GLOBAL TECH A Our Management's Discussion and Analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report.
Forward-Looking Statements
This Quarterly Report contains forward-looking statements and information
relating to us that are based on the beliefs of our management as well as
assumptions made by, and information currently available to, our management.
When used in this report, the words "believe," "anticipate," "expect," "will,"
"estimate," "intend", "plan" and similar expressions, as they relate to us or
our management, are intended to identify forward-looking statements. Although we
believe that the plans, objectives, expectations and prospects reflected in or
suggested by our forward-looking statements are reasonable, those statements
involve risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements, and we can give no assurance that our plans,
objectives, expectations and prospects will be achieved. Important factors that
might cause our actual results to differ materially from the results
contemplated by the forward-looking statements are contained in the "Risk
Factors" section of and elsewhere in our Annual Report on Form 10-K for the
fiscal year ended
Company Overview
Prior Operational History
From inception until
The Company invested primarily in innovative and promising clean/renewable
energy or bio-tech technologies that had reached the stage in the critical
In
Current Operations
On
On
On
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Our wholly owned subsidiaries:
AboutTCBM Holdings, LLC
On
AboutHMNRTH, LLC
In
In order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through the Company's ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have the required capital to initiate any of the options and there is no guarantee that we will be able to raise the required funds.
Regulation of HMNRTH products:
The manufacture, labeling and distribution of our products is regulated by various federal, state and local agencies. These governmental authorities may commence regulatory or legal proceedings, which could restrict the permissible scope of our product claims or the ability to sell our products in the future. The FDA regulates our nutraceutical and wellness products to ensure that the products are not adulterated or misbranded.
We are subject to additional regulation as a result of our CBD products. The shifting compliance environment and the need to build and maintain robust systems to comply with different compliance in multiple jurisdictions increase the possibility that we may violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.
Failure to comply with FDA requirements may result in, among other things,
injunctions, product withdrawals, recalls, product seizures, fines and criminal
prosecutions. Our advertising is subject to regulation by the
About 911Help Now, LLC
911
About Markets onMain, LLC
Markets on
On
Global Clean Solutions, LLC Acquisition
Global Clean Solutions was founded as a special purpose entity in the Personal Protective Equipment Industry during the initial stages of the pandemic in 2020. Its management set out with a simple mission; deliver customers PPE while removing the panic from the pandemic. Global Clean Solutions has created a solid and repeatable foundation and is able to satisfy the needs of both government municipalities and corporations that many companies have tried, and few have succeeded.
? Direct to factory relationships ? Proprietary hand sanitizer ready to ship ? Funding programs available ? Government contract expertise ? Overseas production capabilities ? Distribution centers in CA and FL COVID-19
COVID-19 has caused and continues to cause significant loss of life and disruption to the global economy, including the curtailment of activities by businesses and consumers in much of the world as governments and others seek to limit the spread of the disease, and through business and transportation shutdowns and restrictions on people's movement and congregation.
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As a result of the pandemic, we have experienced, and continue to experience, weakened demand for our products. Many of our customers have been unable to sell our products in their stores due to government-mandated closures and have deferred or significantly reduced orders for our products. We expect these trends to continue until such closures are significantly curtailed or lifted. In addition, the pandemic has reduced foot traffic in the stores where our products are sold that remain open, and the global economic impact of the pandemic has temporarily reduced consumer demand for our products as they focus on purchasing essential goods.
Given these factors, the Company anticipates that the greatest impact from the COVID-19 pandemic in 2020 will occur in the second quarter of 2020 and will result in a significant net sales decline.
In addition, certain of our suppliers and the manufacturers of certain of our products were adversely impacted by COVID-19. As a result, we faced delays or difficulty sourcing products, which negatively affected our business and financial results. Even if we are able to find alternate sources for such products, they may cost more and cause delays in our supply chain, which could adversely impact our profitability and financial condition.
We have taken actions to protect our employees in response to the pandemic, including closing our corporate offices and requiring our office employees to work from home. At our grow facilities, certain practices are in effect to safeguard workers, including a staggered work schedule, and we are continuing to monitor direction from local and national governments carefully.
As a result of the impact of COVID-19 on our financial results, and the anticipated future impact of the pandemic, we have implemented cost control measures and cash management actions, including:
? Furloughing a significant portion of our employees; and
? Implementing 20% salary reductions across our executive team and other members of upper level management; and
? Executing reductions in operating expenses, planned inventory levels and non-product development capital expenditures; and
? Proactively managing working capital, including reducing incoming inventory to align with anticipated sales.
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Critical Accounting Policies, Judgments and Estimates
There were no material changes to our critical accounting policies and estimates
during the interim period ended
Please see our Annual Report on Form 10-K for the year ended
Components of our Results of Operations
Revenues
We sell consumer products either wholesale or direct to consumer through the Company's ecommerce sites. In addition, we generate revenue through the logistics services we offer through our wholly owned subsidiary, Market on Main.
Cost of Revenues
Our cost of revenues includes inventory costs, materials and supplies costs, internal labor costs and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.
Interest Expense, Net
Interest expense includes the cost of our borrowings under our debt arrangements.
Results of Operations
Three Months Ended
The following table sets forth information comparing the components of net
(loss) income for the three months ended
Three Months Ended Period over
September 30, Period Change
2020 2019 $ %
Revenues, net $ - $ - $ - -
Cost of revenues - - - -
Gross profit - - - -
Operating expenses:
Selling, general and
administrative 38,437 1,833 36,604 1,997.00 %
Other operating expenses 29,758 87,500 (57,742 ) -209.97 %
Operating loss (68,195 ) (89,333 ) (21,138 ) -23.66 %
Other (expense) income:
Gain (loss) on derivative
liability (3,965 ) (126,400 ) (122,435 ) -96.86 %
Gain (loss) on issuance of notes
payable (115,290 ) - 115,290 100 %
Amortization of debt discounts (311,409 ) (8,890 ) 302,519 3,402.91 %
Interest expense (16,943 ) (3,615 ) 13,328 368.69 %
Total other expenses (447,607 ) (138,905 ) 308,702 222.24 %
Loss before income taxes (515,802 ) (228,238 ) 287,564 125.99 %
Income tax expense - - - -
Net loss (515,802 ) (228,238 ) 287,564 125.99 %
Revenue
There were no revenues generated for the three months ended
Cost of Revenues
For the three months ended
Gross Profit
For the three months ended
Operating Expenses
Selling, general and administrative expenses were
Other Expenses
Other expenses were
Income tax expense
There was no income tax expense for the three months ended
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Liquidity and Capital Resources
As of
We had cash provided by investing activities of $- and $- for the three months
ended
We had cash (used in) provided by financing activities of
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Seasonality
We do not consider our business to be seasonal.
Commitments and Contingencies
We are subject to the legal proceedings described in "Part II, Item 1. Legal Proceedings" of this report. There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.
Inflation and Changing Prices
Neither inflation nor changing prices for the three months ended
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