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YoY shift: Lean +
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.50pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-
Not scored
Net-tone change vs last year's 10-K.
MD&A
+0.50pp
Lean +
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
restated+1
Positive rising
successes+1
gain+1
MD&A (Item 7)
2,434 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our audited financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors discussed elsewhere in this report.
Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues, gross margin and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity, and financing sources. This forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include those relating to our liquidity requirements, the continued growth of the Company’s industry, the success of our product development, marketing and sales activities, vigorous competition in the construction industry, dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global economic conditions, the inherent uncertainty and costs of prolonged arbitration or litigation, and changes in federal or state tax laws or the administration of such laws.
Overview
Electronic Servitor Publication Network Inc. was incorporated on May 17, 2017, under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company is a digital engagement company providing digital activation and engagement solutions to established and developing companies that seek to optimize their digital customer engagement strategies. The Company's managed services are powered by a proven, proprietary tech stack - the Digital Engagement Engine (or DE²). This technology provides intelligent interaction management, dynamic content provisioning, and a logic-driven workflow which creates digital experiences that accelerate an audience from awareness to action, no matter what programs and processes that the client already has in place.
The Company's corporate offices are located at 107 Chestnut St., Suite 100, Stillwater, MN 55082-5542. The Company's email website is http://www.xespn.com. The Company’s telephone number is (883) 991-0800.
The Company’s common stock trades on the OTCQB Venture Market under the stock ticker symbol XESP.
On September 28, 2021, the Certificate of Incorporation of the Company was amended to effect a change in the Company’s name from “CannAssist International Corp.” to “The Electronic Servitor Publication Network, Inc.” (the “Name Change”).
Effective October 9, 2021, as a result of the spin-off transactions, the business of the Company changed to focus on Electronic Sports Gaming technology and the development of related infrastructure, specifically the development and commercialization of a technology platform specifically designed for the Electronic Sports and Electronic Gaming markets. The platform will provide an omni-channel publishing tool, with talent identity protection and monetization tools provided in line with interaction and media creation services. Further publication and monetization products and services will be developed and acquired to support these efforts.
On November 20, 2022, the Board approved the Company’s amended and restated By-laws. On and after the effective date of the By-laws, the annual meeting of the Company’s stockholder, shall be held annually on a date and at a time, and via a format (in person, conference call, video conference etc.) designated by the board of directors and stated in a notice of the meeting. Prior to the amendment, the annual meeting was held on the third Thursday of May of each calendar year at 10:30 am. Pursuant to the amended and restated By-laws, notice of the meeting may now be served to stockholders by electronic transmission, upon receipt of confirmation. Further, notice for special meetings of the Company’s board of directors may now be given with no less than 24 hours by email or text, in addition to notice in person, by letter or telephone call. The Company’s officers, pursuant to the amended and restated By-laws will be comprised of a chief executive officer, a president, a chief operations officer, a chief financial officer, a secretary, a treasurer, a controller, and/or such other officers as may from time to time be elected or appointed by the board of directors. Consequently, new descriptions for the offices of chief operations officer and chief financial officer have been included to the By-laws under Sections 4.7 and 4.8, respectively. The amended and restated By-laws also include an indemnification provision to indemnify the Company’s officers and directors to the maximum extent and in the manner permitted by the General Corporation Law of Delaware.
On October 24, 2023, the Company’s Board adopted and approved amendment to the Company’s First Amended and Restated By-laws (the “Amendment”). In accordance with the Amendment, the annual and special meetings may be held by written consent in accordance with Delaware General Corporation Law §228. Pursuant to the By-laws currently in place, the annual meeting of the Company’s stockholders shall be held annually on a date and at a time, and via a format (in person, conference call, video conference etc.) designated by the board of directors and stated in a notice of the meeting.
The Company anticipates that it would need approximately $1,500,000 over the next 12 months to continue as a going concern, satisfy its capital commitments and continue its operations in accordance with its current business plan. In addition to revenues generated from sales, the Chief Operations Officer and several shareholders may fund the Company’s operations, if needed, during the next 12 months or until the Company can generate an ongoing source of capital sufficient to independently continue its operations.
As of December 31, 2023, the Company had generated revenues of $60,000. At December 31, 2023, the Company had a total net loss of $830,602 and had an accumulated deficit of $7,194,683.
For the period ended December 31, 2023, the Company’s independent auditors issued a report raising substantial doubt about the Company’s ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon financial support from its principal stockholders, its ability to obtain necessary equity financing, or its ability to sell its services to generate consistent profitability.
Revenues and Losses
During the year ended December 31, 2023, the Company posted revenues of $60,000. For that same year ended, total operating expenses were $872,950, consisting of general and administrative expenses of $174,577, professional fees of $85,721 and stock-based compensation fees of $612,652. Loss from operations and before income taxes totaled $812,950. Other expenses consisted of $17,652 in interest expense. After income tax expense of $0, the Company generated a net loss from continuing operations of $830,602, and a total net loss of $830,602.
Liquidity and Capital Resources
The Company had total assets of $28,431.
