Factors that could cause such differences include, but are not limited to: the pace of research and development, timing of additional products, fluctuations in revenue and expenses, and our capital requirements.
Notice Regarding Trademarks
Trademarks, tradenames and service marks in this report are the property of their respective owners. Failure to include trademark symbols does not suggest we will not assert our rights or the rights of applicable licensors.