10-Q: Himalaya Technologies Reports Q3 2024 Results: Focus Shifts to Social Media and Beverage Development Amidst Ongoing Losses

Himalaya Technologies, Inc. reports its Q3 2024 results, highlighting a strategic shift towards social media and beverage development while navigating ongoing financial losses and operational changes.

Summary

• Himalaya Technologies, Inc. released its financial results for the quarter ended April 30, 2024.
• The company reported no operating revenue for both the three and nine months ended April 30, 2024 and 2023.
• The net loss for the three months ended April 30, 2024, was $483,314, compared to a net income of $195,942 for the same period in 2023.
• The net loss for the nine months ended April 30, 2024, was $947,681, compared to a net loss of $216,350 for the same period in 2023.
• Operating expenses for the three months ended April 30, 2024, totaled $323,623, primarily due to stock-based compensation and research and development costs.
• Operating expenses for the nine months ended April 30, 2024, totaled $682,994, mainly driven by non-cash stock-based compensation of $391,171 and accrued compensation expense of $235,447.
• The company's business plan includes completing a mainstream social site Goccha!, developing additional social networks, launching a FOMO healthy energy drink, launching its ERC20 EVEREST crypto token, and developing and funding Web3 platform businesses.
• The company had a cash balance of $100 and negative working capital of $820,961 as of April 30, 2024.
• The company is pursuing additional funding resources to maintain its current and planned operations.
• The company's third-party loan of $140,100 from GS Capital Partners is currently in default, and the company is in negotiations to restructure the note.
• Subsequent to April 30, 2024, there were several changes in management and business relationships, including the appointment of Ryan Nguyen as CEO and the resignation of Vikram Grover as CEO, Treasurer, and Director.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the company's significant losses, low cash balance, and dependence on future financing. However, the company is attempting to diversify its business plan and restructure its debt, which could improve its financial situation in the future.

Positives

• The company is actively pursuing additional funding to support its operations.
• Himalaya Technologies is diversifying its business plan to include social media, beverage development, and Web3 platforms.
• The company is attempting to restructure its defaulted loan with GS Capital Partners.
• The company appointed Ron Zilkowski, CPA, MBA, Debbie Wildrick, Charles Nahabedian and David Burns, PhD to its Advisory Board.
• The company is developing a FOMO healthy energy drink under notice of allowance for trademark by the USPTO.

Negatives

• The company reported no operating revenue for the periods ended April 30, 2024 and 2023.
• The company experienced significant net losses for both the three and nine months ended April 30, 2024.
• The company has a very low cash balance of $100 and negative working capital of $820,961 as of April 30, 2024.
• A $140,100 loan from GS Capital Partners is currently in default.
• The company's disclosure controls and procedures are not effective in timely alerting them to material information.
• The company has been named in business lawsuits by Swift Funding Source Inc. and Globex Funding LLC.

Risks

• The company's ability to continue as a going concern is uncertain without a significant infusion of capital.
• The company is dependent on future debt or equity investments to sustain its operations and implement its business plan.
• There is no assurance that additional financing will be available when needed or on acceptable terms.
• The company's third-party loan from GS Capital Partners is in default, and negotiations for restructuring may not be successful.
• The company's business plan includes completing a mainstream social site Goccha! to compete with mainstream social networks and benefit from potential disruption to the market caused by the Federal government planned ban on TikTok, which may not occur.
• The company has been named in a business lawsuit by Swift Funding Source Inc. and Globex Funding LLC.

Future Outlook

The company expects expenses to continue increasing and does not anticipate generating revenues from operations for another 12 months, relying on future debt or equity investments to sustain operations.

Management Comments

• Mr. Grover agreed to a change of control hiring Ryan Nguyen as CEO and appointing him Director, resigned his positions as CEO, Treasurer, and Director, and agreed to assign his Series C Preferred shares to Inov8 Agency, Inc. or their assignees to position the Company for growth.

Industry Context

The company is attempting to pivot to social media and beverage development, potentially capitalizing on market disruption in the social media space and the growing demand for healthy energy drinks. The company is also developing and funding Web3 platform businesses.

Comparison to Industry Standards

• It is difficult to compare Himalaya Technologies to industry standards due to its diverse business plan and lack of revenue.
• The company's shift to social media could be compared to companies like Facebook or Twitter, but it is still in the early stages of development.
• The company's beverage development could be compared to companies like Celsius Holdings, Inc. or National Beverage Corp., but it has yet to launch its product.
• The company's Web3 platform businesses could be compared to companies like Coinbase or Binance, but it is still in the early stages of development.

Management Changes

Legal Proceedings

• The company has been named in a business lawsuit by Swift Funding Source Inc. seeking monies owed, fees and penalties of $149,837.85 in the State of New York.
• The company has been named in a business lawsuit by Globex Funding LLC seeking monies owed, fees and penalties of $161,631.25 in the State of New York.

Related Party Transactions

• On June 28, 2021, the Company received a loan of $25,000, subsequently amended to a credit line of $100,000, from FOMO WORLWIDE, INC. (FOMO), a related party.
• On May 10, 2023, the Company sold 100% of Everest Networks, Inc. (formerly KANAB CORP) from Himalaya for partial forgiveness of $17,017 loaned to the business on June 28, 2021 and as amended on November 9, 2021 and September 1, 2022.
• On January 21, 2024, the Company issued a zero interest bearing convertible note of $2,945 to the Companys CEO for expenses incurred.

Stakeholder Impact

• Shareholders face potential dilution from future equity offerings.
• Employees may experience uncertainty due to the company's financial instability and management changes.
• Customers may be impacted by the company's shift in business focus and potential changes in product offerings.
• Suppliers and creditors face increased risk due to the company's financial difficulties and potential default on obligations.

Next Steps

• The company intends to file with FINRA for review of its corporate action in near future.
• The company is pursuing additional funding resources to maintain its current and planned operations.
• The company is in negotiations to restructure its defaulted loan with GS Capital Partners.
• The company plans on filing past returns and related 1099 filings for compensation paid to prior management, employees, consultants, contractors, and affiliates.

Key Dates

Keywords

financial results, social media, beverage development, Himalaya Technologies, net loss, operating revenue, funding, default, Goccha!, FOMO, Web3