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Item 1.
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Financial Statements.
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Advanced Credit Technologies, Inc
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Balance Sheets
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As of June 30, 2017
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As of December 31, 2016
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(Unaudited)
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Assets
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Current assets
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Cash
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$
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168,232
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$
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31,776
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Advances Receivable
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12,000
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—
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Total Current Assets
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180,232
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31,776
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Total Assets
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$
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180,232
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$
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31,776
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Liabilities and Stockholders' Deficit
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Current Libilities
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Accounts payable and accrued expenses
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$
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154,065
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$
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124,347
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Loans payable – stockholders
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191,400
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191,400
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Loans from related parties
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—
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—
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Total Current Liabilities
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345,465
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315,747
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Total Liabilities
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345,465
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315,747
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Commitments and Contingencies
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Stockholders' Deficit
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Preferred Stock, $0.001 par value, 30,000 shares authorized;
30,000 outstanding as of 6/30/17 and 0 as of 12-31-16 respectively
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30
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Common stock,$0.001 par value,100,000,000 shares authorized;
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56,705,181 and 44,455,181 shares issued and outstanding
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52,705
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44,455
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in 2017 and 2016 respectively
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—
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—
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Additional paid in capital
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2,124,066
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1,732,926
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Accumulated deficit
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(2,342,034
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)
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(2,061,352
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)
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Total stockholders' deficit
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(165,233
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)
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(283,971
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)
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Total liabilities and stockholders' deficit
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$
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180,232
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$
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31,776
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See
accompanying notes to financial statements
Advanced Credit Technologies, Inc
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Statements of Operations
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(Unaudited)
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For the Six Months Ended
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For the Three Months Ended
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June 30, 2017
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June 30, 2017
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2017
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2016
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2017
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2016
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Revenues
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$
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—
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$
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700
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$
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—
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$
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700
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Consulting revenue
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—
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—
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—
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—
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Total Revenue
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0
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700
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0
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700
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Operational Expense
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—
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—
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—
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—
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Commission
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206
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—
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—
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—
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Professional fee
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47,534
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29,375
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2,793
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22,130
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Research and Development
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1,800
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115,000
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—
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115,000
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Officer's compensation
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168,944
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117,934
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71,975
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48,805
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Travel and entertainment
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25,170
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1,789
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2,498
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266
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Rent
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300
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300
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150
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150
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Computer and internet
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788
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1,365
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965
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861
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Office supplies and expenses
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4,535
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3,145
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543
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239
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Other Operating Expenses
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1,116
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615
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576
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450
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Total operating expenses
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250,422
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269,523
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79,500
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187,901
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Loss from operations
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(250,422
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)
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(268,823
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(79,500
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)
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(187,201
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)
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—
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—
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Interest expense
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30,260
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31,851
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15,030
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15,197
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Provision for income taxes
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—
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—
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—
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—
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Net loss
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$
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(280,682
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$
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(300,674
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$
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(94,530
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$
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(202,398
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Loss per common share-Basic and diluted
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$
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(0.006
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)
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$
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0.010
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$
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(0.002
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)
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$
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(0.005
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)
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Weighted Average Number of Common
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Shares Outstanding Basic and diluted
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48,127,159
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38,006,429
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51,050,737
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38,894,159
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See
accompanying notes to financial statements
Advanced Credit Technologies, Inc
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Statements of Cash Flows
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(Unaudited)
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For the Six Month Period
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June 30, 2017
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2017
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2016
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Operating Activities
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Net loss
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$
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(280,682
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)
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$
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(300,674
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)
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Adjustments to reconcile net loss to
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net cash used in operating activities
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Advances Receivables
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(12,000
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Stock issued for services
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19,430
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118,000
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Officers Loan Paid
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Amortization of discount on notes payable
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1,457
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Accounts Accured Interest Adjustment
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—
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—
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Accounts payable and accrued expenses
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29,708
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21,669
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Loan
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Net cash used in operating activities
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(243,544
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)
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(159,548
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)
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Financing Activities
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Proceeds from common stock issuance
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380,000
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103,775
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Amount Includes paid in capital Adjustment
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—
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—
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—
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—
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Capital contribution for profit sharing and warrant
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—
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40,000
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Net cash provided by financing activities
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380,000
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143,775
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Net increase (decrease) in cash and equivalents
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136,456
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(15,773
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)
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Cash and equivalents at beginning of the period
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31,776
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44,125
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Cash and equivalents at end of the period
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$
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168,232
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$
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28,352
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Supplemental cash flow information:
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$
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Interest paid
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$
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—
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$
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—
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Income taxes paid
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$
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—
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$
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—
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See
accompanying notes to financial statements
Advanced
Credit Technologies, Inc.
