At December 31, 2011 the company received a loan from a related party in the amount of $6,500 bearing interest at 5% per annum and is payable on demand. This note was extinguished during the fiscal year ended March 31, 2013.
During the year ended March 31, 2012, the balance of $28,600 loan payable to former related parties and the associated interest of $3,649 was recorded as extinguishment of debt income totaling $32,249.
As of the closing of the Acquisition on February 28, 2013, the Company had a $100,000 payable due to Opsolution GmbH pursuant to the Company’s joint venture agreement with Opsolution GmbH, and a $50,000 payable to the Opsolution Entities for the purchase of their property and equipment in the Acquisition. As of March 31, 2013, the Company had paid both of these payables in full.
Note 3 – Investments
As part of the purchase of the assets of Opsolution GmbH the Company acquired an equity interest in Opsolution NanoPhotonics. Opsolution NanoPhotonics is not consolidated as the Company is not the primary beneficiary providing the majority of financial support to Opsolution NanoPhotonics.
On February 28, 2013 the Company and Opsolution GmbH entered into a joint venture agreement to continue research and development of certain intellectual property. Upon execution of the joint venture agreement the Company is to provide funding of $100,000 toward the development by Opsolution of new prototypes. An additional $50,000 is to be paid over 8 month provided Opsolution GmbH meets certain investor and performance criteria. The Company is recognizing this research and development expense as the services are performed and the expenses are incurred.
On June 14, 2013, the registrant’s wholly owned subsidiary, Biozoom Technologies, Inc. exercised its option, pursuant to its February 28, 2013 joint venture agreement with Opsolution GmbH, a German company, to acquire 19.9% of Opsolution GmbH for $9,950. This investment is accounted for under the cost method.
Note 4 – Preferred Stock
The Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.
In connection with the Acquisition of the Opsolution assets, we have conducted an offering of 1,150,000 shares of Series A Preferred Stock for $1,150,000, or $1.00 per share, pursuant to the Series A Preferred Stock Purchase Agreement. This offering provides for a maximum offering amount of $2,000,000 for 2,000,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock is convertible into approximately seven and a half (7.5) shares of our common stock, comprising 8,625,000 shares, or up to 15,000,000 shares if the full $2,000,000 is sold.
Note 5 - Common Stock
On February 28, 2013 the Company issued 39,000,000 shares of its common stock at a value of .005 per share for the purchase of intellectual property from Opsolutions Spectroscopic Systems GmbH, Opsolution GmbH, Opsolution NanoPhotonics GmbH.
On May 26, 2013, the Company issued to Brunson Chandler & Jones, PLLC (“BCJ”), the Company’s corporate counsel, 100,000 shares of common stock as part of its annual engagement with BCJ, for legal services. The fair market value of the shares as of the date of issuance was determined to be $40,000 or $.40 a share. The 100,000 shares will be amortized over one year. The term of the agreement is from April 1, 2013 through March 31, 2014.
On June 15, 2013, the Company issued 195,000 shares of common stock to Totefa Dexter, Secretary of the Company, as part of his employment agreement with the Company. The Company recorded the value of the shares at $78,000 or $.40 per share.
Note 6 – Fair Value of Financial Instruments
The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and note payables approximate the carrying amount due to the short duration of these accounts.
Note 7- Loss per Share
Basic loss per common share is based on the net loss divided by weighted average number of common shares outstanding. Diluted income or loss per share is computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period using the treasury stock method. As the Company has a net loss for the periods ended June 30, 2013 and 2012, any potentially dilutive shares are anti-dilutive and are thus not included into the earnings per share calculation.
Note 8 - Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As of June 30, 2013 and March 31, 2013, the Company had an accumulated deficit of $616,425 and $287,754, respectively. In addition, the Company had a net loss for the three months ended June 30, 2013 of $328,671 and negative cash flows from operations of $360,232. These conditions raise substantial doubt about the Company's ability to continue as a going concern.
In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements on a continuing basis, to maintain or replace present financing, to acquire additional capital from investors, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
The Company intends to continue to serve its customers as a developer and distributor of customized computer software used in computer research. The Company intends to focus on raising additional capital and finding additional avenues to distribute its software. To the extent that any such financing involves the sale of our equity, our current stockholders could be substantially diluted. There is no assurance that we will be successful in achieving any or all of these objectives.