GHST World Inc., a company specializing in innovative sports technology and clean energy solutions, has released its Form 10-K report for the fiscal year ended June 30, 2023. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces as it continues to develop its flagship product, the Smart Shin Guard, and other ventures.
Financial Highlights
- Revenue: Nominal revenue in the fiscal year ended June 30, 2023, and none in the fiscal year ended June 30, 2022. The company does not expect to generate material revenue until it can implement its business plan and begin marketing and selling its products in sufficient quantities.
- Net Income: Net loss of $116,574 for the fiscal year ended June 30, 2023, compared to a net loss of $3,987,027 for the fiscal year ended June 30, 2022. The FY 2022 net loss included a non-cash expense from the issuance of shares below fair market value and a $151,181 impairment of long-lived assets.
- Net Cash used by Operating Activities: $93,308 for the fiscal year ended June 30, 2023, compared to $163,028 for the fiscal year ended June 30, 2022. The decrease was primarily due to deferred revenue and a loss on debts conversion.
- Cash Flows from Financing Activities: $132,596 for the fiscal year ended June 30, 2023, compared to $155,884 for the fiscal year ended June 30, 2022. The decrease was primarily related to a reduction in advances from related parties year-over-year.
Business Highlights
- Smart Shin Guard Development: The company has completed Beta testing of the Smart Shin Guard and is now in the industrial development phase. The development phase is expected to conclude by the end of 2023, with manufacturing and sales to follow. The product targets non-professional players and teams globally, particularly in Europe. The Smart Shin Guard is designed to collect and analyze various performance metrics and will be complemented by a smartphone application.
- Intellectual Property and Patents: GHST World Inc. has acquired multiple patents for its Smart Shin Guard technology in the U.S., Europe, and Hong Kong (subsequently abandoned). These patents allow for potential expansion of the technology to other forms of athletic equipment beyond soccer shin guards.
- Subsidiary Operations: GHST World Inc. operates several subsidiaries focused on sports technology, Internet of Things (IoT), clean energy infrastructure, and art trading platforms. These subsidiaries are in early development stages but represent potential future revenue streams.
- Clean Energy Initiatives: InSSIDe World Inc., a subsidiary of GHST World Inc., plans to install 100 MW of solar energy capacity over two years. The company has secured four solar energy production plants totaling eight megawatts (MW) of energy.
- Market Competition: GHST World Inc. faces competition from established sports equipment companies and technology providers offering similar wearable devices. Competitors include Soccerment, TibTop, and Catapult Sports.
- Future Outlook: The company plans to complete the development of its Smart Shin Guard by the end of 2023 and focus on marketing efforts targeting European markets. It aims to secure strategic partnerships with professional teams or athletes to enhance marketing efforts and expand its product offerings globally.
- Operational Challenges: The company faces challenges related to limited capital resources, which have delayed product development timelines. Raising additional capital is crucial for supporting operations over the next 12 months.
- Management Structure: The company's management and directors are based in Italy and other European countries, providing strategic advantages for initiating marketing strategies in European markets where soccer is highly popular.
- Product Development Agreements: In 2021, GHST World Inc. entered into agreements with independent contractors for developing prototype software for the Smart Shin Guard. These agreements have been completed, and a joint venture with cross-ING aims to further develop the product's AI capabilities.
- Strategic Partnerships: GHST World Inc. has entered into a joint venture agreement with cross-ING to enhance the Smart Shin Guard's software capabilities and explore applications in other sports.
- Product Offerings: GHST World Inc. plans to offer two versions of the Smart Shin Guard: a Consumer Kit for casual players and a Professional Kit for advanced users.
- Headquarters Location: While headquartered in New York, NY, GHST World Inc.'s directors and officers are located in Italy and other European countries.
- Regulatory Approvals Needed: Obtaining approval for in-game use of the Smart Shin Guard from major soccer leagues is crucial for market success among professional teams and players.
Strategic Initiatives
- Strategic Initiatives: The company is focused on developing and marketing the Smart Shin Guard, with efforts to expand operations and market the product internationally. This includes obtaining patents in various jurisdictions and establishing strategic partnerships with soccer leagues and teams.
- Capital Management: The company has been relying on loans and stock purchases from current investors and related parties to fund operations. It has approximately $12,000 in available cash as of October 12, 2023, and has expressed substantial doubt about its ability to continue as a going concern without raising additional capital.
- Future Outlook: The company plans to raise at least $300,000 to meet working capital needs for the next 12 months. It intends to phase in expenses and grow the business as working capital becomes available. The company is monitoring macro-economic factors such as inflationary pressures and interest rate hikes, which may affect its ability to raise funding.
Challenges and Risks
- Supply Chain Risks: The company's reliance on a single supplier for key raw materials presents a significant risk as any disruption could adversely affect production and sales.
- Product Development Risks: The company is in the early stages of developing its Smart Shin Guard and other business ventures, which introduces uncertainty and potential delays in achieving profitability.
- Diversification Risks: Dependency on a single product limits diversification and increases vulnerability to market changes.
- Financial Risks: The lack of an active market for its securities and potential dilution from future capital raises pose financial risks.
- Competitive Pressures: The company faces competition from established firms with greater resources, which could hinder market entry and growth.
- Regulatory Risks: Obtaining league approvals for in-game use of the Smart Shin Guard is critical for its success in professional markets.
- Market Risks: Exposure to economic downturns, fluctuations in demand for non-essential products like the Smart Shin Guard, and foreign currency exchange rate fluctuations could adversely affect financial results and operational stability.
SEC Filing: