NOTES
TO FINANCIAL STATEMENTS
July
31, 2019 and 2018
Note
1. Financial Statement Presentation
Cyber
Apps World Inc. (the “Company” or “CYAP”) following the merger with the Company’s wholly-owned subsidiary
on December 24, 2012 (formed for the sole purpose of merging with its parent), continued working on the further development of
the lithium batteries technology licensed from Terra Inventions Corp. (formerly Li-ion Motors Corp.) (“Terra”), the
Company’s former parent. Consultants for the Company were also working on the solar concentrating electric power generating
system working independently.
The
summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial
statements and notes are the representations of management. These accounting policies conform to accounting policies generally
accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
History
and Nature of Business
On
April 2, 2011, the Company’s Board of Directors (the “Board”) authorized the merger with our wholly-owned subsidiary,
Sky Power Solutions Corp., and in the merger the name of our Company was changed to Sky Power Solutions Corp.
On
April 15, 2008, Terra sold its controlling interest of the Company’s outstanding common stock to Blue Diamond Investments,
Inc. (“Blue Diamond”) With the sale of our VoIP telecommunications business, named Zingo Telecom, Inc., on May 15,
2008, the Company intends to concentrate efforts on further development of the lithium batteries technology licensed from Terra,
the Company’s former parent.
Effective
April 15, 2008, the Company entered into a License Agreement (“License Agreement”) with Terra Inventions providing
for Terra’s license to the Company of Terra’s patent applications and technologies for rechargeable lithium-ion batteries
for hybrid vehicles and other applications (“Licensed Products”).
Under
the License Agreement, Terra had the right to purchase its requirements of lithium ion batteries from the Company, and its requirements
of lithium ion batteries would have been supplied in preference to, and on a priority basis as compared with, supply and delivery
arrangements in effect for other customers. Terra’s cost for lithium ion batteries purchased from the Company would be the
actual manufacturing costs for such batteries for our fiscal quarter in which Terra’s purchase takes place.
On
May 25, 2010, the agreement was amended to grant the Company the exclusive license rights for the United States and Terra may
grant other companies rights elsewhere around the world.
Under
the terms of the License Agreement, the Company agreed to invest a minimum of $1,500,000 in each of the first two years under
the License Agreement in development of the technology for the Licensed Products. To date, we have not met the minimum requirements
in the development of the technology, and therefore, are not compliant with our obligations under this covenant of the License
Agreement. Terra advised the Company that it will not give notice of default against the Company for its failure to comply with
this covenant over the term of the License Agreement.
Effective
April 16, 2008, the Company agreed to lease approximately 5,000 square feet of space in Terra’s’ North Carolina facility.
The leased space was suitable, and utilized by the Company, for developmental and manufacturing operations for licensed products
pursuant to the license agreement. The lease was terminated May 2012. Also, effective April 16, 2008, the Company purchased certain
equipment and supplies related to the license agreement from Terra for the purchase price of $29,005.
Acquisition
of Asset
The
Company completed the acquisition of a website located at www.savinstultra.com with Real-Time Save Online Inc, a company incorporated
in Wyoming, including without limitation all right, title and interest in and to the domain, content, data and all incorporated
data on April 8, 2019. The Company acquired 100% undivided interest in and to the Website in consideration of issuing 11,500,000
shares of our common stock to Real-Time Save Online at closing.
The
SavingsUltra Website
The
Website consists of a search engine that users may access in order to compare the prices of different consumer products, which
is known as a price comparison website. The initial version of the website is published and is undergoing further development.
It currently features consumer items in various product categories, such as electronics, computers, cellular phones, office equipment,
clothing, books, toys, and jewelry. As well, the Website includes a search function that allows users to input key words and receive
a list of available consumer items that include those words. The Website was developed in Ukraine and India.
Under a new domain RtSave.com/us, we
intend to further develop the website to specifically market to American consumers by providing real-time pricing for
items that major U.S. retailers, including Wal-Mart, Best Buy, EBay, and Target, publish on their company websites. The
Website will show products available at the lowest price among all sellers and incorporate this automatically into its
digital marketing advertising. In order to access the content of the Website, consumers must register and establish an
account with us and provide us with contact information, including a name, email address, and telephone number. Account
holders who consent to the receipt of electronic correspondence from us will receive periodic emails from us that highlight
sales items for specific consumer products that reflect their Website search interests.