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Notes
to Financial Statements
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(Unaudited)
NOTE 1 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization and Nature of Business
On February 25, 2008, Advanced
Credit Technologies, Inc. (the "Company") was incorporated in the State of Nevada, that focuses on fraud prevention
and credit management by using our TurnScor software platform.
The Company offers a proprietary
software platform branded as CyberloQ™ which is a banking fraud prevention technology that is offered to institutional clients
in order to combat fraudulent transactions and unauthorized access to customer accounts. Through the use of a customer’s
smart-phone, CyberloQ uses a multi-factor authentication system to control access to a bank card, transaction type or amount,
website, database or digital service.
In addition to CyberloQ, the Company
offers a proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit
from the privacy of their own homes.
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with United States of America generally accepted accounting
principles (“GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with
the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed
with the SEC on Form 10-K for fiscal year 2016.
In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position and the
results of operations for the interim period presented have been reflected herein. Operating results for the six month period
ending June 30, 2017 are not necessarily indicative of the results that may be expected for the full year.
Reclassification
Certain reclassifications have
been made to conform previously reported data to the current presentation. These reclassifications have no effect on our net income
(loss) or financial position as previously reported.
Use of Estimates
In preparing these financial statements,
management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and
revenues and expenses during the year reported. Actual results may differ from these estimates. The Company bases its estimates
and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and
the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company
may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates
and the actual results, future results of operations will be affected.
Cash and Cash Equivalents
Cash equivalents are comprised
of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in
bank deposit accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses related
to this concentration of risk. As of June 30, 2017 and December 31, 2016, the Company had $0 in deposits in excess of federally-insured
limits.
Research and Development, Software
Development Costs, and Internal Use Software Development Costs
Software development costs are
accounted for in accordance with ASC Topic No. 985. Software development costs are capitalized once technological feasibility
of a product is established and such costs are determined to be recoverable. For products where proven technology exists, this
may occur very early in the development cycle. Factors we consider in determining when technological feasibility has been established
include (i) whether a proven technology exists; (ii) the quality and experience levels of the individuals developing
the software; (iii) whether the software is similar to previously developed software which has used the same or similar technology;
and (iv) whether the software is being developed with a proven underlying engine. Technological feasibility is evaluated
on a product-by-product basis. Capitalized costs for those products that are canceled or abandoned are charged immediately to
cost of sales. The recoverability of capitalized software development costs is evaluated on the expected performance of the specific
products for which the costs relate.
Internal use software development
costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal
computer software costs incurred during the application development stage. The application development stage is characterized
by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed
as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional
functionality.
In accounting for website software
development costs, we have adopted the provisions of ASC Topic No. 350. ASC Topic No. 350 provides that certain planning and training
costs incurred in the development of website software be expensed as incurred, while application development stage costs are to
be capitalized. During the six months ending June 30, 2017 and 2016, we expensed $1800 and $25,000 expenditure on research
and development, respectively.
During the six months ending June
30, 2017 and 2016, we have capitalized external and internal use software and website development costs totaling $0 and $0,
respectively. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from one to three
years.
Advertising Expenses
Advertising costs are expensed
as incurred. Advertising expenses included in the Statement of Operations for the three months ending June 30, 2017 and 2016
is $0 and $0, respectively.
Fixed Assets
The Company records its fixed assets
at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of fixed assets, the gross cost
and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain
or loss on sale of assets. The Company depreciates its fixed assets over their respective estimated useful lives ranging from
3 to 5 years.
Intangible and Long-Lived Assets
The Company follows FASB ASC
360-10, "Property, Plant, and Equipment," which established a "primary asset" approach to
determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a
long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a
long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and
eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair
value less cost to sell. For the three months and six months ending June 30, 2017 and 2016, the Company had not
experienced impairment losses on its long-lived assets.
Revenue Recognition
The Company recognizes revenue
when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive
evidence of an arrangement, delivery has occurred, the sales price is fixed and determinable, and collectability is reasonably
assured. Determining whether some or all of these criteria have been met involves assumptions and judgments that can have a significant
impact on the timing and amount of revenue the Company reports.
Fair Value Measurements
For certain financial instruments,
including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable and notes payable, the carrying
amounts approximate fair value due to their relatively short maturities.
The Company has adopted FASB ASC
820-10, "Fair Value Measurements and Disclosures." FASB ASC 820-10 defines fair value, and establishes a three-level
valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The
carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial
instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of
such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy
are defined as follows:
• Level
1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
• Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
• Level
3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Company did not identify any
other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance
with FASB ASC 815.
