You should read the following discussion and analysis of our financial condition and business plan together with the “Summary Financial Data” and our financial statements and related notes contained elsewhere in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those described below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled “Risk Factors” included elsewhere in this prospectus. All amounts in this report are in we dollars, unless otherwise specified.


We are a communications software company. We believe that the right to privacy should not end the moment they click “send”. Our flagship product, DatChat Messenger & Private Social Network (the “Application”), is a mobile application that gives users the ability to communicate in complete privacy and protection.

The Application allows users to exercise control over their messages, even after they have been sent. Through the App, users can delete the messages they have sent, on their own device as well as on the recipient’s device. There is no fixed deadline within which they must exercise this choice. A user can choose at any time to delete a message they have previously sent to a recipient’s device.

The App also allows users to hide secret and encrypted messages behind a blanket, which messages can only be unlocked by the recipient and which are automatically destroyed after a fixed number of views or a fixed period of time. Users can decide how long their messages last on the recipient’s device. The app also includes a screenshot protection system, making it virtually impossible for the recipient to capture a message or image before it is destroyed. Additionally, users can delete entire conversations at any time, making it look like the conversation never happened.

The app integrates with iMessage, making private messages potentially available to hundreds of millions of users.

Recent Events

At July 28, 2021, the Company has filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company with the Secretary of State for State of nevada to carry out a one-to-two (1: 2) reverse stock split of the Company’s ordinary shares. Proportional adjustments for the Reverse Stock Split have been made on the Company’s outstanding stock options, warrants and stock-based incentive plans. All data and amounts per share and per share have been adjusted retroactively from the first period presented in the unaudited condensed consolidated financial statements to reflect the Reverse Stock Split.

At August 17, 2021, the Company completed its initial public offering (“IPO”), in which we issued 3,325,301 common shares and Series A warrants (the “Series A warrants”) to purchase up to 3,325,301 common shares for gross proceeds of approximately $ 13,800,000.

Basis of Presentation

The financial statements contained in this document have been prepared in accordance with generally accepted accounting principles in United States of America (the “we GAAP “) and the requirements of Security and Trade Commission.

Critical accounting policies and significant judgments and estimates

This MD&A and the analysis of the financial condition and results of operations are based on our financial statements, which have been prepared in accordance with we GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of income and expenses as of the date of the financial statements. during the period under review. According to we GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. Although our significant accounting policies are described in more detail in Note 1 of the “Notes to Financial Statements”, we believe that the following accounting policies are essential to the process of judging and making significant estimates in the preparation of our statements. financial.


Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles in the we requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and related information at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. Significant estimates include the valuation of deferred tax assets and the value of stock-based compensation costs.

Revenue recognition

The Company will recognize revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers, which requires that revenue be recognized in a manner that describes the transfer of goods or services to customers for amounts that reflect the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company will further analyze its revenue recognition policy when entering into revenue-generating customer contracts.

Stock-based compensation

Stock-based compensation is recognized based on the subject’s requirements on stock-based payments of ASC 718, “Compensation – Stock-based compensation” (“ASC 718”), which requires recognition in financial statements of the cost of employees, not the services of employees and directors received in exchange for a grant of equity instruments during the period in which the employee, non-employee or director is required to provide the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires the valuation of the cost of employee, non-employee and director services received in exchange for an award based on the fair value at the grant date of the grant.


The Company follows ASC Topic 842, Leases (Topic 842) and applies the set of practical expedients, which allow it not to re-evaluate under the new standard its previous conclusions on the identification of leases, classification of leases and upfront direct costs. In addition, the Company has chosen not to apply ASC Topic 842 to agreements with leases of 12 months or less. The assets of the right to use operating leases (“ROU”) represent the right to use the leased asset during the term of the lease and operating lease debts are recognized on the basis of the current value of the leases. future minimum lease payments over the term of the lease on the start date. As most leases do not provide for an implied rate, the Company uses a differential borrowing rate based on the information available at the date of adoption to determine the present value of future payments. Lease costs for minimum lease payments are amortized on a straight-line basis over the term of the lease and are included in general and administrative expenses in the income statements.

Capital Expenditures

We have no contractual obligations for ongoing capital expenditures at this time. However, we purchase the equipment and software necessary to conduct our operations as needed.

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