Himalaya Technologies, Inc. (HMLA) reported an accumulated deficit of $8,275,826 on April 30, 2023, in its most recent quarterly report. The company also had negative working capital of $1,007,963 during the same period, and operating losses of $233,763 and $85,069 for the nine months ended April 30, 2023, respectively.
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Raising Capital
Due to the substantial losses, the company has primarily financed its operations through the issuance of common stock, loans from related parties, and loans from third parties. To further fund its operations in the next 12 months, the company will need to raise additional capital through offerings of debt or equity securities.
However, there are no arrangements in place for other offerings or any guarantee that financing would be forthcoming, resulting in potential substantial dilution for existing investors. As a result, the board has substantial doubt about the company’s ability to continue as a going concern without significant capital infusion.
Previous Acquisitions
In the previous financial year, Himalaya acquired 100% interest in KANAB CORP., a cannabis information services company, by issuing 300,000 shares of Class B preferred stock. The company accounted for the acquisition as an acquisition under common control, recorded at cost. KANAB CORP. is currently developing a website targeting health and wellness products and services in the cannabis market, with plans to generate revenues through advertising and subscriptions.
Dividends and Interest
In terms of dividends and interest, the company recognized deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements or tax returns. Deferred income taxes are recognized for the differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Risks
Furthermore, the company faced risks associated with competition, financing, liquidity requirements, rapidly changing customer requirements, limited operating history, and the volatility of public markets.
Future Prospects
Moving forward, the company’s ability to continue its operations largely depends on its success in raising additional capital, managing costs, and generating revenues. Achieving these goals would help Himalaya Technologies weather financial challenges and continue to build a sustainable business in the future.
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