ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition
and results of operations for the three months ended July 31, 2019 should be read together with our unaudited financial statements
and related notes included elsewhere in this quarterly report. This discussion contains forward-looking statements and information
relating to our business that reflect our current views and assumptions with respect to future events and are subject to risks
and uncertainties that may cause our or our industry’s actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements. These forward-looking statements speak only as of the date of this report. Although we believe that
the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
or achievements. Except as required by applicable law, including the securities laws of the United States, we expressly disclaim
any obligation or undertaking to disseminate any update or revisions of any of the forward-looking statements to reflect any change
in our expectations with regard thereto or to conform these statements to actual results.
Black Cactus Global, Inc. (formerly Envoy Group Corp.) (the “Company”) was incorporated in the State of Florida on April 8, 2013, with a fiscal year end of April 30. Until June 2017, we had not established any business operations and had not achieved any revenues. Until then, we were in the process of identifying and evaluating feasible business opportunities in the consumer products and technology industries.
The address of the head office is Suite 200, 8275 South Eastern Avenue, Las Vegas, Nevada 89123. On December 4, 2017, the Company changed its name to “Black Cactus Global, Inc.” with a plan to engage in the development of commercial Blockchain technology and Smart Contract software applications for healthcare, Fintech, logistics and energy solutions worldwide.
We are currently focused on developing blockchain software platforms. Our plan is to develop or license intellectual property to build blockchain platforms for a variety of uses. Our initial efforts will focus on utilizing the intellectual property in two ways: to develop secure blockchain based supply chain and inventory control systems, and to develop a blockchain based trading platform in order to facilitate securities trading using either a fiat currency or cryptocurrency.
On October 30, 2018, an aggregate of 50,000,000 shares of our common stock, which
were issued in certificated form on April 27, 2018, in the amounts of 12,500,000 each to our directors Dr. Pruthvinath
Kancherla, Dr. Ravindranath Kancherla Dr. Ramesh Para, and to Sai Krishna Para, the nephew of Dr. Ramesh Para, were
transferred into book entry form. These shares of common stock were issued to them in consideration for their services to be
performed, in connection with our proposed acquisition of 29% of the outstanding common stock of Black Cactus Global
Technologies Pvt. Limited (“BCGT”), a corporation organized under the laws of India, the CEO of which is Dr.
Ramesh Para, the CEO of the Company, and were to be cancelled if the acquisition was not consummated. On October 24, 2018, we
received notice from the applicable regulators, in India, that they would not approve our acquisition of the shares of common
stock of BCGT. As a result, the transaction was never consummated. The 50,000,000 shares of our common stock issued to our
three directors and Sai Krishna Para were to be cancelled as a result of the failure to consummate the acquisition of the
shares of common stock of BCGT, but such shares have not yet been cancelled and continue to be issued and outstanding shares
of common stock of the Company.
During the quarterly period ended July 31, 2019, we were not deemed
an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “Jobs Act”).
A company continues to be deemed an “emerging growth company” until the last day of the fiscal year of the issuer following
the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration
statement under the Securities Act of 1933. Our first sale of common equity pursuant to an effective registration statement was
during the three months ended October 31, 2013, and last day of the fiscal year of the fifth anniversary of the date of the first
sale of our common equity securities was April 30, 2019. As a result, after April 30, 2019, we were no longer an “emerging
Critical Accounting Policies
As of July 31, 2019, there were no critical accounting policies.
See the footnotes to our unaudited financial statements, included elsewhere in this quarterly report on Form 10-Q, for a complete
summary of the significant accounting policies used in the presentation of our financial statements. The summary is presented to
assist the reader in understanding the financial statements. The accounting policies used conform to accounting principles generally
accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
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Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during the reporting period.
Recently Issued Accounting Standards
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Results of Operations
The following discussion of the Company’s financial condition and the results of operations should be read in conjunction with the unaudited financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q.
There is no historical financial information about us upon which
to base an evaluation of our performance. We had net loss of $119,665 and $697,088 for the three months ended July 31, 2019 and
We did not generate any revenues from our operations for the three
months ended July 31, 2019 or 2018. 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 the financial risks associated with the limited
capital resources currently available to us for the implementation of our business strategies.