During
initial development, the vendor of the Website is able to offer products from 86 existing sellers and has agreements with an additional
420 sellers. As with other price comparison websites users will not be charged anything to use the Website. We intend to generate
revenue by securing commission payments from retailers and other sellers. These payments will vary from seller to seller, but
will either consist of a fee for each time one of our users accesses a retail website through our website, a fee for each time
one of our users buys an item from a retailer or register with their website, or a flat fee for inclusion on our website. Each
fee arrangement with a retailer will be negotiated separately.
Basis
of Presentation
Going
Concern
The
Company’s financial statements for the years ended July 31, 2018 and 2019, have been prepared on a going concern basis which
contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company
did not have any revenue in and as of July 31, 2019. Management recognized that the Company’s continued existence is dependent
upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses
as the Company continues to incur losses.
Since
its incorporation, the Company financed its operations almost exclusively through advances from its controlling shareholders.
Management’s plans are to finance operations through the sale of equity or other investments for the foreseeable future,
as the Company does not receive significant revenue from its new business operations. There is no guarantee that the Company will
be successful in arranging financing on acceptable terms.
The
Company’s ability to raise additional capital is affected by trends and uncertainties beyond its control. The Company does
not currently have any arrangements for financing and it may not be able to find such financing if required. Obtaining additional
financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms
or conditions of additional financing unavailable to it. These uncertainties raise substantial doubt about the ability of the
Company to continue as a going concern. The accompanying financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
Note
2. Summary of Significant Accounting Policies
Use
of Estimates
The
preparation of financial statements in accordance with accounting principles generally accepted in the United States of America
requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses,
and disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates and judgments,
including those related to revenue recognition, inventories, adequacy of allowances for doubtful accounts, valuation of long-lived
assets and goodwill, income taxes, litigation and warranties. The Company bases its estimates on historical and anticipated results
and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions
as to future events. The policies discussed below are considered by management to be critical to an understanding of the Company’s
financial statements. These estimates form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty.
Actual results may differ from those estimates.
Property
and Equipment
Property
and equipment are recorded at cost. Depreciation of property and equipment are accounted for by accelerated methods over the following
estimated useful lives:
Classification
|
|
Estimated Useful Lives
|
Furniture and Fixtures
|
|
10 years
|
Software
|
|
3-5 years
|
Computers
|
|
5 years
|
Evaluation
of Long-Lived Assets
The
Company reviews property and equipment for potential impairment whenever significant events or changes in circumstances indicate
the carrying value may not be recoverable in accordance with the guidance in ASC 360-15-35 “Impairment or Disposal of Long-Lived
Assets”. An impairment exists when the carrying amount of the long-lived assets is not recoverable and exceeds its fair
value. 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. If an impairment exists, the resulting write-down would be the difference
between the fair market value of the long-lived asset and the related net book value. The Company is looking for space to work
and store equipment for both battery development and solar dish.
The
Company is currently working on RT Save website and anticipates a launch date in early 2020.
Net
Loss Per Common Share
Basic
loss per common share is computed based on the weighted average number of shares outstanding during the year. Diluted earnings
per common share is computed by dividing net earnings (loss) by the weighted average number of common shares and potential common
shares during the specified periods. The Company has no outstanding options, warrants or other convertible instruments that could
affect the calculated number of shares.
Income
Taxes
Deferred
income tax assets or liabilities are computed based on the temporary differences between the financial statement and income tax
bases of assets and liabilities using the statutory marginal income tax rate in effect for the years in which the differences
are expected to reverse. Deferred income tax expenses or credits are based on the changes in the deferred income tax assets or
liabilities from period to period. A valuation allowance against deferred tax assets is required if, based on the weight of available
evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The valuation allowance
should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized.
Effects
of Recent Accounting Pronouncements
The
Company has elected early adoption of Accounting Standard Update (ASU) 2014-10, Topic 915, Development Stage Entities, Elimination
of Certain Financial Reporting Requirements. ASU 2014-10 removes all incremental financial reporting requirements for development
stage entities, including, but not limited to, inception-to-date financial information included on the statements of operations,
statements of stockholders’ equity (deficit) and statements of cash flows. As a result of the Company’s early adoption,
all references to the Company as a development stage entity have been removed. The adoption of this pronouncement has no impact
on the Company’s financial position, results of operations or liquidity.
