10-K: Business Warrior Corp. Files 10-K, Reports Revenue Growth and Strategic Shift to Lending Solutions

Business Warrior Corporation's 10-K filing reveals a strategic shift towards becoming a disruptor in the lending industry, leveraging its PayPlan platform and marketing services.

Summary

• Business Warrior Corporation, formerly Kading Companies, has filed its annual report on Form 10-K for the fiscal year ended August 31, 2023.
• The company has strategically shifted its focus to the lending industry, integrating its SaaS lending technology, PayPlan, with marketing services.
• PayPlan is a cloud-based platform that streamlines the lending experience for lenders of all sizes, offering loan origination, decision-making, and loan management tools.
• The company's revenue increased to $4,297,122 in 2023 from $3,710,370 in 2022, with cost of sales increasing to $3,110,737 from $1,253,649.
• Operating expenses decreased to $4,143,270 in 2023 from $6,272,413 in 2022, primarily due to reduced advertising, administrative, and salary costs.
• The company reported a net loss of $(5,298,196) for 2023, compared to a net loss of $(7,591,250) in 2022.
• Total current assets decreased to $510,939 from $1,011,896, while total current liabilities increased to $6,264,834 from $3,021,749.
• The company has a working capital deficiency of $(5,753,895) and an accumulated deficit of $16,663,133.
• Business Warrior is dependent on future financing from convertible debt, promissory notes, and stock sales to fund operations.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 3

Explanation: The document highlights some positive developments, such as revenue growth and reduced operating expenses, but the significant working capital deficiency, accumulated deficit, dependence on external financing, and the auditor's going concern warning create a negative outlook.

Positives

• The company experienced revenue growth year-over-year.
• Operating expenses were significantly reduced year-over-year.
• The net loss improved year-over-year.
• The company has developed a comprehensive lending platform, PayPlan, with a modular subscription model.
• The acquisition of Helix House provides in-house marketing capabilities.
• The acquisition of Alchemy provides proprietary lending software technology.
• The company has a clear focus on the lending industry and a strategy to disrupt it.

Negatives

• The company has a significant working capital deficiency.
• The company has a large accumulated deficit.
• The company is dependent on external financing to continue operations.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern.
• The company has a high cost of sales due to digital advertising costs.
• The company has a contract liability of $2,755,478 as of August 31, 2023.
• The company has a derivative liability of $325,246 as of August 31, 2023.

Risks

• The company's ability to continue as a going concern is uncertain due to its financial condition.
• The company is dependent on external financing, which may not be available.
• The company faces competition in the lending technology and marketing industries.
• The company's success depends on the adoption and profitability of its PayPlan platform.
• The company has a contract liability that is currently in dispute.
• The company has a derivative liability that is subject to market fluctuations.
• The company has material weaknesses in its internal controls over financial reporting.

Future Outlook

The company expects to incur further losses in the development of its business and is dependent on future financing to sustain operations. The company is focused on growing its PayPlan platform and expanding its lender marketing services.

Management Comments

• The previous Bluume team took over all operations of the company and formed a new business plan, which replaced all former plans of the previous management team at Kading Companies.
• Business Warrior, evolving from its origins as Bluume along with the strategic acquisition of Helix House and Alchemy, sharpened its focus to be a disruptor in the lending industry.
• We continually enhance our software-as-a-service (SaaS) platform to improve businesses ability to make decisions that will lead to more customers, increase revenues, obtain access to growth capital, and build a professional legacy for themselves and their families.
• Our entire organization is focused on our performance metrics to assure that we generate revenue for every dollar spent and that our revenue model is profitable long-term.

Industry Context

The company operates in the software, business analytics, lending, and digital advertising industries. The global digital lending platform market is valued at approximately USD 8.58 billion and is anticipated to grow at a compound annual growth rate (CAGR) of 26.5% to reach about USD 44.50 billion by 2030. The company is attempting to combine these disparate industries for the benefit of lenders.

Comparison to Industry Standards

• While LoanPro, Turnkey Lender, and Lendflo offer robust loan management and lending platforms, Business Warrior differentiates itself by providing vastly improved onboarding experiences along with comprehensive marketing tools and strategies.
• The premium marketing services that we offer through our subsidiary, Helix House, competes with national and local digital marketing agencies such as KlientBoost, OpenMoves, WebFX, Zoek, and SmartSites.
• Business Warrior is unique in its modular subscription based for an end-to-end lending solution; including Business Warriors offering of a decision engine related to credit.
• Lender specific marketing agencies are far and few between in the industry.

Legal Proceedings

• The Company settled Case No. CV2020-050103, brought in the Arizona Superior Court in and for Maricopa County, agreeing to pay the plaintiff $325,000.00 and to deliver 7,500,000 shares of Company common stock.
• The Company filed a complaint against Timothy Li, alleging breach of fiduciary duty, fraudulent concealment, civil theft, breach of duty of loyalty, and unfair competition in connection with the acquisition of FluidFi Inc.
• MBOCAL and JKB Financial Inc. filed a lawsuit against FluidFi and two of the Company's subsidiaries regarding a contract entered into by FluidFi prior to the Company's acquisition of FluidFi.
• Business Warrior Corporation was named in a lawsuit filed by Adam Spencer, ELEV8 Advisors Group LLC, EVRGRN Industries LLC, and derivatively on behalf of Business Warrior, alleging various causes of action related to the Company's prior disclosed agreements with EVRGRN and ELEV8.

Related Party Transactions

• Amounts due to related parties were $210,667 and $159,161 as of August 31, 2023 and 2022, respectively.
• The company has an employment agreement with Jason Doolittle, the brother of the CEO, who is paid $12,000 per month plus expenses to build and manage the PayPlan product solution.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial instability and dependence on external financing.
• Employees may be impacted by potential cost-cutting measures or restructuring due to the company's financial challenges.
• Customers may be affected by the company's ability to deliver its products and services if it faces financial difficulties.
• Creditors face the risk of non-payment due to the company's financial instability.

Next Steps

• The company will continue to develop and market its PayPlan platform.
• The company will focus on acquiring new customers through online advertising and channel partners.
• The company will monitor its performance metrics, including CPA, COR, and ARPU.
• The company will seek additional financing to fund its operations.

Key Dates

Keywords

lending, PayPlan, SaaS, marketing, fintech, loan origination, digital marketing, software, Helix House, Alchemy, financial technology