During the three months ended July 31, 2019 and 2018, we had operating expenses of $3,148 and $363,401,
respectively. The decrease in operating expenses is primarily due to a decrease in consulting fees of $106,733, a decrease
in general and administrative of $122,700, and a decrease in professional fees of $104,070.
Since inception, the majority of our time has been spent refining its business plan and preparing for a primary financial offering.
Our results of operations are summarized below:
For the Three
July 31, 2019
For the Three
July 31, 2018
Cost of Revenue
Net Loss (Income) and Comprehensive (Loss) Income
Net Loss (Income) per Common Share, Basic and Diluted
Weighted Average Number of Common Shares Outstanding, Basic and Diluted
Management’s Plan of Operation
We do not have adequate funds to satisfy our working capital requirements
for the next twelve months. We have borrowed a total of $1,000,000 from Bellridge Capital LP (“Bellridge”) to fund
our planned plan of operations in digital currency mining. We sold Bellridge our Senior, Secured Convertible Promissory Notes (the
“Notes”). Thus far, Bellridge has purchase $1,000,000 in Notes. Pursuant to the terms of our agreements with
Bellridge, we were required to file a registration statement with the SEC to register the shares of Common Stock to be issued under
those agreements. We filed the registration statement on April 24, 2018 but it has not yet been declared effective. We received
the third tranche of $200,000 from Bellridge after the first set of SEC comments. We may not receive the fourth and final
tranche of $500,000 unless and until the registration statement is declared effective by the SEC. We cannot estimate when our registration
statement will be declared effective by the SEC. Under certain conditions, Bellridge may not have to purchase the fourth Notes.
These conditions include any acts constituting default under any of the Notes or the agreements entered into at the time
of the first purchase of the Note issued on November 27, 2017. Until such time as we receive the final $500,000 of funding
from Bellridge, in the interim, we may not be able to completely implement and commence our proposed plan of operations.
As of July 31, 2019, we had not yet had any revenues from our services
in the digital currency mining field.
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Liquidity and Capital Resources
As of July 31, 2019, we had not generated any revenues from our
business operations. As at July 31, 2019, there were 166,073,296 shares of common stock issued and outstanding. Total cash proceeds
received from common share issuance since inception to July 31, 2019 is $90,500.
As of July 31, 2019, we had no cash on hand compared to $41,751
as of July 31, 2018. Our cash was not sufficient to meet the obligations associated with being a company that is fully reporting
with the SEC. We believe we will require additional financing in the form of share issuance proceeds or advances from our directors.
Our business expansion will require significant capital resources that may be funded through the issuance of common stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status, we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.
During the three months ended July 31, 2019 and 2018, we had operating
expenses of $3,148 and $363,401, respectively. Historically, we have relied on loans to fund general and administrative operating
expenses. As of July 31, 2019, we had a working capital deficiency of $2,472,549.
As of July 31, 2019, the Company had no external sources of liquidity
such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have
a current or future effect on our financial condition or immediate access to capital.
Our independent auditor has expressed substantial doubt about our ability to
continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise
capital and generate revenues. See Note 2 of our financial statements.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation under a guarantee contract that has any of the characteristics identified in FASB ASC paragraph 460-10-15-4 (Guarantees Topic), as may be modified or supplemented, and that is not excluded from the initial recognition and measurement provisions of FASB ASC paragraphs 460-10-15-7, 460-10-25-1, and 460-10-30-1; (ii) a retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets; (iii) any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, except that it is both indexed to the registrant’s own stock and classified in stockholders’ equity in the registrant’s statement of financial position, and therefore excluded from the scope of FASB ASC Topic 815, Derivatives and Hedging, pursuant to FASB ASC subparagraph 815-10-15-74(a), as may be modified or supplemented; or (iv) any obligation, including a contingent obligation, arising out of a variable interest (as defined in the FASB ASC Master Glossary), as may be modified or supplemented) in an unconsolidated entity that is held by, and material to, the registrant, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with, the registrant.