In February 2007, the FASB issued
FAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities," now known as ASC Topic
825-10 "Financial Instruments." ASC Topic 825-10 permits entities to choose to measure many financial assets
and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected
are reported in earnings. FASB ASC 825-10 is effective as of the beginning of an entity's first fiscal year that begins after
November 15, 2007. The Company has adopted FASB ASC 825-10. The Company chose not to elect the option to measure the fair value
of eligible financial assets and liabilities.
Segment Reporting
FASB ASC 280, "Segment
Reporting" requires use of the "management approach" model for segment reporting. The management approach
model is based on the way a company's management organizes segments within the company for making operating decisions and assessing
performance. The Company determined it has one operating segment as of June 30, 2017 and December 31, 2016.
Income Taxes
Deferred income taxes are provided
using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss
and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and
rates of the date of enactment.
When tax returns are filed, it
is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject
to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit
of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management
believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals
or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet
the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent
likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax
positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits
in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities
upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income
taxes in the statements of operations.
Earnings (Loss) Per Share
Earnings per share is calculated
in accordance with the FASB ASC 260-10, "Earnings Per Share." Basic earnings (loss) per share is based upon the weighted
average number of common shares outstanding. Diluted earnings (loss) per share is based on the assumption that all dilutive convertible
shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method,
options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as
if funds obtained thereby were used to purchase common stock at the average market price during the period.
At June 30, 2017 and December 31,
2016, no potentially dilutive shares were outstanding.
The computation of earnings per
share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.
Stock Based Compensation
The Company adopted FASB ASC Topic
718 – Compensation – Stock Compensation (formerly SFAS 123R), which establishes the use of the fair value based
method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value
of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services
are rendered. For stock based compensation the Company recognizes an expense in accordance with FASB ASC Topic 718
and values the equity securities based on the fair value of the security on the date of grant. Stock option awards
are valued using the Black-Scholes option-pricing model.
The Company accounts for stock
issued to non-employees where the value of the stock compensation is based upon the measurement date as determined at either (a)
the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity
instruments is complete.
Recent Accounting Pronouncements
In January 2016, the FASB issued
ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the accounting related
to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes
for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair
value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other
ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies
(collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities
will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize
unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive
income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily
determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value
practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment
plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure
requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has
been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value
change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative
liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit
risk would continue to be presented in net income, which is consistent with current guidance. For the Company, this standard is
effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative
to equity securities without readily determinable fair values which is applied prospectively. The Company is currently assessing
this ASU's impacts on the Company's consolidated results of operations and financial condition.
In March 2016, the FASB issued
ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue
Gross versus Net)”. The amendments in this ASU are intended to improve the operability and understandability of the implementation
guidance on principal versus agent considerations by amending certain existing
illustrative examples and adding
additional illustrative examples to assist in the application of the guidance. The effective date and transition of these amendments
is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”.
Public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including
interim reporting periods therein. The Company is currently in the process of evaluating the impact of the adoption on its financial
statements.
In August 2016, the FASB issued
ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in
practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides
guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments
made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method
investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class
of cash flows. For the Company, this ASU is effective January 1, 2018, with early adoption permitted. The standard requires application
using a retrospective transition method. The Company is currently assessing this ASU’s impact on its results of operations
and financial condition.
In November 2016, the FASB issued
ASU No. 2016-18, Restricted Cash, which clarifies guidance on the classification and presentation of restricted cash in the statement
of cash flows. Under the ASU, changes in restricted cash and restricted cash equivalents would be included along with those of
cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents
and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the
statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted
cash/equivalents. For the Company, this ASU is effective January 1, 2018, with early adoption permitted. Entities are required
to apply the standard’s provisions on a retrospective basis. The Company does not expect this ASU to have a material impact
on the Company’s consolidated results of operations and financial condition.
NOTE 2 – GOING CONCERN
The Company has incurred
losses since Inception resulting in an accumulated deficit of $2,342,034 as of June 30, 2017 that includes loss of $280,682
for the six months ended June 30, 2017 and further losses are anticipated in the development of its business. Accordingly,
there is substantial doubt about the Company's ability to continue as a 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. The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that
could result from the outcome of this uncertainty.
The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing
to meet its obligations and repay its liabilities arising from normal business operations when they come due.
Management anticipates that the
Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends
to position itself so that it may be able to raise additional funds through the capital markets. In light of management's efforts,
there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue
as a going concern from the twelve mont period after the financial statements are available to be issued.
