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EX-31.1 - CERTIFICATION - BOATIM INC.btim_ex311.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended May 31, 2020

 

o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission file number 333-200629

 

BOATIM INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada

7370

84-4779679

State or other jurisdiction

of incorporation or organization

Primary Standard Industrial

Classification Number

IRS Employer

Identification Number

 

7950 NW 53rd Street, Suite 337, Miami, FL 33166.

Tel: +1 (305) 239-9993

(Address and telephone number of principal executive offices)

 

______________________________________________________________ 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

Non-accelerated filer

Large accelerated filer

Smaller reporting company

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 50,500,011 common shares issued and outstanding as of July 15, 2020.

 

 

 

 

BOATIM INC.

 

QUARTERLY REPORT ON FORM 10-Q

 

TABLE OF CONTENTS

 

Page

PART I FINANCIAL INFORMATION:

Item 1.

Consolidated Financial Statements (Unaudited)

3

Consolidated Balance Sheets as of May 31, 2020 (Unaudited) and August 31, 2019

4

Consolidated Statements of Operations for the Three and Nine Months Ended May 31, 2020 and May 31, 2019 (unaudited)

5

 

Consolidated Statements of Changes in Stockholders’ Deficit for the Nine Months Ended May 31, 2020 and May 31, 2019 (unaudited)

 

6

 

Consolidated Statements of Cash Flows for the Nine Months Ended May 31, 2020 and 2019 (unaudited)

7

Notes to the Unaudited Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

12

Item 4.

Controls and Procedures

12

PART II OTHER INFORMATION:

Item 1.

Legal Proceedings

13

Item 1A.

Risk Factors

13

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

13

Item 3.

Defaults Upon Senior Securities

13

Item 4.

Submission of Matters to a Vote of Securities Holders

13

Item 5.

Other Information

13

Item 6.

Exhibits

14

Signatures

15

 

 
2

 

 

PART 1 – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The accompanying interim consolidated financial statements of BOATIM Inc. (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

 

The interim consolidated financial statements should be read in conjunction with the company’s latest annual financial statements.

 

In the opinion of management, the consolidated financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

 

 
3

Table of Contents

 

BOATIM INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

May 31

 

 

August 31

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash

 

$ 34,887

 

 

$ 15,691

 

VAT receivable

 

 

11,088

 

 

 

-

 

Total current assets

 

 

45,975

 

 

 

15,691

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

4,787

 

 

 

4,787

 

Total other assets

 

 

4,787

 

 

 

4,787

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$ 50,762

 

 

$ 20,478

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 42,507

 

 

$ 46,652

 

Related party loan

 

 

619,334

 

 

 

214,550

 

Related party loan - acquisition

 

 

500,000

 

 

 

500,000

 

TOTAL LIABILITIES

 

 

1,161,841

 

 

 

761,202

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock: authorized 500,000,000; $0.001 par value; 50,500,011 shares issued and outstanding at May 31, 2020 and August 31, 2019

 

 

50,500

 

 

 

50,500

 

Additional Paid in Capital

 

 

(322,135 )

 

 

(403,425 )

Accumulated deficit

 

 

(839,427 )

 

 

(387,392 )

Accumulated other comprehensive loss

 

 

(17 )

 

 

(407 )

Total Stockholders' deficit

 

 

(1,111,079 )

 

 

(740,724 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$ 50,762

 

 

$ 20,478

 

  

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4

Table of Contents

 

BOATIM INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

 

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

May 31,

 

 

May 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and Administrative

 

$ 209,346

 

 

$ 11,190

 

 

$ 452,035

 

 

$ 23,568

 

Total operating expenses

 

 

209,346

 

 

 

11,190

 

 

 

452,035

 

 

 

23,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(209,346 )

 

 

(11,190 )

 

 

(452,035 )

 

 

(23,568 )

Net loss

 

$ (209,346 )

 

$ (11,190 )

 

$ (452,035 )

 

$ (23,568 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

1,003

 

 

 

-

 

 

 

390

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$ (208,343 )

 

$ (11,190 )

 

$ (451,645 )

 

$ (23,568 )

Net loss per common share – basic and diluted

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.01 )

 

$ (0.00 )

Weighted average common shares outstanding – basic and diluted

 

 

50,500,011

 

 

 

50,500,011

 

 

 

50,500,011

 

 

 

50,500,011

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
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Table of Contents

 

BOATIM INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED MAY 31, 2020 AND MAY 31, 2019

(Unaudited)

 

 

 

Common Stock:

Shares

 

 

Common Stock: Amount

 

 

Additional Paid in Capital

 

 

Accumulated

other Comprehensive Income

 

 

Accumulated

Deficit

 

 

Totals

 

Balance -August 31, 2018

 

 