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On August 24, 2019, the Company entered into a Software License
Agreement (“License Agreement”) with Charteris, Mackie, Baillie & Cummins Limited (“CMBC Limited”)
to acquire a non-exclusive license for Black Cactus blockchain development software platform and related intellectual property
(“Software”) which are licensed to CMBC Limited from Black Cactus LLC. As consideration, the Company shall pay CMBC
Limited a royalty in the amount of five percent (5%) of the gross revenue received from the sublicense of the Software (“royalty”),
due on a quarterly basis, and issue or assign an equivalent number of common shares to CMBC Limited that will represent 60% of
the then issued shares of the Company. In addition, the Company will issue an option for CMBC Limited to acquire additional shares
at par value ($0.0001) per share up to 60% of any shares issued under the existing Securities Purchase Agreements with Bellridge.
The closing of the License Agreement is subject to, among certain other conditions: (1) the Company obtaining a written agreement
with Bellridge to increase its line of credit from $1,500,000 to $5,000,000; (2) the resignation of all the directors of the Company
serving on the Board, during the quarterly period ended July 31, 2019, which was satisfied by the resignation of all of such directors
on September 13, 2019, and the appointment of Lawrence P. Cummins, Karyn Augustinus and three non-executive independent Directors
nominated by CMBC Limited; (3) the resignation of all the officers of the Company serving, during the quarterly period ended July
31, 2019, which was satisfied by the resignation of all of such officers on September 13, 2019, and the appointment of Lawrence
P. Cummins as its President (after undertaking a review of the future plans of the Company, the Board of Directors will appoint
a Chief Executive Officer); (4) proof satisfactory to CMBC Limited that fair resolutions have been entered into with certain persons,
including Harpreet Sangha, the former Chairman of the Board and Chief Financial Officer of the Company, along with his family and
known associates for the cancellation of the shares of the Company currently owned by them; (5) CMBC Limited is satisfied with
the possibility of lifting the Cease Trade Order issued by the British Columbia Securities Commission on May 6, 2016, to the Company,
ordering all persons to cease trading in the Company’s securities until the Company files the required records completed
in accordance with the Securities Act, R.S.B.C. 1996 and the Executive Director revokes the Order; (6) the cancellation of $350,000
amount allegedly outstanding under the terms of the Definitive Acquisition Agreement, dated as of June 18, 2017, between the Company
and the selling shareholders of BitReturn.ca; (7) repayment by the majority shareholder of the Company of $169,729 owed by such
shareholder to the Company; and (8) the Company’s becoming current in its periodic filing with the SEC.
On November 15, 2019, the Company entered into an Assignment Agreement with CMBC Limited to acquire the assignment of a non-exclusive software license (“License”) for Software from Benchmark Advisors Limited (the “Assignment Agreement”). As consideration for the assignment of the License, CMBC Limited will be paid $250,000 directly from Bellridge on behalf of the Company as part of the increased line of credit of $5,000,000. The closing of the Assignment Agreement is subject to the same conditions required to be satisfied for consummation of the License Agreement.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports
filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
by the SEC’s rules and forms, and that information is accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Our Chief Executive
Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of July 31, 2019 pursuant
to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective
to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported
within the time periods specified in the SEC rules and forms.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial
reporting that occurred during the quarter ended July 31, 2019 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS
ITEM 1A. RISK FACTORS
Not required for smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
Software License Agreement, dated August 24, 2019, between Charteris, Mackie, Baillie & Cummins Limited and Black Cactus Global, Inc. (1)
Assignment Agreement, dated November 15, 2019, between Charteris, Mackie, Ballie & Cummins Limited and Black Cactus Global, Inc. (1)
Certification of CEO pursuant to Rule 13a-14(a)/15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of CFO pursuant to Rule 13a-14(a)/15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of CEO pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of CFO pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation
XBRL Taxonomy Extension Definition
XBRL Taxonomy Extension Labels
XBRL Taxonomy Extension Presentation
* Filed herewith.
** To be submitted by amendment.
(1) Filed as an Exhibit to the Company’s Quarterly Report for the quarter ended October 31, 2018.
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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.
BLACK CACTUS GLOBAL, INC.
Date: June 29, 2020
By: /s/ Jeremy Towning
Chief Executive Officer and Chief Financial Officer
(Duly Authorized Officer and Principal Executive Officer and Principal Financial Officer)
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