TREASURE & SHIPWRECK RECOVERY, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

The following discussion and analysis is intended to provide a narrative of our financial results and an evaluation of our financial condition and results of operations. The discussion should be read in conjunction with our consolidated financial statements and notes thereto. A description of our business is discussed in Item 1 of this report, which contains an overview of our business as well as the status of our ongoing project operations.

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Results of operations

We have incurred recurring losses to date. Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities. However, there can be no assurances that we will be able to raise additional capital. Based on its historical rate of expenditures, the Company expects to expend its available cash in less than one month from
August 12, 2022.

Summary of the Year Ended April 30, 2022 Results of Operations Compared to the Year Ended April 30, 2021 Results of Operations

Revenue

The Company did not generate any revenue during the years ended April 30, 2022
and 2021.

Operating Expenses

During the year ended April 30, 2022the Company incurred consulting and accounting expense of $119,157labor expense of $36,924professional fees of
$118,159boat expense of $249,402research and development of $8,000general and administrative expense of $112,598 and depreciation expense of $14,530.

During the year ended April 30, 2021the Company incurred professional fees of
$150,277boat expense of $43,963labor expense of $12,402general and administrative expense of $41,989research and development of $20,000and depreciation expense of $48,530.

The increase in operating expenses for the year ended April 30, 2022 is attributable to the increased boat and labor expense for exploration.

Other Income (Expenses)

Interest expense was $774,797 for the year ended April 30, 2022. There was no interest expense during the same period in 2021. The interest expense in 2022 was a result of interest on notes and the amortization of the interest relating to the beneficial conversion features of several convertible promissory notes.

Total other income (expense) was $(1,410,797) during the year ended April 30, 2022 and $20,167 during the year ended April 30, 2021.

Other expenses for the years ended April 30, 2022 and 2021 were $1,410,797 and
$62,333. Other expenses in 2022 were due to an impairment loss of $636,000 on the trademark, graphics and related media and product materials that were acquired during the year ended April 30, 2019 and interest expenses. Other expenses in 2021 were related to the impairment of the remaining balance of
$62,333 of the purchase of a website and related apps.

The Company recorded other income of $0 and $82,500 during the years ended April 30, 2022 and 2021. In 2021 the Company received a refund of $82,500 on gaming app related fees under a settlement agreement.

Net Loss

For the year ended April 30, 2022 the Company incurred net losses of $2,069,567
versus net losses of $583,802 for the year ended April 30, 2021. The increase in net loss was attributable to increased impairment losses, interest expense and operating expenses.

Liquidity and Capital Resources and Cash Requirements

Liquidity and capital resources

As at April 30, 2022our total assets were $79,647.

As at April 30, 2022our current liabilities were $950,587 and stockholders’ deficit was $870,940.

As of April 30, 2022we had a net working capital deficit of $903,584

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Cash flows from operating activities

For the year ended April 30, 2022 net cash flows used in operating activities was $613,758.

For the year ended April 30, 2021 net cash flows used in operating activities was $368,872.

The increase in cash used in operating activities is attributable to increased operating and boat expenses.

Cash flows from investing activities

There were no cash flows from investing activities for the years ended April 30, 2022 and 2021.

Cash flows from financing activities

For the year ended April 30, 2022 cash flows provided by financing activities were $463,000.

For the year ended April 30, 2021 cash flows provided by financing activities were $559,955.

The increase in cash provided by financing activities is attributable to increased proceeds from the sale of convertible loans.

We qualify as a “smaller reporting company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.

For example, smaller reporting companies are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation SK or the auditor attestation of internal controls over financial reporting.

Future Financings

We will continue to rely on equity sales of the Company’s common shares in order to continue to fund business operations. Issuance of additional shares will result in dilution to existing shareholders. There is no assurance that the Company will achieve any additional sales of equity securities or arrange for debt or other financing to fund planned operations. Future financing activities involving the sale of common stock under subscription agreements or entering into convertible promissory note agreements may cause substantial dilution to current shareholders.

The Company may not be able to continue as a going concern. The report of our independent auditors for the years ended April 30, 2022 and 2021 raises substantial doubt as to our ability to continue as a going concern. Our independent auditors believe, based on our financial results as of April 30, 2022, that such results raised substantial doubts about the Company’s ability to continue as a going concern. If the Company is not able to continue as a going concern, it is highly likely that all capital invested in the Company will be lost.

Additionally, it is possible that the Company may face additional challenges in obtaining financing due to COVID-19’s effects on the general economy and the capital markets. If the Company is not able to obtain financing due to COVID-19 then it is highly likely that it will be forced to cease operations and shut down its business, which would likely result in a complete loss of all capital invested in the Company.

Management believes that current trends towards lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement its business plan and impede the speed of its operations.

Limited operating history; need for additional capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated very negligible revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

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Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. .

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