HESTIA INSIGHT INC. The following discussion and analysis of the results of operations and financial
condition of
Unless otherwise indicated, references to the "Company," "us" or "we" refer to
Overview
The Company is focused primarily on the healthcare and biotech sectors through
the Company's two wholly owned operating subsidiaries,
Our Markets and Services
The Company's wholly owned operating subsidiary, Hestia Investments, provides strategic consulting, medical supply sales support, management, and capital market advisory services for select micro, small and medium sized companies in the healthcare and biotech sectors.
13
The Company's wholly owned operating subsidiary, Hestia Vending, operates within
the healthy food, beverage and wellness products industry and the smart vending
machine industry. On
The Company is positioned to make strategic acquisitions of and enter joint ventures with emerging growth companies with unique sciences and technologies. The Company also provides sales and marketing guidance and services and capital markets advisory services to its clients.
Sales and Marketing
We seek to develop new business through relationships driven by our senior management, which have extensive contacts throughout the healthcare system. Our senior management is seeking opportunities for joint ventures, strategic relationships and acquisitions in the healthcare and biotech sectors.
Business Model
The Company intends to pursue the acquisition and development of healthcare related technologies in the healthcare and biotech sectors through acquisition, licensing or joint ventures. We will also consider a third avenue of investing in certain technologies. The Company entered the healthcare sector to explore emerging healthcare technologies, especially growth companies that own and develop unique sciences and technologies.
Competitive Advantages
The Company focuses on small and micro-cap companies in the healthcare and biotech sectors with limited access to growth capital. We provide specialized consulting services to assist companies with their operations in the public markets. Our management team is experienced in risk management and exit planning. The Company's competitive advantages include a global business network of healthcare, investment and financial professionals who are integrated into the technology licensing and commercialization departments of universities and institutions. Through our offered services and access to investment, we intend to accelerate the development and commercialization of the healthcare businesses that we engage with.
Strategic Relationships
Immudyne Nutritional. On
We are in negotiation in our areas of focus with respect to potential acquisitions and strategic partnerships. There is no guarantee that we will be able to successfully sign a definitive agreement, close or implement such business arrangement.
14
Intellectual Property
The Company owns no patents. We have not applied for or received patent protection in the US or any other country, and, as a result, there is a distinct risk that we will not be able to adequately protect our intellectual property rights in these countries. We own and control a variety of trade secrets, confidential information, trademarks, and other intellectual property rights that, in the aggregate, are of material importance to our business. We consider our trademarks, service marks, and other intellectual property to be proprietary, and rely on a combination of copyright, trademark, trade secret, non-disclosure, and contractual safeguards to protect our intellectual property rights.
Competition
In our current consulting business, we compete with a number of advisory firms offering similar service including consulting and strategy firms; market research, data, benchmarking, and forecasting providers; technology vendors and services firms; health care information technology firms; technology advisory firms; outsourcing firms; and specialized providers of advisory services. Other organizations, such as state and national trade associations, group purchasing organizations, non-profit think-tanks, and database companies, also may offer research, consulting, tools, and advisory services to health care organizations.
We believe that the principal competitive factors in our market include quality and timeliness of our services, strength and depth of relationships with our clients, ability to meet the changing needs of current and prospective clients, measurable returns on customer investment, and service and affordability.
As our business develops and we expand through joint ventures, acquisitions and
strategic partnerships in the
Government Regulation
The health care industry in the
Employees
The Company has three employees. We otherwise rely on the services of independent contractors.
Our Offices Our principal executive office is located at400 S. 4th Street , Suite 500,Las Vegas, NV 89101. Our Website www.HestiaInsight.com 15 Legal Proceedings
From time to time, we are subject to ordinary routine litigation incidental to our normal business operations. We are not currently a party to, and our property is not subject to, any material legal proceedings.
Reports to Security Holders
We intend to furnish our shareholders annual reports containing financial
statements audited by our independent registered public accounting firm and to
make available quarterly reports containing unaudited financial statements for
each of the first three quarters of each year. We file Quarterly Reports on Form
10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K with the
Going Concern
We have a limited operating history, and our continued growth is dependent upon
the continuation of providing medical consulting services to our clients,
generating revenue, and obtaining additional financing to fund future
obligations, and pay liabilities arising from normal business operations. We had
accumulated earnings of
Our ability to continue as a going concern is dependent upon our ability to carry out our business plan, achieve profitable operations, obtain additional working capital funds from our significant shareholders, and or through debt and equity financings. However, there can be no assurance that any additional financings will be available to us on satisfactory terms and conditions, if any.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in
We base our estimates on historical experience and on various other assumptions that we 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. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements.
16
Revenue Recognition
We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or products have been sold, the purchase price is fixed or determinable and collectability is reasonably assured.
We provide medical related consulting services to our clients. We are paid fees for our services by our clients under written consulting agreements. Each contract calls for a fixed payment in a fixed period of time. We recognize revenue by providing medical related consulting services under written service contracts with our customers. Revenue related to our service offerings is recognized as the services are performed and amounts are earned, using the straight-line method over the term of the related services agreement. Prepayments, if any, received from customers prior to the services being performed are recorded as advance from customers. In these cases, when the services are performed, the amount recorded as advance from customers is recognized as revenue.
Income Taxes
We are governed by the income tax laws of
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probably that taxable profit will be available against which deductible temporary differences can be utilized.
Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is changed to equity. Deferred tax assets and liabilities are offset when they related to income taxes levied by the same taxation authority, and we intend to settle its current tax assets and liabilities on a net basis.
