What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-05-16 · 113 added, 184 removed, 198 unchanged (60% of the section changed)

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assumptions described in this report underlying or relating to any forward-looking statements.

references to “Waterside”, “we”, “our,” “us” and the “Company” in this Item

2 refer to Waterside Capital Corporation.

references to “Metavesco”, “we”, “our,” “us” and the “Company” in this Item

2 refer to Metavesco, Inc..

discussion in this section contains forward-looking statements.

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contained herein to reflect future events and developments, except as required by law.

following discussion of the results of operations for the three and nine months ended March 31, 2022 and 2021, respectively, should

be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this

Quarterly Report on Form 10-Q.

Our discussion includes forward-looking statements based upon current expectations that involve risks

and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially

from those anticipated in these forward-looking statements because of a number of factors.

An investment in our common stock involves

a high degree of risk.

Readers of this Quarterly Report on Form 10-Q should carefully consider the risks set forth in the Risk Factors

and Business sections of our Annual Report on Form 10-K for the year ended June 30, 2021, filed with the SEC on September 1, 2021.

management has compiled the forward-looking statements specified in the following information based on assumptions made by management

and considered by management to be reasonable.

Our future operating results, however, are impossible to predict and no representation,

guaranty, or warranty is to be inferred from those forward-looking statements.

following discussion of the results of operations for the three months ended September 30, 2022 and 2021, respectively, should be read

in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly

Report on Form 10-Q.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties,

such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially from those

anticipated in these forward-looking statements because of a number of factors.

An investment in our common stock involves a high degree

Readers of this Quarterly Report on Form 10-Q should carefully consider the risks set forth in the Risk Factors and Business

sections of our Annual Report on Form 10-K for the year ended June 30, 2021, filed with the SEC on September 1, 2021.

Our management

has compiled the forward-looking statements specified in the following information based on assumptions made by management and considered

by management to be reasonable.

Our future operating results, however, are impossible to predict and no representation, guaranty, or

warranty is to be inferred from those forward-looking statements.

assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future

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& Management Plans

Company was formed in the Commonwealth of Virginia on July 13, 1993 and was a closed-end investment company licensed by the SBA as an

The Company previously made equity investments in and provided loans to, small businesses to finance their growth, expansion, and

Under applicable SBA regulations, the Company was restricted to investing only in qualified small businesses as contemplated

by the Small Business Investment Act of 1958.

As a registered investment company under the Investment Company Act, the Company’s

investment objective was to provide its shareholders with a high level of income, with capital appreciation as a secondary objective.

The Company made its first investment in a small business in October 1996.

May 2014, the Company effectively ceased operations.

The Company consented to a court order appointing the SBA as receiver of the Company

to marshal and liquidate in an orderly manner all of the Company’s assets.

That order also entered judgment in favor of the United

States of America, on behalf of the SBA, against the Company in the amount of $11,770,722.

The SBA was appointed receiver effective May

the course of the Receivership, the activity of the Company was limited to the liquidation of the Company’s assets by the receiver

and the payment of the proceeds therefrom to the SBA and for the expenses of the Receivership.

The SBIC license granted to the Company

by the SBA was revoked by the SBA effective March 20, 2017.

On June 28, 2017, the Receivership was terminated.

The Final Order specifically

stated that “Control of Waterside shall be unconditionally transferred and returned to its shareholders c/o Roran Capital, LLC

(“Roran”) upon notification of entry of this Order.

termination of the Receivership, Roran took possession of all books and records made available to it by the SBA.

With no assets and no

SBIC license from the SBA, no income, and liabilities, at that time, in excess of $10,000,000, it became clear to the Company that continuing

to operate as a registered investment company was impossible.

The Company and Roran entered into a Convertible Loan Agreement on September

19, 2017, as amended, to fund the Company’s expenses while it sought a new business to undertake or to merge with an existing business.

The New Board has continued to work toward achieving that goal.

April 22, 2020, the SEC issued an order under Section 8(t) of the Investment Company Act 1940, as amended, declaring that the Company

has ceased to be an investment company.

As a result, the Company is now a reporting company under the Securities Exchange Act

of 1934, as amended.

September 2, 2021, the Company entered into a Stock Purchase Agreement (the “SPA”) by and between (i) the Company (ii) Ryan

Schadel (“Buyer”) and (iii) Roran Capital, LLC (“Roran”).

Roran agreed to sell to the Buyer 4,247,666 shares

of common stock of the Company held by Roran for a total purchase price of $385,000.

In conjunction with the SPA, Roran agreed to forgive

all amounts due to Roran by the Company totaling $207,644 which is comprised of convertible note payable – related party, accrued

interest payable – related party and advances from related party.

The Buyer acquired 4,247,666 shares of the Company’s Common

Stock, representing 69.7% of the issued and outstanding shares of Common Stock.

As such, the Schadel SPA resulted in a change of control

of the Company.

March 2022, the Company commenced operations as a web3 enterprise.

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exchanges such as Uniswap.

Additionally, the Company farms tokens via Proof-of-Stake (“PoS”) protocols on decentralized

exchanges, as well as centralized exchanges, including Coinbase.

The Company also invests in non-fungible token (“NFT”)

projects and virtual land that it believes are promising, primarily on EVM protocols.

Company has three areas on which it will focus:

Provider - In decentralized finance (DeFi), the ability to trade assets from one to another is facilitated by Liquidity Pools (“LPs”)

which generally contain a 50/50 balance between both underlying tokens.

The Company expects to invest substantially in LPs to

generate ongoing revenue.

Additionally, the Company farms tokens via Proof-of-Stake (“PoS”) protocols on decentralized exchanges,

as well as centralized exchanges, including Coinbase.

Yield farmers provide liquidity to various token pairs and earn rewards in cryptocurrencies.

The Company also invests in non-fungible token (“NFT”) projects and virtual land that it believes are promising, primarily

on Ethereum Virtual Machine (“EVM”) protocols.

includes many different technologies but is generally defined as the use of internet protocols incentivized with token-based rewards

built on top of open source, decentralized and distributed systems.

Examples of web3 technologies include blockchain networks, cryptocurrencies,

NFT’s and smart contracts.

Company primarily invests in NFT collections from Yuga Labs which includes the Mutant Ape Yacht Club and the metaverse platform, Otherside.

is a computation engine that facilitates the deployment and operation of smart contracts.

Company has four areas of focus:

Provider - In decentralized finance (“DeFi”), the ability to trade assets from one to another is facilitated by Liquidity

Pools (“LPs”) which generally contain a 50/50 balance between both underlying tokens.

The Company expects to invest substantially

in LPs to generate ongoing revenue.

The Company earns income based on a percentage of the value of each trade for providing liquidity.

We expect that this revenue will fuel our other initiatives as we build the Company.

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This is a much greener approach to the traditional

Proof of Work model, which is used by Bitcoin and Ethereum.

Ethereum 2.0 is expected to be on PoS in the near future and our goal

is to eventually become a validator on the network.

- The Company intends to build a world-class NFT project research team that will guide the strategic investments for the overall

We anticipate that our portfolio will contain digital assets known as NFTs, including digital real estate in multiple metaverse

platforms such as The Sandbox and Otherside.

These assets are expected to be used for licensing and royalty income.

NFT assets have multiple

use cases, in addition to the potential appreciation in the underlying digital asset.

We believe that we can harness the power

of acquired assets through the metaverse to grow our portfolio faster and stronger than traditional asset acquisitions typically allow.

Proof of Work model, which is used by Bitcoin.

- The Company holds NFTs for capital appreciation and for potential income from IP licensing.

Mining Operations

August 29, 2022, the Company announced its plan to begin bitcoin mining operations.

Bitcoin mining has been part of the Company roadmap

since entering the web3 space in March of 2022, although our plans have been accelerated with the recent decrease in the price of Bitcoin.

Mining equipment has become much more affordable as overleveraged miners are forced to sell equipment at reduced prices.

In August 2022,

the Company began its Bitcoin mining operations by purchasing cryptocurrency mining machines and arranging hosting space in Texas.

anticipate the Company will eventually open a second site in Georgia.

Accounting Policies

Accounting Policies and Significant Judgments and Estimates

management’s discussion and analysis of our financial condition and results of operations are based on our unaudited financial

statements which we have been prepared in accordance with the U.S.

management’s discussion and analysis of our financial condition and results of operations are based on our financial statements

which we have been prepared in accordance with the U.S.

generally accepted accounting principles (“GAAP”).

In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and

liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

revenues and expenses during the reporting periods.

In preparing our

financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the

disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting periods.

accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment

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results could differ from those estimates.

our significant accounting policies are described in more detail in Note 2 to our unaudited financial statements included

in this Quarterly Report, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation

of our unaudited financial statements:

our significant accounting policies are described in more detail in Note 2 to our financial statements included in this Annual Report,

we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements:

as a Going Concern

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fair value is being measured.

Cryptocurrencies

are subject to impairment losses if the fair value a cryptocurrency decreases below the carrying value at any time during the

The fair value is measured using the quoted price in the principal market of the cryptocurrency.

The Company currently

obtains the quoted price of cryptocurrency from www.coinmarketcap.com .

Liquidity pool tokens and non-fungible tokens are

subject to impairment losses if the fair value a token decreases below the carrying value at the end of each quarterly accounting

Impairment for tokens is assessed quarterly due to each token being a unique asset and due to the illiquid markets in which

these tokens trade.