50,500,011

 

 

$ 50,500

 

 

$ 96,575

 

 

$ -

 

 

$ (231,374 )

 

 

(84,299 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,127 )

 

 

(4,127 )

Balance November 30, 2018

 

 

50,500,011

 

 

$ 50,500

 

 

$ 96,575

 

 

$ -

 

 

$ (235,501 )

 

 

(88,426 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of assets under common control

 

 

-

 

 

 

-

 

 

 

(500,000 )

 

 

-

 

 

 

-

 

 

 

(500,000 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8,251 )

 

 

(8,251 )

Balance February 28, 2019

 

 

50,500,011

 

 

$ 50,500

 

 

$ (403,425 )

 

$ -

 

 

$ (243,752 )

 

 

(596,677 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11,190 )

 

 

(11,190 )

Balance May 31, 2019

 

 

50,500,011

 

 

$ 50,500

 

 

$ (403,425 )

 

$ -

 

 

$ (254,942 )

 

 

(607,867 )

 

 

 

Common Stock:

Shares

 

 

Common Stock: Amount

 

 

Additional Paid in Capital

 

 

Accumulated

other Comprehensive Income

 

 

Accumulated

Deficit

 

 

Totals

 

Balance – August 31, 2019

 

 

50,500,011

 

 

$ 50,500

 

 

$ (403,425 )

 

$ (407 )

 

$ (387,392 )

 

 

(740,724 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forgiveness of related party debt

 

 

-

 

 

 

-

 

 

 

81,290

 

 

 

-

 

 

 

-

 

 

 

81,290

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(454 )

 

 

-

 

 

 

(454 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(77,681 )

 

 

(77,681 )

Balance November 30, 2019

 

 

50,500,011

 

 

$ 50,500

 

 

$ (322,135 )

 

$ (861 )

 

$ (465,073 )

 

 

(737,569 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(159 )

 

 

-

 

 

 

(159 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(165,008 )

 

 

(165,008 )

Balance February 29, 2020

 

 

50,500,011

 

 

$ 50,500

 

 

$ (322,135 )

 

$ (1,020 )

 

$ (630,081 )

 

 

(902,736 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,003

 

 

 

-

 

 

 

1,003

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(209,346 )

 

 

(209,346 )

Balance May 31, 2020

 

 

50,500,011

 

 

$ 50,500

 

 

$ (322,135 )

 

$ (17 )

 

$ (839,427 )

 

 

(1,111,079 )

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
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Table of Contents

 

BOATIM INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the nine months ended

 

 

 

May 31,

2020

 

 

May 31,

2019

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$ (452,035 )

 

$ (23,568 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

 

Changes in net operating assets and liabilities -

 

 

 

 

 

 

 

 

VAT receivable

 

 

(11,088 )

 

 

-

 

Accounts payable and accrued expenses

 

 

(4,145 )

 

 

602

 

Other payables – related parties

 

 

-

 

 

 

36,742

 

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

 

 

(467,268 )

 

 

13,776

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Computer Software development costs

 

 

-

 

 

 

(13,776 )

NET CASH USED IN INVESTING ACTIVITIES

 

 

-

 

 

 

(13,776 )

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from related party loans

 

 

486,074

 

 

 

28,243

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

486,074

 

 

 

28,243

 

 

 

 

 

 

 

 

 

 

EFFECT OF FOREIGN CURRENCY TRANSLATION

 

 

390

 

 

 

-

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND RESTRICTED CASH

 

 

19,196

 

 

 

28,243

 

 

 

 

 

 

 

 

 

 

CASH – BEGINNING OF PERIOD

 

 

15,691

 

 

 

468

 

CASH  – END OF PERIOD

 

$ 34,887

 

 

$ 28,711

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASHFLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

Income tax

 

$ -

 

 

$ -

 

Interest

 

$ -

 

 

$ -

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Forgiveness of related party loan

 

$ 81,290

 

 

$ -

 

Due to related party for acquisition of intangible asset

 

$

 

 

$ 500,000

 

  

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
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Table of Contents

 

BOATIM INC.

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2020 AND MAY 31, 2019

(Unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Boatim Inc. formerly known as Emerald Data Inc. (“we”, “our, “Boatim”, the “Company”) is a for profit corporation established under the corporate laws of the State of Nevada on August 15, 2014. On January 24, 2019 the Company´s board and shareholders passed a motion to change the Company name to “BOATIM INC.” Its fiscal year end is August 31.

 

On November 07, 2019, the Company’s Board of Directors approved a 3 for 1 reverse stock Split. The current financial statements as well as prior year’s financial statements have been retroactively adjusted to reflect the reverse stock split.

