QUAD M SOLUTIONS, INC. – 10 KT OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Financial Statements and Supplementary Data” and our consolidated financial statements, accompanying notes and other financial information contained in this report. annual. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this annual report, particularly under “Risk Factors” and “Forward-Looking Statements”.


Overview


The Company, through its two wholly owned subsidiaries, NuAxess and PR345 n/k/a OpenAxess, Inc., company, provides a full range of benefits and insurance-related business recruitment and consulting services, primarily to small and medium-sized employers, offering innovative ways to provide their employees with multiple levels of benefits, including including major health insurance, as well as other financial and business advisory services. The Company has entered into third-party agreements with select strategic partners to provide comprehensive administered programs under its vendor relationship agreements. The Company offers programs that include innovative and affordable major health insurance plans and other employee benefit products and services. The NuAxess Smart Healthcare Plan is an exclusive health plan that is an ERISA qualified self-insured plan, which includes wellness and prevention programs, among other features. Our primary markets are small and medium employer groups, sometimes referred to as the “gig” economy.


Results of Operations


Comparison of the three-month period ended the 31st of December21 at the end of the three-month period December 31, 2020


Revenue


During the three-month period ended December 31, 2021 the company received
$12,034,752 revenue primarily from recruiting and business advisory services and we have engaged $11,272,996 expenses directly related to this income compared to $9,012,802 in revenue and $8,985,230 expenses directly related to this income during the three-month period December 31, 2020.


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Expenses


Operating expenses for the three-month period ended December 31, 2021 have been
$1,452,931 compared to $588,241 for the same period last year, which represents an increase of 147%, mainly attributable to an increase in professional fees, general and administrative expenses, executive fees and salary expenses. The main components of general and administrative expenses in fiscal year 2021 consisted of approximately $402,050 in consulting fees, $24,470 in office expenses $50,943 in IT expenditure and approximately $225,010 in commission fees. Professional fees were $287,543. In the prior year, the main components of general and administrative expenses consisted of approximately $223,861 in consulting fees, $12,400 marketing costs and $10,920 office costs.


Working Capital


The Company’s net loss for the three-month period ended December 31, 2021 and
December 31, 2020 have been $3,154,994 and $178,317, respectively. the $2,976,677
increase in net loss for the three-month period ended December 31, 2021compared to the three-month period ended December 31, 2020is mainly attributable to an increase in revenues offset by an increase in professional fees, general and administrative expenses, executive fees and salary expenses.

During the three-month period ended December 31, 2021, our primary sources of cash included cash received from convertible notes payable, notes payable and income. During the three-month period ended December 31, 2020 our primary source of cash included cash received from convertible notes payable and assignment of receivables. We intend to use new capital in the form of new equity or debt to advance our goals.

Net cash used by operating activities totaled $246,567 and $564,546 for the three-month periods ending December 31, 2021 and 2020, respectively. The variation between 2021 and 2020 is mainly due to an increase in accounts receivable offset by deferred revenue and an increase in accounts payable.

Net cash used by investing activities totaled $0 and $90,000 for the three-month periods ending December 31, 2021 and 2020, respectively. The variation between 2021 and 2020 is due to a short-term loan in 2020 that did not occur in 2021.

Net cash provided by financing activities totaled $411,006 and $707,657 for the three-month periods ending December 31, 2021 and 2020, respectively. The variation between 2021 and 2020 is mainly attributable to a decrease in proceeds from notes payable, short-term loan and sales of preferred shares in 2021, compared to 2020. Cash increased to $319,613 to December 31, 2021 from $155,174 to
September 30, 2021.

As shown in our accompanying financial statements, except for approximately
$411,006 receipts from the issuance of notes payable and convertible notes during the three-month period December 31, 2021we have a negative working capital and an accumulated deficit of $30,908,777and $27,753,783 and
$16,910,125 for the years ending September 30, 2021 and September 30, 2020, respectively. Notwithstanding our belief that we will be able to continue to raise capital through the issuance of equity and, at a reduced level, if at all, convertible notes. The Company believes that it will be able to raise the required amount of equity on terms acceptable to the Company, of which there can be no assurance, these factors indicate that we may be unable to continue to exist absent receiving additional funding.

In addition to our operating expenses, which average approximately $485,000 per month, management’s plans for the next twelve months include approximately $4 million cash expenditures for the development and expansion of our health insurance and employee benefits business. Although there are no guarantees, the Company believes that it will be able to generate sufficient capital from operations, equity and/or debt financing to fully implement its business plan. of primarily offering small and medium-sized businesses a full range of employee benefits and insurance services allowing employers to offer a variety of plans providing their employees with multiple levels of benefits, including medical insurance major illness, as well as financial and business advisory services.


Dividend Policy


We have never declared or paid, and do not plan to declare or pay, any cash dividends on any of our equity securities. We do not expect to pay dividends for the foreseeable future and we currently intend to retain all available funds and all future earnings for use in the operation of our business and to fund the growth and development of our business. Future decisions as to the declaration and payment of dividends, if any, will be at the discretion of our Board of Directors and will depend on conditions then existing, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors our Board of Directors may deem relevant. Our loan agreements limit our ability to pay dividends or make other distributions or payments on our common stock, in each case subject to certain exceptions.


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Off-balance sheet arrangements

The Company has not entered into any off-balance sheet transactions or arrangements.

Recent accounting pronouncements

Recent accounting pronouncements likely to affect the Company are described in Note 2 – Summary of significant accounting policies, sub-section “New accounting requirements and disclosures” in the annual financial statements below.

Limitations on Liability and Indemnification

We intend to amend our articles of association to contain provisions which limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Idaho straight. Any limitation of liability under Idaho The law does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunction or rescission.

Our amended articles will further authorize us to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Idaho
straight. We intend that our amended articles of association will also provide that, subject to the satisfaction of certain conditions, we will advance the expenses incurred by a director or officer before the final determination of any action or proceeding, and allow us to obtain insurance on behalf of any officer, director, employee or other agent for any liability arising out of his actions as such, whether or not we are entitled to indemnify him under the provisions of Idaho straight. We expect to enter into agreements to indemnify our directors, officers and other employees, as determined by the Board of Directors. With certain exceptions, these agreements provide for indemnification for related expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by any of these persons in connection with any action or proceeding. We believe that these amended statutory provisions and indemnification agreements are necessary to attract and retain qualified individuals as directors and officers.

Limitation of liability and indemnification provisions in our amended articles may discourage shareholders from taking legal action against our directors for breach of fiduciary duty. They can also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, could benefit us and other shareholders. In addition, a shareholder’s investment may be adversely affected to the extent that we pay settlement costs and damages against directors and officers as required by these indemnification provisions.

To the extent that indemnification of liability under the Securities Act may be permitted for directors, officers or persons controlling us, we have been informed that, in the opinion of the SECONDsuch indemnification is contrary to public order as expressed in the Securities Act and is therefore unenforceable.

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