NOTE 3 – STOCKHOLDERS'
DEFICIT
Common Stock
The Company has 100,000,000 shares
of $.001 par value Common stock authorized as of June 30, 2017 and December 31, 2016. There were 52,705,181 and 44,455,181
shares outstanding as of June 30, 2017 and December 31, 2016, respectively.
Preferred Stock
The Company has 30,000 shares of
$.001 par value Series A Super Voting Preferred Stock authorized as of June 30, 2017. There were 30,000 shares of the Series A
Super Voting Preferred Stock issued and outstanding as of June 30, 2017. The holders of the shares of Series A Preferred Stock
are entitled to Five-Thousand (5,000) votes per share, and such shares are held by the Company's President, Vice-President, and
Chief Technical Officer.
NOTE 4 – RELATED PARTY TRANSACTIONS
Related Party Loans Payable
The following is a summary of related party loans payable:
|
June
30, 2017
|
|
December
31, 2016
|
|
Liabilities
|
|
|
|
|
Due
to related parties
|
|
$
|
160,900
|
|
|
$
|
160,900
|
|
Notes
payable to related parties
|
|
$
|
30,500
|
|
|
$
|
30,500
|
|
The following is a summary of related
party loans payable:
Note Payable to Related Parties
On December 29, 2014, the Company,
the Company entered into a promissory note with a shareholder in the amount of $35,000. The promissory notes is with flat interest
of $9,500 payable on maturity date and $167 a day after maturity date. The maturity date is 120 days after issuance of the note.
The note is currently default on June 30, 2017. The unpaid principal of the note is $30,500 on June 30, 2017 and December 31,
2016. Interest expense of the note is $15,130 and $15,197 for the three months ended June 30, 2017 and 2016, respectively.
The Company also issued stock option
to the note holder to purchase 250,000 shares of the Company's common stock at $0.25 per share one year from the issuance date
of the promissory note. The fair value of the option grant estimated on the date of grant is $0 based on the Black-Scholes option-pricing
model. This option has expired.
Due to Related Parties
The Company has 2 outstanding NOTES,
one for $30,500 which is accruing interest in the amount of $167 per day, the second NOTE is for $160,900 and was assumed by a
third party, the third party agreed to a ZERO interest NOTE. It is the Company’s intent to have both of these NOTES resolved
before the end of the calender year.
NOTE 5 – CONVERTIBLE NOTES-STOCKHOLDERS
On September 14, 2015, the Company
issued a $10,000 convertible notes due on March 12, 2016 to its stockholder. The note bears no interest and is convertible to
125,000 shares at the rate of $0.08 per share per the terms of the note. There was a beneficial conversion feature associated
with the note. The value of beneficial conversion feature is $1,250 and book as additional paid in capital. The interest resulting
from amortization of discount on notes is $0 and $521 for the three months ended June 30, 2017 and 2016, respectively.
On September 18, 2015, the Company
issued a $8,990 convertible notes due on March 16, 2016 to its stockholder. The note bears no interest and is convertible to 112,375
shares at the rate of $0.08 per share per the terms of the note. There was a beneficial conversion feature associated with the
note. The value of beneficial conversion feature is $2,248 and book as additional paid in capital. The interest resulting from
amortization of discount on notes is $0 and $937 for the three months ended June 30, 2017 and 2016, respectively.
On October 14, 2015, the Company
issued a $8,000 convertible notes due on April 11, 2016 to its stockholder. The note bears no interest and is convertible to 80,000
shares at the rate of $0.1 per share per the terms of the note.
All the above convertible notes
were converted to 337,375 shares on November 15, 2016.
NOTE 6 – SUBSEQUENT EVENTS
The Company has evaluated
subsequent events through the date financial statements were issued. No events have occurred subsequent to June 30, 2017 that
require disclosure or recognition in these financial statements. The Company did however file an 8K on August 1, 2017. The
Company acquired the intellectual property and ownership rights to CyberloQ from Carten Tech, LLC. The owner is the
Company’s Chief Technology Officer, Mark Carten, the purchase was for $200,000 in cash, along with 4,000,000 shares of
Common Stock.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition
and Results of Operations.
|
The following discussion is
intended to assist you in understanding our business and the results of our operations. It should be read in conjunction with
the Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this report as well as our Report
on Form 10K filed with the Securities and Exchange Commission for the period ending December 31, 2016. Statements made in this
Form 10-Q that are not historical or current facts are "forward-looking statements". These statements often can be identified
by the use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We wish to caution readers not
to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements
represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical
results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise
any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence
of anticipated or unanticipated events.