 

Boatim, Inc. established Boatim Europe S.L. (“Boatim Europe”) as a private limited company pursuant to the laws of the Spain on December 18, 2019, with the Company having ownership of one hundred percent of the issued and outstanding membership interests of Boatim Europe. Boatim Europe is currently structured as a wholly owned subsidiary of the Company. Boatim Europe commenced operations in February 2020 and intends to engage in the business of providing software development and consulting for the boat industry.

 

Originally in the business of producing and distributing furniture, the business was changed to online food blogging as a promotion channel for restaurants, bars and fine dining. Additionally, we are expanding into the boating industry by acquiring and further developing the Company trading platform.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

  

The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, all of which have a fiscal year end of August 31. All intercompany accounts, balances and transactions have been eliminated in the consolidation.

 

Basis of Presentation

 

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended August 31, 2019 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended May 31, 2020 are not necessarily indicative of the results that may be expected for the year ending August 31, 2020.

 

Foreign Currency

 

Assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at the respective rates of exchange prevailing at the end of the reporting period. Income and expense accounts are translated at average exchange rates prevailing during the reporting period. Translation adjustments resulting from this process are recorded directly in equity as accumulated other comprehensive (loss) income (“AOCI”) and will be included as income or expense only upon sale or liquidation of the underlying entity or asset. Generally, all of the Company’s non-U.S. subsidiaries use their local currency as their functional currency.

 

 
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Use of Estimates

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The management makes its best estimate of the outcome for these items based on information available when the financial statements are prepared. Actual results could differ from those estimates.

 

Recently Adopted Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. ASU 2016-02 requires a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and provides certain practical expedients that companies may elect including those contained in ASU 2018-01, "Leases (Topic 842): Lease Easement Practical Expedient for Transition to Topic 842". This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. The Company adopted this ASU and there was no impact to the consolidated financial statements and related.

 

On December 18, 2019, the FASB issued ASU 2019-12, which modifies ASC 740 to simplify the accounting for income taxes. The ASU’s amendments are based on changes that were suggested by stakeholders as part of the FASB’s simplification initiative (i.e., the Board’s effort to reduce the complexity of accounting standards while maintaining or enhancing the helpfulness of information provided to financial statement users. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is evaluating the impact of this on its consolidated financial statements.

 

On January 16, 2020, the FASB issued ASU 2020-01 in response to an EITF consensus. The ASU makes improvements related to the following two topics:  (a) Accounting for certain equity securities when the equity method of accounting is applied or discontinued — The ASU clarifies that “an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method.” (b) Scope considerations related to forward contracts and purchased options on certain securities — The ASU clarifies that “for the purpose of applying paragraph 815-10- 15-141(a) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825.”  This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.  The Company is evaluating the impact of this on its consolidated financial statements.

 

NOTE 3 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company had no revenues and incurred recurring losses. In addition, the Company has a negative working capital and has not completed its efforts to establish a stable source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.

 

Management anticipates that the Company will be dependent, for the near future, on borrowings from related parties to fund operating expenses. In light of management’s efforts, there are no assurances that the Company will be successful in any of its endeavors or become financially viable and continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

 

 
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NOTE 4 – RELATED PARTY TRANSACTIONS

 

Mr. Robert Glass, a lawyer, is providing services free of charge from time to time, such services involving advice on accounting matters and processing of information for reporting services.

 

The Chief Technology Officer of the Company, Mr. Patrick Heneise is also the owner of Zentered OÜ (fka Heneise Consulting OÜ. Zentered has provided software development and maintenance services and has billed approximately $23,213 during the nine months ended May 31, 2020.

 

On September 12, 2019, Veng Kun Lun, an officer and director of the Company, forgave all amounts due to him from the Company, totaling $81,290, which was recorded as additional paid in capital.

 

As of May 31, 2020, the Company owed a total of $1,119,334 to a related party. Related party loans consist of $619,334 due to Cayo Ventures GmbH for payment related to software development, accounting, transfer agent and legal fees. Cayo Ventures GmbH is owned by the former majority shareholder and former officer, Mr. Yves Toelderer. These loans are unsecured, non-interest bearing and due on demand.

 

During the year ended August 31, 2019, the Company issued a note in the amount of $500,000 to a former majority shareholder and former officer, Mr. Yves Toelderer for the purchase of the Boatim software platform. The note matured, on January 23, 2020. The Company has renegotiated the note, which is now due by January 23, 2021. The Company was never considered to be in default. The note is unsecured and bears no interest.

 

On December 12, 2019, Mr. Yves Toelderer transferred 32,766,667 (post reverse stock split) shares of common stock representing the entire control block, of 64.88% ownership, to JTT Global Ventures Ltd, a British Virgin Island based holding company, against JTT Global Ventures Ltd. assuming all obligations against New Million Global Holdings Ltd. under the promissory note.

