(TheNewswire)
Montréal – TheNewswire - September 22, 2022 – ZeU Technologies, Inc. (CSE:ZEU) (OTC:ZEUCF) would like toinform its shareholders that it has posted its Audited FinancialsStatements for the 15 month period ended March 31, 2022 and the prioryear ended December 31, 2020, and the corresponding ManagementDiscussion & Analysis on SEDAR.
ZeU is also providing an update to its previouslydisclosed Management Cease Trade Order (“ MCTO ”), initiallyannounced on August 2, 2022, in respect of the interim FinancialStatements and corresponding Management’s Discussion and Analysisfor the period ended June 30, 2022, including the related ChiefExecutive Officer and Chief Financial Officer certifications(collectively, the “ Financial Documents ”) that were not filed bythe filing deadline of August 29, 2022.
The Corporation has applied to the applicable securities regulatoryauthorities and received a Management Cease Trade Order (“ MCTO ”) imposed against the ChiefExecutive Officer (CEO) and the Chief Financial Officer (CFO) of theCorporation, precluding them from trading securities of theCorporation. The MCTO will be in effect until the Financial Documentsare filed and requires that the Financial Documents be filed on orbefore September 30, 2022.
ZeU Management aims to release the Interim Financial Documentspertaining to the 1 st Quarter of its 2022 financial year, covering the period of April 1,2022 to June 30, 2022 by the end of this month.
ZeU as a going concern
Since the withdrawal of the proposed transaction with a Chinese entityin August 2018, Management has been forced to operate with limitedcapabilities. From having to define from scratch, finance anddevelop a new business model to the upcoming deployment of some of itsproducts, the Company has been limited in its capacity to concludeacquisitions and see to its financing needs due to the existence of asignificant debt related and inherited from the proposed foundingtransaction.
In order to mitigate that issue Management expects to restructure theCompany’s debt and the business silos in the coming weeks. Debtrenegotiations shall occur with the parties willing to collaborate ona more permanent solution and certain businesses are expected to belet go. This exercise will be done with the shareholders interests inmind and should allow the Company to grow without financial or legalthreats to its existence.
More information should be available for disclosure in the comingweeks.
FINANCIAL RESULTS OVERVIEW
Summary of the Results ofOperation
For the fifteen months period ended March 31, 2022, the Companyrecorded a net loss of $14,274,215 (December 31, 2020 – $9,504,212)and had accumulative a deficit of $31,216,162 (December 31, 2020 -$16,941,947). The Company had no source of operating revenues or anyrelated operating expenditures.
Management has realised an impairment of 13,320,813 on the goodwill ofZeUPay (Prego) during the fifteen months period ended March 31, 2022
The following table provides a summary of the Company’s financialoperations for the prior two fiscal years.
Fifteen months ended March 31, 2022 | Year ended December 31, 2020 | |
$ | $ | |
Cash | 24,281 | 1,944 |
Working capital (deficiency) | (5,872,304) | (5,166,513) |
Total assets | 584,824 | 16,944 |
Shareholders’ equity (deficiency) | (12,096,035) | (9,419,731) |
Revenue | - | 354,860 |
Net loss and comprehensive loss for the period | (14,274,215) | (9,504,212) |
Basic and diluted loss per share | (0.41) | (0.39) |
Fifteen months endedMarch 31, 2022
The Company incurred a net loss of $14,274,215 in the fifteen months.Operating expenses were $5,790,195, and the Company recognized a lossof $23,755 upon the sale of certain marketable securities. The Companyalso recorded a recognized gain of $4,491,806 on the repayment of$3,917,000 Kamari convertible debentures plus accrued interest bytransferring 18,705,115 Kamari tokens to the debenture holder. TheCompany recognized a loss of $13,320,813 on impairment of goodwill ina subsidiary.
The Company recorded development services revenue of $354,860 forservices provided to a subsidiary of St-Georges, a shareholder of theCompany. The Company incurred a net loss of $9,504,212 in 2020.Operating expenses were $2,393,115, and the Company recorded anunrealized loss on digital assets of $6,881,396 as the Kamari tokenswere currently not trading. Therefore, a fair value could not bedetermined, resulting in a value assigned to them.
Summary of the QuarterlyResults
The following table outlines selected unaudited financial informationof the Company for the last eight quarters.
Mar.31, 2022 | Dec.31, 2021 | Sept.30, 2021 | Jun.30, 2021 | |
Total assets | 584,824 | 13,685,663 | 13,897,972 | 13,979,779 |
Working capital (deficiency) | (5,872,304) | (8,276,982) | (4,804,887) | (4,171,766) |
Long term debt | (6,223,731) | (5,209,749) | (8,117,434) | (7,657.429) |
Shareholders’ equity (deficiency) | (12,096,035) | (1,674,434) | (1,106,428) | 74.667 |
Revenue | - | - | - | - |
Net income (loss) | (10,436,131) | (1,333,757) | (1,069,805) | (1,971,674) |
Net income (loss) per share | (0.28) | (0.04) | (0.03) | (0.06) |
Mar.31, 2021 | Dec.31, 2020 | Sept.30, 2020 | Jun.30, 2020 | |
Total assets | 14,516,214 | 16,944 | 6,434,989 | 6,566,875 |
Working capital (deficiency) | (3,422,589) | (5,166,513) | (71,490) | (623,007) |
Long term debt | (7,105,381) | (3,904,516) | (4,289,359) | (3,986,915) |
Shareholders’ equity (deficiency) | 1,098,542 | (9,419,731) | (2,774,397) | (2,331,781) |
Revenue | - | 173,951 | 36,530 | 70,450 |
Net income (loss) | 537,152 | 7,873,657 | (628,452) | (15,703,409) |
Net income (loss) per share | 0.02 | 0.32 | (0.03) | (0.64) |
The main factors contributing to variances to the quarters up to March31, 2022, were a gain on Kamari convertible debt settlement in March2022 of $3,391,988, a loss of $13,320,813 on impairment of goodwill inMarch 2022, a loss of $23,874 on sale of marketable securities inSeptember 30, 2021, stock-based compensation of $727,630 in June 30,2021, a gain on Kamari convertible debt settlement in March 2021 of$1,099,818, stock-based compensation of $527,332 and an unrealizedloss of $6,881,396 on digital assets in December 2020, developmentservices revenue of $173,951 (December 2020), $36,530 (September2020), $70,450 (June 2020) and $73,929 (March 2020) with nocorresponding amounts in 2021. Also, unrealized losses on digitalassets of $147,845 (September 2020) $15,309,139 (June 2020), and otherquarter in early 2020 of $487,241 wereoffset by a gain of $9,062,829 in the last quarter of 2020.
In 2020, the Company impaired the value of its Kamari tokens as therewas no longer an objective market value for the tokens, except for theright to repay its Kamari debt at a mark to market price.
ON BEHALF OF THE BOARD OF DIRECTORS
“FrankDumas”
Frank Dumas
President & CEO
About ZeU
ZeU is a forward-thinking Canadian technology company that hasdeveloped a state-of-the-art DLT protocol, providing the foundationfor the next generation of encrypted and distributed networks. Thanksto its high level of sophistication, ZeU’s technology maximizestransparency, security and scalability, as well as big datamanagement. ZeU’s strategy is to monetize DLT transactions indiverse sectors such as payment, gaming, data, and healthcare.
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