The Company is continuously reviewing available markets and information and its methodology when determining the

fair value of tokens.

The Company currently reviews quoted prices of its tokens and comparable tokens at https://uniswap.org/

are subject to impairment losses if the fair value a tokens decreases below the carrying value at any time during the period.

value is measured using the quoted price in the principal market of the tokens.

The Company currently obtains the quoted price of tokens

from www.cryptocompare.com .

pool tokens and non-fungible tokens are subject to impairment losses if the fair value a token decreases below the carrying value at

the end of each quarterly accounting period.

The fair value of liquidity pool tokens is based on the quoted price on the last day of

the quarter at 4PM Eastern Time.

The fair value of NFTs is based on the average trading price on the last day of each quarter.

for liquidity pool tokens and non-fungible tokens is assessed quarterly due to each token being a unique asset and due to the illiquid

markets in which these tokens trade.

The Company is continuously reviewing available markets and information and its methodology when

determining the fair value of digital assets.

Company currently reviews quoted prices of its liquidity pool tokens, non-fungible tokens and comparable tokens at https://uniswap.org/

and https://opensea.io .

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over a price range.

Company earns rewards for agreeing to lock up tokens for a fixed period of time to participate in running the blockchain and maintaining

Rewards are typically calculated in percentage yields.

Conversion Feature

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paragraph 820-10-35-37 of the ASC (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.

Paragraph 820-10-35-37 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements.

To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair

value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.

(3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

820-10-35-37 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements.

consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy

which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.

The three (3) levels of

fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

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and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.

of Three Months Ended March 31, 2022 and 2021

of Three Months Ended September 30, 2022 and 2021

March 2022, the Company commenced operations as a web3 enterprise and purchasing digital assets.

Revenue for the three months ended March

31, 2022 was derived from airdrops and liquidity pool fees of $17,439 and $22,772, respectively.

Revenue for the three months ended September

30, 2022 and 2021 was derived liquidity pool fees of $40,430 and $0, respectively.

business plan includes earning income from liquidity fees and staking .

Airdrop revenue represents APE coin awards received as a result

of holding the Mutant Ape Yacht Club NFT.

Airdrop revenue

is generally a one-time award and the Company does not have expectations of further airdrop revenue.

The Company seeks higher returns

from liquidity pool fees by selecting pairs with higher risk and good volumes.

Administrative

The Company seeks higher returns from liquidity pool fees by selecting pairs with higher risk and good volumes.

high trade volume is due to adjusting parameters on our liquidity pools.

Each trade generates a realized gain or loss.

Administrative

expenses totaled $34,833 and $6,764 for the three months ended March 31, 2022 and 2021, respectively.

These expenses are primarily costs

related to keeping the Company current in its SEC filings and costs incurred for legal expenses related to the issuance of Series A Convertible

Preferred Stock.

expense totaled $1,294 and $7,560 for the three months ended March 31, 2022 and 2021, respectively.

The decrease in interest expense

is due to the settlement of the convertible note payable.

of Digital Assets Held

of digital assets held totaled $51,983 and $0 for the three months ended March 31, 2022 and 2021, respectively.

Digital assets are accounted

for as intangible assets are subject to impairment losses if the fair value of digital assets decreases below the carrying value at any

time during the period.

Subsequent reversal of impairment losses is not permitted.

We will not recognize any increases in the fair value

of digital assets held until a gain is recognized on sale.

Gain (Loss) on Sales/ Exchange Digital Assets Held

generally do not seek to earn income from actively trading digital asset held.

We will dispose of assets in circumstances when there

is a significant increase in the fair value of an asset or when holding an asset is no longer consistent with our business plan.

reported a net loss of $15,380 and $14,324 during the three months ended March 31, 2022 and 2021, respectively.

Any increase in revenue

and gains on sales of digital assets was offset by an increase in administrative and impairment expenses.

of Nine Months Ended March 31, 2022 and 2021

March 2022, the Company commenced operations as a web3 enterprise and purchasing digital assets.

Revenue for the nine months ended March

31, 2022 was derived from airdrops and liquidity pool fees of $17,439 and $22,772, respectively.

business plan includes earning income from liquidity fees and staking.

Airdrop revenue represents APE coin awards received as a result

of holding the Mutant Ape Yacht Club NFT.

Airdrop revenue

is generally a one-time award and the Company does not have expectations of airdrop further revenue.

The Company seeks higher returns

from liquidity pool fees by selecting pairs with higher risk and good volumes.

Administrative

fees totaled $88,840 and $51,905 for the nine months ended March 31, 2022 and 2021, respectively.

These expenses are primarily costs

related to keeping the Company current in its SEC filings and costs incurred for legal expenses related to conversion from a Virginia

corporation to a Nevada corporation, amendments to the amended and restated articles of incorporation and the issuance of Series A Convertible

Preferred Stock.

expense totaled $1,294 and $36,353 for the nine months ended March 31, 2022 and 2021, respectively.