 

NOTE 5 – COMMON STOCK

 

On January 23, 2019 the Company´s board and shareholders had passed a motion that a 1:3 reverse split of the Company´s common stock should be performed. The stock split was affected on November 07, 2019. All share amounts have been retroactively adjusted to reflect the reverse stock split. As of May 31, 2020, a total of 50,500,011 shares of common stock were issued and outstanding.

 

NOTE 6 – SUBSEQUENT EVENTS

 

During the period June 01, 2020 thru July 15, 2020, Cayo Ventures advanced a total $80,000 to the Company for payment of operating expenses. These loans are unsecured, non-interest bearing and due on demand.

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward looking statement notice

 

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have had a minimal impact on our day to day operations. However, this could impact our efforts to enter into a business combination as other businesses have had to adjust, reduce or suspend their operating activities. The extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19. The Company is unable to predict the ultimate impact at this time.

 

General

 

Boatim Inc. formerly known as Emerald Data, Inc. was incorporated in the State of Nevada as a for-profit company on August 15, 2014 and established a fiscal year end of August 31.

 

On December 18, 2019, the Company formed a subsidiary in Spain, Boatim Europe S.L. in order to attract competent talent for its staff. The subsidiary was registered with company ID 39157722, established under Spanish law and with its registered office in Barcelona, Spain. Boatim Inc. controls 100% of Boatim Europe S.L.´s shares.

 

Results of operations

 

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

 

Results of Operations for the Three Months Ended May 31, 2020 and May 31, 2019

 

Operating expenses

General and administrative expenses were $209,346, compared to $11,190 for the three months ended May 31, 2019, an increase of $198,156. The increase is due to increased operating expenses associated with a concentration of resources on reporting and administrative tasks post the acquisition of the BOATIM platform as well as operating expenses associated with the new Spanish subsidiary, Boatim Europe.

 

Net Loss

Net loss for the three months ended May 31, 2020 was $209,346 compared to $11,190 for the three months ended May 31, 2019 due to the reasons discussed in sub-section “Operating expenses” above.

 

Results of Operations for the Nine Months Ended May 31, 2020 and May 31, 2019

 

Operating expenses

General and administrative expenses were $452,035 for the nine months ended May 31, 2020, compared to $23,568 for the nine months ended May 31, 2019, an increase of $428,467. The increase is due to increased operating expenses associated with a concentration of resources on reporting and administrative tasks post the acquisition of the BOATIM platform as well as operating expenses associated with the new Spanish subsidiary, Boatim Europe.

 

Net Loss

Net loss for the nine months ended May 31, 2020 was $452,035 compared to $23,568 for the nine months ended May 31, 2019 due to the reasons discussed in sub-section “Operating expenses” above.

 

 
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Liquidity and capital resources

 

At May 31, 2020, we had $34,887 in cash and there were outstanding liabilities of $1,161,841 (cash of $15,691 and liabilities of $761,202 on August 31, 2019, respectively). The stockholders’ deficit was $1,111,079 as of May 31, 2020 and $740,724 as of August 31, 2019.

 

There was $467,268 cash used in operations during the nine months ended May 31, 2020 ($13,776 net cash provided by operating activities during the nine months ended May 31, 2019), $0 cash used in investing activities during the nine months ended May 31, 2020 ($13,776 net cash used in investing activities for the nine months ended May 31, 2019), $486,074 cash provided through financing activities during the nine months ended May 31, 2020 ($28,243 in net cash provided by financing activities for the nine months ended May 31, 2019). This resulted in $19,196 changes in net cash during the nine months ended May 31, 2020 and $28,243 change in net cash during the nine months ended May 31, 2019, respectively.

 

Cayo Ventures GmbH has verbally agreed to continue to loan the Company funds for operating expenses in a limited scenario, but they have no legal obligation to do so.

 

There is limited historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage of operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

 

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

 

Off-balance sheet arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

This item is not applicable as we are currently considered a smaller reporting company.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this document. Based on the evaluation, they have concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were not effective as of May 31, 2020 due to the material weaknesses as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC.

 

Changes in Internal Control over Financial Reporting

 

Such officers also confirmed that there was no change in our internal control over financial reporting during the nine months ended May 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITES

 

None

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

 

None

 

ITEM 5. OTHER INFORMATION

 

None

 

 
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ITEM 6. EXHIBITS

 

The following exhibits are included as part of this report by reference:

 

31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

32.1

Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

32.2

Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Boatim Inc.

 

Registrant

 

 

Date: July 15, 2020

By:

/s/ Wolfgang Tippner

 

Wolfgang Tippner

 

(Chief Executive Officer)

 

Date: July 15, 2020

By:

/s/ Teck Siong LIM

 

 

Teck Siong Lim

 

 

Chief Financial Officer