Note
3. Property and Equipment
Property
and equipment consists of:
|
|
July 31,
|
|
|
|
2019
|
|
|
2018
|
|
Equipment
|
|
$
|
131,455
|
|
|
$
|
131,455
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation
|
|
|
(131,455
|
)
|
|
|
(131,455
|
)
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
0
|
|
|
$
|
0
|
|
Depreciation
expense for the years ended July 31, 2018 and 2019, was $0 and $0, respectively.
Note
4. Accounts Payable and Accrued Expenses
Accounts
payable and accrued expenses at July 31, 2018 and 2019 consisted of:
|
|
July 31,
|
|
|
|
2019
|
|
|
2018
|
|
Accounts payable
|
|
$
|
43,896
|
|
|
$
|
50,237
|
|
Wages, paid leave and payroll related taxes
|
|
|
56,194
|
|
|
|
51,299
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
100,090
|
|
|
$
|
101,536
|
|
Note
5. Convertible Notes Payable and Notes Payable
As
of July 31, 2019 and 2018, the Company has a balance of convertible notes is $0 and $77,593 which is convertible into common stock
at approx. $0.02 per share. If all of the debt is converted it would result in the issuance of 3,879,650 common shares. The debt
is due upon demand and bears 0% interest.
As
of July 31, 2019, the Company has a note payable totaling $100,000, which is due upon demand and bear 10% interest.
On
August 27, 2018 the company signed a Promissory Note for 100,000 with simple interest of 10% per annum accrued in arrears quarterly.
Note
6. Common Stock
Effective
January 18, 2013, the Company filed with Secretary of State of Nevada a Certificate of Change that affected a 1:50 reverse split
in the Company’s outstanding common stock and a reduction of our authorized common stock in the same 1:50 ratio, from 500,000,000
shares to 10,000,000 shares. We have retroactively restated all share amounts to show effects of the Common Stock split.
On
January 22, 2015, the Company converted $556,267 of its debt to various lenders into convertible debt and 17,550,000 shares of
Common Stock were issued as a result of the debt conversion, causing a beneficial conversion in the amount of $370,845.
On
April 18, 2016, the Company agreed to convert $62,400 of debt into 4,800,000 shares of common stock, which will reduce the debt
and notes owed. The Company recorded a loss on settlement of debt of $33,600. The shares were issued on May 31, 2016.
Note
7. Net Loss Per Common Share
Loss
per share is computed based on the weighted average number of shares outstanding during the year. Diluted loss per common share
is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified
periods. The Company has no outstanding options, warrants or other convertible instruments that could affect the calculated number
of shares.
The
following table sets forth the reconciliation of the basic and diluted net loss per common share computations for the years ended
July 31, 2018 and 2019.
|
|
Year Ended July 31, 2019
|
|
|
Year Ended July 31, 2018
|
|
|
|
Income
|
|
|
Shares
|
|
|
Per-Share
|
|
|
Income
|
|
|
Shares
|
|
|
Per-Share
|
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
(2,034
|
)
|
|
|
|
|
|
|
|
|
|
$
|
(2,034
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
(14,129
|
)
|
|
|
20,896,984
|
|
|
|
(0.00
|
)
|
|
|
(2,034
|
)
|
|
|
20,869,984
|
|
|
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
(14,129
|
)
|
|
|
20,896,984
|
|
|
|
(0.00
|
)
|
|
$
|
(2,034
|
)
|
|
|
20,869,984
|
|
|
|
(0.00
|
)
|
Note
8. Income Taxes
At
July 31, 2019, the Company has deferred tax assets as a result of the net operating losses incurred from inception. The resulting
deferred tax assets are reduced by a valuation allowance as discussed in Note 1, equal to the deferred tax asset as it is unlikely,
based on current circumstances, that the Company will ever realize a tax benefit. Deferred tax assets and the corresponding valuation
allowances amounted to approximately $3.0 million at July 31, 2019, July 31, 2018 and July 31, 2017 respectively. The statutory
tax rate is 35% and the effective tax rate is zero.
Under
current tax laws, the cumulative operating losses incurred amounting to approximately $8.6 million and $8.5 million at July 31,
2019 and July 31, 2018 respectively, will begin to expire in 2024.
Section
382 of the U.S. Internal Revenue Code imposes an annual limitation on loss carry-forwards to offset taxable income when an ownership
change occurs. The Company meets the definition of an ownership change and some of the net operating loss carryforwards will be
limited.
Note
9. Commitments and Contingencies