Executive Summary

Q3 2021 revenue accelerated to $0.269M, a record for the company, driven by sales of limited-edition Nano Factory tokens for the MicroBuddies NFT game; YoY revenue increased from $0.003M and Q/Q from $0.054M .
Reported net loss of ($12.3M), overwhelmingly impacted by a non-operational, mark-to-market derivative liability tied to ViaOne-linked convertible features; $12.11M of the loss was directly from the derivative revaluation, masking otherwise modest operating loss .
Go-to-market milestones advanced: legal review of game documentation completed, beta program launched on Polygon’s testnet (Oct 5), and OTCQB uplisting completed; management reiterated mainnet launch plans in Q4 2021 as tokens were over 90% sold out .
Post-quarter, the company closed a $3.1M private placement led by H.C. Wainwright to fund MicroBuddies expansion and working capital, a key liquidity bridge ahead of launch .

What Went Well and What Went Wrong

Record quarterly and YTD revenues driven by MicroBuddies token sales; tokens >90% sold out ahead of mainnet, indicating strong interest and pre-launch traction .
Regulatory and platform execution: completed legal review of game docs; migrated mainnet to Polygon for lower fees and faster transactions; beta participation program initiated Oct 5 .
Capital markets and visibility: up-listed to OTCQB for added transparency; closed $3.1M private placement to accelerate MicroBuddies and bolster working capital; CEO emphasized strategic timing with game launch .

GAAP net results dominated by derivative liability swings, producing ($12.3M) net loss in Q3, obscuring operational performance; $12.11M loss specifically tied to derivative mark-to-market .
Operating expenses scaled with game build and marketing, rising to $0.452M in Q3 (vs $0.104M YoY); advertising spend alone was ~$0.159M in the quarter .
Liquidity constraints persisted pre-raise: cash was $3,833 at quarter-end; working capital deficit and high current liabilities (including ViaOne) remained a risk until funding closed .

Metric	Q3 2020	Q1 2021	Q2 2021	Q3 2021
Revenue ($USD)	$2,554	$6,692	$53,837	$269,355
Cost of Revenues ($USD)	$3,213	$3,917	$5,660	$10,226
Gross Profit ($USD)	($659)	$2,775	$48,177	$259,129
Operating Expenses ($USD)	$104,343	$101,372	$149,439	$452,176
Operating Income (Loss) ($USD)	($105,002)	($98,597)	($101,262)	($193,047)
Net Income (Loss) ($USD)	$86,475	$131,167	($3,442,183)	($12,325,187)
EPS (Basic & Diluted, $)	n/a	$0.00	($0.05)	($0.15)
Gross Profit Margin (%)	(25.8%)*	41.5%*	89.5%*	96.2%*

Notes: *Margins are calculated from cited revenue and gross profit and are heavily influenced by early-stage revenue mix and pricing.

Segment breakdown: Not disclosed; company reports consolidated results only .

KPIs (operational and balance sheet highlights):

Nano Factory tokens status: “over 90% sold out” ahead of mainnet .
Digital assets on balance sheet: $323,207 (no impairments recorded through Q3 2021) .
Advertising & promotion (Q3): $158,715 .
Shares outstanding (Q3): 81,792,707 .
ViaOne Services payable: $2,682,337 (as of Sept 30, 2021) .

Metric	Period	Previous Guidance	Current Guidance	Change
MicroBuddies mainnet launch	Q4 2021	Anticipated Q3 2021 launch with token price increase prior to full launch	Launch on Polygon mainnet after Beta 2.0; Q4 timeline reiterated	Delayed (Q3 → Q4)
Beta test start	Oct 2021	Not started	Beta on Polygon Mumbai testnet began Oct 5, 2021	Initiated
Nano Factory Token pricing	Pre-launch	Planned price increase to 0.15 ETH prior to full launch	Reaffirmed in pre-launch communications (no new numeric update in Q3 8-K)	Maintained
Financial guidance (rev/margins/OpEx)	FY/Q4	None provided	None provided	Maintained

No Q3 2021 earnings call transcript was available; themes below reflect 10-Q MD&A and 8-K press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2021)	Trend
Blockchain platform choice	Early plan on Ethereum; Genesis Event launched; Q3 2021 launch targeted	Shift to Polygon due to high gas fees and latency; Ethereum bridge planned	Adaptation to reduce cost, improve UX
Regulatory/legal readiness	Plan formation and game build underway	Legal review of game documentation completed	Compliance readiness improved
Product launch schedule	Genesis Event started; Q3 mainnet targeted	Beta program started Oct 5; Q4 mainnet launch reiterated	Progressing toward launch
Capital & liquidity	High derivative liabilities; limited cash	Closed $3.1M private placement post-Q3; liquidity bridge for launch	Strengthened near term
Corporate visibility	OTC Pink → planning	OTCQB uplisting completed	Visibility improved
Internal controls	Not effective; material weakness noted	Still not effective; plan for CPA-led improvement	Remediation planned, ongoing

CEO on OTCQB uplisting: “We are extremely pleased to report that we have met all qualifications and have been accepted by OTC Markets to up-list from Pink Sheet Current to the OTCQB tier… The timing… is perfect as we get ready to launch our new blockchain NFT game MicroBuddies™.”
Crypto & Gaming Director on legal review and gameplay: “We are very excited to release our Game Documentation… subject to a legal review given the regulatory scrutiny… The fact that we are a public company… distinguishes us from other projects….”
On derivative-driven losses: management emphasized losses are “paper” from derivative liabilities linked to ViaOne notes and could fluctuate until potential conversion to equity, which would eliminate a significant portion of debt/derivative losses and improve financial statements .

Not applicable; no Q3 earnings call transcript found [functions.ListDocuments result showed none].

Wall Street consensus (S&P Global) for Q3 2021 EPS and revenue was not available; our attempt to retrieve S&P Global estimates encountered a system limit, and micro-cap OTC coverage is often sparse [GetEstimates error].
As a result, no formal comparison vs consensus can be provided; investors should note the limited analyst coverage typical for OTC micro-caps [GetEstimates error].

Pre-launch traction is real: token sales >90% sold-out and high gross margins reflect pricing power and demand ahead of mainnet .
Reported GAAP losses are dominated by non-operational derivative revaluations tied to ViaOne; operational P&L is modest relative to headline net loss, though OpEx ramp is expected until launch .
Execution risk remains: internal controls deemed not effective and liquidity was thin at Q3-end; the $3.1M private placement mitigates near-term capital needs for launch/marketing .
Platform shift to Polygon should materially reduce transaction costs and improve user experience, a critical factor for NFT game scalability and retention .
Catalysts: Q4 mainnet launch, community engagement, and potential ViaOne debt conversion (if pursued) could structurally improve the balance sheet and reduce P&L volatility .
Visibility improved with OTCQB uplisting; however, absence of broad sell-side coverage means price discovery will be event-driven—focus on launch KPIs, secondary market royalty flow, and user growth .
Trading implication: expect volatility around launch milestones and any updates on derivative liabilities; monitor cash burn vs private placement proceeds deployment .