Stock-based Compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of Accounting Standards Codification ("ASC") 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the "measurement date." The expense is recognized over the period of services or the vesting period, whichever is applicable. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date.
17
Recent Accounting Pronouncements
In
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our consolidated financial condition, results of operations, cash flows or disclosures.
RESULTS OF OPERATIONS
Comparison of Results of Operations for the Nine months ended
Revenue
For the nine months ended
Cost of Revenue
Cost of revenue includes the cost of internal labor and related benefits, travel
expenses related to consulting services, subcontractor costs, other related
consulting costs, and other overhead costs. These costs are recorded as
operating expenses. For the nine months ended
Operating Expenses
For the nine months ended
For the nine months ended
For the
For the Nine months
Nine months ended ended
August 31, August 31,
2022 2021
Selling expense $ 10,639 $ 351
Professional fees 208,231 167,494
Other general and administrative 39,530 11,833
$ 258,400 $ 179,678
? Our selling expense mainly includes our marketing and sales staff's salaries
and related benefits, and travel and entertainment costs incurred by our sales
department. Selling expense totaled $10,639 for the nine months ended August
31, 2022 , and $351 for the nine months ended August 31, 2021 . Selling expense
as a percentage of revenue for the nine months ended August 31, 2022 is not
calculable
18
? Professional fees primarily consisted of accounting fees, legal service fees,
consulting fees, investor relations service charges, OTC markets application
and listing fees and other fees incurred for services related to becoming and
being a public company. For the nine months ended August 31, 2022 , and August
31, 2021 , professional fees amounted to $208,231 and $167,494 , respectively,
an increase of $40,737 or 24%. The increase was largely attributable to an
increase of $48,750 in fees to our board of directors. This is offset by a
decrease in legal services incurred in being a public company of $500 combined
with an decrease in audit fees incurred of approximately $1,300 ; a decrease in
accounting fees of $1,388 and a decrease in OTC market companies and similar
consultants of $6,959 . There was an increase in the wages and payroll taxes of
our employees of $17,109 and an increase in professional fees for our
contractors in China and Manilla of $12,605 . We expect professional fees to
increase as we incur significant costs associated with our public company
reporting requirements, and costs associated with newly applicable corporate
governance requirements, including requirements under the Sarbanes-Oxley Act
of 2002 and other rules implemented by the Securities and Exchange Commission .
? Other general and administrative expenses mainly consisted of automobile
expenses, office supplies, rent, bank service charges, depreciation and other
miscellaneous items. Other general and administrative expenses totaled $39,531
for the nine months ended August 31, 2022 , as compared to $11,833 for the nine
months ended August 31, 2021 , an increase of $27,698 . The increase was
primarily attributable to an increase in other miscellaneous general and
administrative expenses.
Income (Loss) from Operations
As a result of the foregoing, for the nine months ended
Other Income (Expense)
Other income includes interest income from bank deposits and interest income
from loans receivable that amounted to
Other income also includes interest income from a lease receivable that amounted
to
The Company had realized gains on equity investments of
The Company had
Income Taxes
We did not have any income taxes expense for the nine months ended
Net Income (Loss)
The net loss for the nine months ended
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current
and future operations, satisfy its obligations and otherwise operate on an
ongoing basis. On
19
We currently have no agreements and arrangements with any person to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.
Covid 19
A novel strain of coronavirus ("Covid-19") emerged globally in
That said, we have seen our business opportunities develop more slowly as business partners and potential customers are dealing with Covid-19 issues, working remotely and these issues are causing delays in decision making and finalization of negotiations and agreements.
Cash flows from Operating Activities
Operating activities used
Cash flows from Investing Activities
For the nine months ended
Cash flows from Financing Activities
For the nine months ended
Our capital requirements for the next twelve months primarily relate to cash to pay salaries, consulting fees and fees related to third parties' professional services. All funds received have been primarily expended in the furtherance of growing the business. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
? An increase in working capital requirements to finance our current business; ? Addition of administrative and sales personnel as the business grows; and ? The cost of being a public company.
We will need to raise additional funds, particularly if we are unable to
generate positive cash flow as a result of our operations. We estimate that
based on current plans and assumptions, that our available cash will be
insufficient to satisfy our cash requirements under our present operating
expectations. Other than working capital, advances received from related parties
and funds received pursuant to securities purchase agreements, we presently have
no other significant alternative sources of working capital. We have used these
funds to fund our operating expenses, pay our obligations and grow our company.
We will need to raise significant additional capital to fund our operations and
to provide working capital for our ongoing operations and obligations.
Therefore, our future operation is dependent on our ability to secure additional
financing. Financing transactions may include the issuance of equity or debt
securities, obtaining credit facilities, or other financing mechanisms. However,
the trading price of our common stock and a downturn in the
20
Going Concern.
The Company's financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and settlement of liabilities and
commitments in the normal course of business. For the nine months ended
Contractual Obligations and Off-Balance Sheet Arrangements
Contractual Obligations
We presently do not have any contractual obligations.
Off-balance Sheet Arrangements
We do not have any 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 that is material to investors.
Since inception, our principal sources of operating funds have been proceeds from equity financing including the sale of our Common Stock to initial investors known to management and principal shareholders of the Company. We do not expect that our current cash on hand will fund our existing operations. We will need to raise additional capital in order execute our business plan and growth goals for at least the next twelve-month period thereafter. If the Company is unable to raise sufficient additional funds, it will have to execute a slower than planned growth path, reduce overhead and scale back its business plan until sufficient additional capital is raised to support further operational expansion and growth. There can be no assurance that such a plan will be successful.
Inflation
The effect of inflation on our revenue and operating results was not significant.
© Edgar Online, source