Since its inception, the Company has devoted most of its efforts to business planning, research and development, recruiting management and staff and raising capital. Accordingly, the Company was considered to be in the development stage until it recently began generating revenues. The Company generated limited revenues since its inception and there is no assurance of future revenues.
The Company’s proposed activities will necessitate significant uses of capital beyond 2023.
There is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans. In the interim, the Company plans to rely on its primary shareholder to continue his commitment to fund the Company’s continuing operating requirements. Management anticipates a total capital raise of $1,500,000 over the course of the following four consecutive quarters through private placements; provided, however, that the Company will require a minimum of $1,500,000 for the next 12 months to fund its operations, which will be used to fund expenses related to Platform Finalization Costs, Initial Marketing, Furniture, Fixtures, and Equipment, Working Capital, Professional Fees and Licensure and Miscellaneous Development Costs. Management believes that this capital would allow the Company to meet its operating cash requirements and would facilitate the Company’s business of selling and distributing its products. Management also believes that the acquisition of such assets would generate revenue to cover overhead cost and general liabilities of the Company and allow the Company to achieve overall sustainable profitability.
Discussion of the Year Ended December 31, 2023, as compared to the Year Ended December 31, 2022
For the year ended December 31, 2023, the Company had revenue of $60,000. For the year ended December 31, 2022 had revenue of nil.
During the year ended December 31, 2023, the Company posted operating expenses from continuing operations of $872,950, consisting of general and administrative expenses of $174,577, professional fees of $85,721 and stock-based compensation of $612,652. For the year ended December 31, 2022, the Company posted operating expenses from continuing operations of $441,961, consisting of general and administrative expenses of $19,872, professional fees of $73,800 and stock-based compensation of $348,289.
During the year ended December 31, 2023, the Company posted a net loss of $830,602 from continuing operations for a total net loss for the year of $830,602, compared to a net loss of $447,450 from continuing operations for a total net loss for the year of $447,450 for the year ended December 31, 2022.
During the year ended December 31, 2023, the Company used $148,290 of cash in operating activities, generated $159,582 in cash from financing activities, and the Company did not use or generate any cash in investing activities. During the year ended December 31, 2022, the Company used $63,334 of cash in operating activities, generated $80,473 in cash from financing activities, and the Company did not use or generate any cash in investing activities
Plan of Operations
Over the next five years, XESP will continue to expand its operations via several different facets of operation. Foremost, the Company will continue to expand its relationships with B2B companies in a broad range of industries. XESP will seek to leverage its successes in managing single growth objectives to manage multiple growth objectives for existing client companies. Also, XESP will continue to expand its Channel Partner program and will establish an Affiliate Referral program.
There is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans. In the interim, the Company plans to rely on its primary shareholder to continue his commitment to fund the Company’s continuing operating requirements. Management anticipates a total capital raise of $1,500,000 over the course of the following four consecutive quarters through private placements; provided, however, that the Company will require a minimum of $1,500,000 for the next 12 months to fund its operations, which will be used to fund expenses related to Platform Finalization Costs, Initial Marketing, Furniture, Fixtures, and Equipment, Working Capital, Professional Fees and Licensure and Miscellaneous Development Costs. Management believes that this capital would allow the Company to meet its operating cash requirements and would facilitate the Company’s business of selling and distributing its products. Management also believes that the acquisition of such assets would generate revenue to cover overhead cost and general liabilities of the Company and allow the Company to achieve overall sustainable profitability.
Equipment Financing
The Company has no existing equipment financing arrangements.
Revenue
The Company has developed a technology platform that is specifically designed for digital activation and engagement. The platform’s functionality will allow its clients to better engage with their audiences on a global level. The platform will also provide in depth engagement analytics.
Managed Service : XESP bills clients a one-time Onboarding Fee and an ongoing Quarterly Management Fee. Services provided include codifying client business rules and objectives, operating principles, and target audience identification, providing a Gap Analysis, and providing ongoing consultative information on content provisioning, audience capture, audience activation, etc.
Gain Share : In addition to XESP’s Onboarding and Quarterly Management Fees, XESP earns a share of increased client revenues for the targeted service or product.
Channel Partners : XESP bills Channel Partners an ongoing Quarterly Fee. Channel Partners are service entities that promote and utilize XESP technologies as an extension of their services to their clients. Channel partners invoice their clients and manage the relationships.
Alternative Financial Planning
As of December 31, 2023, the Company had cash available of $28,431.
Management anticipates a total capital raise of $1,500,000 over the course of the following four consecutive quarters through private placements. Other than as stated herein, the Company has no alternative financial plans at the moment. If the Company is not able to successfully raise monies as needed through a private placement or other securities offering (including, but not limited to, a primary public offering of securities), the Company’s ability to operate effectively will be severelyjeopardized.
The Company does not anticipate that it will generate revenue sufficient to cover its planned operating expenses, and the Company must obtain additional financing in order to develop and implement its business plan and proposed operations. If the Company is not successful in generating sufficient revenues and/or obtaining additional funding to develop its business plan and proposed operations, this could have a material adverse effect on its business, results of operations liquidity and financial condition.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
Refer to Note 2 of our financial statements contained elsewhere in this Form 10-K for a summary of our critical accounting policies and recently adopted and issued accounting standards.