Company Overview
Advanced Credit Technologies Inc.
(“ACRT”, ‘We” or the “Company”) is a development stage technology company focused on fraud
prevention and credit management.
The Company offers a proprietary
software platform branded as CyberloQ™. While previously the Company licensed CyberloQ, in the third quarter of 2017, the
Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.
CyberloQ is a banking fraud prevention
technology that is offered to institutional clients in order to combat fraudulent transactions and unauthorized access to customer
accounts. Through the use of a customer’s smart-phone, CyberloQ uses a multi-factor authentication system to control access
to a bank card, transaction type or amount, website, database or digital service. The mobile applications for CyberloQ have been
built, and the Company is currently beta-testing the technology in the banking ecosystem.
In addition to CyberloQ, the Company
offers a proprietary software platform under the brand name Turnscor
®
which allows customers to monitor and manage
their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also
intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added
benefit to offer their customers.
Liquidity, Capital Resources
and Material Changes in Financial Condition
The following table sets forth
our liquidity and capital resources as of June 30, 2017:
|
Cash
and cash equivalents
|
$
|
168,232
|
|
|
Total
assets
|
$
|
180,232
|
|
|
Total
liabilities
|
$
|
345,465
|
|
|
Total
shareholders’ deficit
|
$
|
165,232
|
|
As of June 30, 2017, our current
assets were $180,232 as compared to $31,776 in current assets as of December 31, 2016. This increase in current assets is primarily
due to increased cash from financing activities as set forth below.
As of June 30, 2017, our current
liabilities were $345,465 as compared to $315,747 in current liabilities as of December 31, 2016. This change in the Company’s
financial condition was related to increases in accounts payable and accrued interest of $30,260.
During the six months ended June
30, 2017, the Company received $380,000 of cash from financing activities compared to $143,775 for the six months ended June 30,
2016.
The Company does not currently
have any revenues, and is reliant on its ability to raise additional capital to continue execution of its business plan to move
the Company forward towards profitability. If the Company does not generate sufficient revenues to support its operations over
the next twelve months, the Company will possibly need to raise additional capital by issuing capital stock in exchange for cash
in order to continue as a going concern.
We believe that the Company’s
minimum capital requirements for the next twelve months is $750,000. With $750,000, the Company is able to continue business
operations and implement its expansion model. The Company plans to raise these funds through either debt or equity financing.
However, there are no agreements to attain such financing in place at this time. The Company cannot assure any investor that,
if needed, sufficient financing can be obtained or, if obtained, that it will be on reasonable terms.
Results of Operations for
the Six Months Ended June 30, 2017 and 2016
There have been no material changes
in the results of Company’s operations for the first and second quarters of 2017 as compared to the first and second quarters
of 2016.
Company revenues were $0.00 in
the six months ended June 30, 2017, and as opposed to $700 for the six months ended June 30, 2016.
During the six months ended June
30, 2017, we used $243,524 of cash for operating activities compared to the use of $185,133 of cash for operating activities during
the six months ended June 30, 2016. The additional operational expenses can primarily be attributed to a number of factors. For
a comparison of the three month period ending June 30, 2017 to June 30, 2016 our expenses have decreased by $108,401. This is
attributed to a one time research and development expense of $115,000 in 2016 compared to ZERO in 2017. We also decreased our
professional fees by $19,337. We increased our expenses in the following areas, officer compensation of $23,170, in related travel,
computers, and rent by $2766.
The Company paid officer compensation
of $168,944 during the six months ended June 30, 2017 as opposed to $118,034 during the six months ended June 30, 2016. This increase
in officer compensation was due to the Company hiring its Chief Technology Officer.
The Company paid travel expenses
of $25,170 during the six months ended June 30, 2017 as opposed to $1,789 during the six months ended June 30, 2016. This increase
in travel expenses was due to some officers of the Company making multiple sales trips overseas.
The foregoing increases in expenses
were partially offset by a decrease in research and development costs. The Company paid research and development costs of $1,800
during the six months ended June 30, 2017 as opposed to $25,000 during the six months ended June 30, 2016. This decrease in research
and development costs is primarily due to the fact that during 2016 the Company incurred certain one-time costs associated with
the build-out of the mobile applications for the CyberloQ
TM
technology.
In light of the net increase in
operating expenses for the six months ended June 30, 2017 when compared to the six month period ended June 30, 2016, the Company
experienced a net loss from operations of $271,252 for the six months ended June 30, 2017 as compared to net loss from operations
of $200,330 for the six months ended June 30, 2016.