The decrease in interest expense

is due to the settlement of the convertible note payable.

expenses totaled $125,010 and $21,825 for the three months ended September 30, 2022 and 2021, respectively.

These expenses are primarily

costs related to accounting, audit, legal and investor relations.

expense totaled $23,542 and $2,997 for the three months ended September 30, 2022 and 2021, respectively.

The increase in interest expense

is due to amortization of debt discount and accrued interest on new promissory notes and new convertible promissory notes issued since

October 2021.

of Digital Assets Held

of digital assets held totaled $51,983 and $0 for the nine months ended March 31, 2022 and 2021, respectively.

Digital assets are accounted

for as intangible assets are subject to impairment losses if the fair value of digital assets decreases below the carrying value at any

time during the period.

of digital assets held totaled $25,299 and $0 for the three months ended September 30, 2022 and 2021, respectively.

Digital assets are

accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases below the carrying

value at any time during the period.

Subsequent reversal of impairment losses is not permitted.

We will not recognize any increases in the fair value

of digital assets held until a gain is recognized on sale.

We will not recognize any increases in

the fair value of digital assets held until a gain is recognized on sale.

Impairment losses are a non-cash expense.

Gain (Loss) on Sales/ Exchange Digital Assets Held

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is a significant increase in the fair value of an asset or when holding an asset is no longer consistent with our business plan.

reported a net loss of $69,387 and $88,258 during the nine months ended March 31, 2022 and 2021, respectively.

reported a net loss of $58,311 and $24,822 during the three months ended September 30, 2022 and 2021, respectively.

Any increase in revenue

and gains on sales of digital assets was offset by an increase in administrative and impairment expenses.

and realized gain on sales/ exchange on digital assets held was offset by an increase in administrative, interest and impairment expenses.

losses were primarily due to a broad deterioration of the crypto-currency market.

and Capital Resources

have incurred recurring operating losses and negative operating cash flows through March 31, 2022, and we expect to continue to incur

have incurred recurring operating losses and negative operating cash flows through September 30, 2022, and we expect to continue to incur

losses and negative operating cash flows at least through the near future.

We have obtained $100,000 of funding by issuing a demand promissory

note on October 18, 2021 to Ryan Schadel, the Company’s Chief Executive Officer, sole director and majority stockholder, to meet

our most critical cash requirements.

The Company on October 18, 2021, issued to Ryan Schadel, the Company’s Chief Executive Officer,

sole director and majority stockholder, a demand promissory note for $100,000 in cash.

On March 16, 2022, the Company entered into Stock

Purchases Agreements whereby the Company issued 22 shares to Series A Convertible Preferred Stock and various Warrants for $1,100,000

At March 31, 2022, $95,854 of cash was in held at a financial institution and $400,673 was held at Coinbase, Inc.

expects over the next twelve months, cash held at a financial institution will be expended on professional fees, transfer agent, Edgar

agent and other administrative costs.

During the three months ended we have obtained $75,000 of

funding by issuing a demand promissory note and promissory note – related party to meet our most critical cash requirements.

September 30, 2022, $5,439 of cash was in held at a financial institution and $71 was held at Coinbase, Inc.

The Company expects over

the next twelve months, cash held at a financial institution will be expended on professional fees, transfer agent, Edgar agent and other

administrative costs.

The cash held at Coinbase Inc.

will be deployed to purchase digital assets to generate staking

rewards and liquidity pool fees.

will be deployed to purchase digital assets to generate staking rewards and liquidity

We hope to start paying some of our suppliers and contractors in digital assets in the coming months.

However, there can be no assurance we will be able to pay any of our suppliers and contractors in digital assets.

However, there can be

no assurance we will be able to pay any of our suppliers and contractors in digital assets.

August 22, 2022, the Company made a deposit of $72,095 with USDC to purchase 18 Antminer S19j Pro 100 TH Bitcoin mining machines.

a result of the aforementioned factors, management has concluded that there is substantial doubt about our ability to continue as a going

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doubt about our ability to continue as a going concern.

Our financial statements as of and for the period ended March 31, 2022, do not

contain any adjustments for this uncertainty.

In response to our Company’s cash needs, we raised funding as described in Note 4

and Note 6 to our unaudited financial statements.

Any additional amounts raised will be used for our future investing and operating

cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts of financing.

Our financial statements as of and for the year ended June 30, 2022, do not contain

any adjustments for this uncertainty.

In response to our Company’s cash needs, we raised funding as described in Note 5 and Note

6 to our financial statements.

Any additional amounts raised will be used for our future investing and operating cash flow needs.

there can be no assurance that we will be successful in raising additional amounts of financing.

Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis