PART
I
ITEM
1. BUSINESS
We
are an enterprise organized for the purpose of searching for, documenting and collecting evidence of the existence of the creature
known as Bigfoot or Sasquatch, according to North American folklore, and, in direct connection with this purpose we develop and
produce and distribute fictional and documentary films about the creature and our searches.
In
addition to our films, available on DVD we have added T-shirts and other “branded” products such as decals, coffee
mugs, skull caps, and ball caps to our inventory. We have developed artwork which wraps around the travel trailer we use for search
expeditions, further increasing the extent to which our Company and logo can be recognized.
Bigfoot
Project Investments Inc. was incorporated under the laws of the State of Nevada on November 30, 2011. Pursuant to a purchase agreement,
effective January 13, 2013, Bigfoot Project Investments Inc. acquired all the assets of Searching for Bigfoot Inc., a Nevada corporation,
for four million four hundred thousand (4,400,000) shares of common stock and a promissory note was issued to the two majority
shareholders of Searching for Bigfoot Inc. in the aggregate amount of $484,039. Searching for Bigfoot Inc. was formed for the
purpose of researching the existence of Bigfoot, which has financed research and expeditions throughout the United States and
Canada.
Formed
as a simple organization with the intent of raising funds to produce a movie for distribution, “Searching for Bigfoot Inc.”
evolved such that it built significant value in video/film footage, materials, artifacts, and relationships with organizations
interested in Bigfoot’s existence around the country. In January 2019, the Company reinstated the subsidiary known as Searching
for Bigfoot, Inc. as an operating subsidiary of Bigfoot Project Investments Inc.
When
a decision was made to pursue the opportunity to produce and distribute films as an ongoing business venture, a management team
was brought together to form an entertainment investment corporation that would aim to capitalize on both current and future investment
projects related to Bigfoot. We intend to create entertainment properties surrounding the mythology and research of Bigfoot, as
well as potentially finding Bigfoot.
We
intend to become an entertainment investment company, where our competitive advantage is our developed knowledge base and the
advanced level of maturity of our projects. We intend to capitalize on our current inventory of projects; allowing our company
to continue creation of media properties and the establishment of physical locations, partnerships and alliances with organizations
to augment investment markets to create revenue as a stand-alone enterprise.
The
inventory of the Company’s projects currently consists of nine films which are being marketed to both DVD and Video On Demand
(VOD) through domestic and international distribution markets. Additionally, preliminary investment plans are being negotiated
for a 3D Movie with a movie production company. Foreign distribution markets have recently become available and our contracted
marketing company, The Bosko Group, is in the process of negotiating contracts for all nine DVD films, which include the movies
being subtitled and dubbed in foreign languages throughout Europe, Asia and South America. Currently, we are represented by our
contracted marketing distributor, The Bosko Group, in which they represent and sell the rights for the Bigfoot Project Investments
Inc. nine DVD Movies.
Bigfoot
Project Investments Inc. entered into two separate agreements with its distributor The Bosko Group in May 2017. One agreement
is for the re-release of seven of the Company’s documentaries with new introductions and commentaries. The other agreement
is for the production of five new feature length films depicting the “Dark and Violent” world of Bigfoot. The first
in the series “Brutal Bigfoot” was released August 29th, 2018 and has received mixed reviews on the Amazon.com
distributor site.
We
plan to continue to amass artifacts (footprint castings, skeletal, hair, skin, blood and other creature remains), and media products
such as DVD videos, photographs, audio and Written documents, televised, and movie media events from our continued Bigfoot expeditions
throughout the United States and Canada. We will use the artifacts we currently have and the artifacts we intend to acquire. The
collection of artifacts is used as scientific evidence to substantiate the existence of this creature known as “Bigfoot”
as a species through proper DNA testing and scientific examination. The artifacts are provided to the scientific community as
evidence in documentation of this creature as a new species. This documentation is used in media projects (television, DVD movies,
publications etc.) for marketing and management believes the artifacts have substantial value. Media products such as DVD videos,
photographs, audio and written documents, televised, and movie media events from our continued Bigfoot expeditions provide the
basis for our media projects, which are marketed and provide revenue. Additionally, we will negotiate and purchase intellectual
and physical properties relating to the creature as opportunities become available that will continue to feed the development
of additional projects.
Bigfoot
Project Investments Inc. bears a high degree of risk, lacking maturity and not having a background or reference point to evaluate
or compare company performance to the investor. Each of the projects we market will be carefully reviewed for its projected market
value by the Company’s Board of Directors. These Projects will be based on agreements with property owners of other organizations.
Personnel in each project area will share in the responsibility running our company’s operations.
Change of Control
On November 13, 2019, the majority shareholder
and CEO of the Company signed a Definitive Share Purchase Agreement (“Agreement”) in which Tom Biscardi sold 100%
of the issued and outstanding Preferred Series A stock to Joseph Cellura and 51% of the issued and outstanding shares of common
stock to Lord Global Corporation. The Agreement outlines specific legal agreements that will be executed in addition to the exchange
of stock. The specified legal agreements are currently in negotiations and will be executed as the terms are finalized. The current
Board of Directors will resign and be replaced during this process.
Employees
Currently,
we have no full-time employees other than our officers and directors. The directors are elected on an annual basis. The Company
does not compensate the officers or directors for their service. We anticipate that we will be unable to hire any employees in
the next twelve months, unless we begin to generate significant revenues. Meanwhile, we intend to utilize outsourcing quality
personnel in conjunction with the talents of our current officers and directors.
Available
Information
We
are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. All of our reports are able
to be reviewed through the SEC’s Electronic Data Gathering Analysis and Retrieval System (EDGAR) which is publicly available
through the SEC’s website (http://www.sec.gov).
We
furnish through our website links to all filings with the SEC including but not limited to annual reports containing financial
statements audited by our independent certified public accountants and quarterly reports containing reviewed unaudited interim
financial statements for the first three-quarters of each fiscal year. You may contact the Securities and Exchange Commission
at (800) SEC-0330 or you may read and copy any reports, statements or other information that we file with the Securities and Exchange
Commission at the Securities and Exchange Commission’s public reference room at the following location:
Public
Reference Room
100
F. Street N.W.
Washington,
D.C. 2054900405
Telephone:
(800) SEC-0330
ITEM
1A. RISK FACTORS
We
are at an early operational stage and our success is subject to the substantial risks inherent in the establishment of a new business
venture.
The
implementation of our business strategy is in an early stage. Our business and operations should be considered to be in an early
stage and subject to all of the risks inherent in the establishment of a new business venture. Accordingly, our intended business
and operations may not prove to be successful in the near future, if at all. Any future success that we might enjoy will depend
upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and which could have
a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our
company.
We
may have difficulty raising additional capital, which could deprive us of necessary resources.
We
expect to continue to devote significant capital resources to developing new inventory in the form of film footage and maintaining
our existing inventory. In order to support the initiatives envisioned in our business plan, we will need to raise additional
funds through public or private debt or equity financing, collaborative relationships or other arrangements. Our ability to raise
additional financing depends on many factors beyond our control, including the state of capital markets and the market price of
our common stock. Because our common stock is not listed on a major stock market, many investors may not be willing or allowed
to purchase it or may demand steep discounts. Sufficient additional financing may not be available to us or may be available only
on terms that would result in further dilution to the current owners of our common stock.
There
are substantial doubts about our ability to continue as a going concern and if we are unable to continue our business, our shares
may have little or no value.
The
Company’s ability to become a profitable operating company is dependent upon its ability to generate revenues adequate to
support our cost structure. This has raised substantial doubts about our ability to continue as a going concern. We plan to attempt
to raise additional equity capital by selling shares through one or more private placement or public offerings. However, the doubts
raised, relating to our ability to continue as a going concern, may make our shares an unattractive investment for potential investors.
These factors, among others, may make it difficult to raise any additional capital.
Failure
to effectively manage our growth could place strains on our managerial, operational and financial resources and could adversely
affect our business and operating results.
Our
growth has placed, and is expected to continue to place, a strain on our managerial, operational and financial resources. Further,
if our business grows, we will be required to manage multiple relationships. Any further growth by us, or an increase in the number
of our strategic relationships will increase this strain on our managerial, operational and financial resources. This strain may
inhibit our ability to achieve the rapid execution necessary to implement our business plan and could have a material adverse
effect upon our financial condition, business prospects, operations and the value of an investment in our company.
Risks
Relating to Our Business
Related
Party Transaction Risk
In
January 2013, Bigfoot Project Investments, Inc. executed a promissory note in the amount of $484,039 as part of the asset transfer
agreement for the transfer of all assets held by Searching for Bigfoot, Inc. During 2013, the Company increased the balance of
the promissory note by $489 to add an asset that was not included in the original transfer. The terms of the note are that the
unpaid principal and the accrued interest are payable in full on January 31, 2020. Bigfoot Project Investments Inc. disbursed
$36,476 as payment on the principal and $0 in interest during the year ended July 31, 2019. The principal balance of the note
as of July 31, 2019 was $435,894. The holders of the note have agreed to allow the Company additional time to develop revenue
producing projects which will allow the Company to pay this debt.
In
January 2013, Bigfoot Project Investments, Inc. acquired all the assets of Searching for Bigfoot, Inc. Since the majority shareholder
of Searching for Bigfoot, Inc. is also the majority shareholder in Bigfoot Project Investments, Inc. the asset acquisition was
treated as a related party transaction and was not considered an arm’s length transaction under Generally Accepted Accounting
Principles.
The
assets acquired were transferred over at the existing book value listed on the balance sheet of Searching for Bigfoot Inc. at
the time of transfer. The transfer agreement called for the issuance of 4,400,000 shares of common stock which were valued at
$.10 per share and the issuance of a promissory note in the amount of $484,029. The Company recorded a deemed distribution related
to this transaction in the amount of $924,029.
As
part of the asset transfer agreement Bigfoot Project Investments, Inc. received the following assets:
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footprint
cast of Bigfoot tracks – 73 original casts
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photographs
of Dead Creature from Strickler, Arkansas 1994 Dead Creature Incident
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109-inch
Skeleton
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various
Media Artifacts – Video TV News Media – 52 news stories
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contract
to sell Dinosaur fossil – most recent estimate by Paleontologist $1.2 million dollars
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rubber
suit from 2008 hoax
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various
DNA samples – Hair, and nails
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license
to use 6 dinosaur displays
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exclusive
rights to the Bigfoot Website
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Bigfoot
Live Radio Show
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Bigfoot
Live Radio Show Website
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360
hours of raw footage from expeditions for movie development
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various
DVD Movies and Documentary film projects
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exclusive
rights to all current contracts negotiated under Searching For Bigfoot Inc. including an advertising/marketing contract with
The Bosko Group which is included in the exhibits.
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The
note is held by two of the shareholders of the Company. C. Thomas Biscardi who owns 5.06% of the issued stock and Dennis J. Kazubowski
who owns .0031% of the issued stock. The Company currently does not have the means to satisfy this note by the due date, however,
Management has renegotiated the due date of the contract, and the Company is confident that it will be able to satisfy the terms
of the note by the renegotiated due date.
We
lack an operating history and have losses that we expect to continue into the future. There is no assurance our future operations
will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we will cease operations
and you will lose your investment.
We
were incorporated on November 30, 2011 and we have only generated minimal revenues. We have minimal operating history upon which
an evaluation of our future success or failure can be made. Our accumulated deficit through July 31, 2019 is $10,835,994.
Our
operating results will depend on our ability to sell our products. Any capacity restraints or systems failures could harm our
business, results of operations and financial condition.
Because
we will be limiting our marketing activities, we may not be able to attract enough customers to operate profitably. If we cannot
operate profitably, we may have to suspend or cease operations.
Our
ability to achieve and maintain profitability and positive cash flow is dependent upon:
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our
ability to develop and continually update our products for sale;
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our
ability to procure and maintain commercially reasonable terms relationships with third parties to develop and maintain our
productions, network and transaction processing systems;
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our
ability to identify and pursue mediums through which we will be able to market our products;
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our
ability to attract customers to purchase our productions;
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improve
our ability to generate revenues; and
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our
ability to manage growth by managing administrative overhead.
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Based
upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and generating
minimal revenues. We cannot guarantee that we will be successful in generating additional revenues in the future. Failure to generate
additional revenues may cause you to lose your investment.
We
may be unable to protect the intellectual property rights that we have.
Majority
shareholder and Director Carmine T. Biscardi and William F. Marlette, Director, developed the concepts behind our business plan.
They have assigned any rights that they may have had in that line to us. We own copyrights on DVD Movies Bigfoot Lives and Anatomy
of a Bigfoot Hoax. Copyrights are pending for DVD Movies Legend of Bigfoot, In the Shadow of Bigfoot, Bigfoot Alive in 82, Bigfoot
Lives-2, Bigfoot Lives-3, Hoax of the Century, Pursuit (The Search for Bigfoot) and Brutal Bigfoot.
We
intend to rely on a combination of copyright, trademark and trade secret protection and non-disclosure agreements with employees,
officers and third-party service providers to establish and protect the intellectual property rights that we have in the material
we develop. There can be no assurance that our competitors will not independently develop products that are substantially equivalent
of superior to ours. There also can be no assurance that the measures we adopt to protect our intellectual property rights will
be adequate to do so. The ability of our competitors to develop products or other intellectual property rights equivalent or superior
to ours or our ability to enforce our intellectual property rights could have a material effect on our results of operation.
Though
we do not believe that our business concepts will infringe on the intellectual property rights of third parties in any material
respect, there can be no assurance that third parties will not claim infringement by us with respect to them. Any such claim,
with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require us to enter
into royalty or licensing agreements. Such Royalty or licensing agreements, if required, may not be available on terms acceptable
to us or at all, which could have a material adverse effect on our business, results of operations and financial condition.
Changing
consumer preferences will require periodic revising.
As
a result of changing consumer preferences, there can be no assurance that any of our motion pictures and DVD’s concepts
will continue to be popular for a period of time. Our success will be dependent upon our ability to develop new and improved programs.
Our failure to sustain market acceptance and to produce acceptable margins could have a material adverse effect on our financial
condition and results of operations.
We
face intense competition and our inability to successfully compete with our competitors will have a material adverse effect on
our results of operation.
The
Entertainment industry is highly competitive. Many of our competitors have longer operating histories, greater brand recognition,
broader product lines and greater financial resources and advertising budgets than we do. Many of our competitors offer similar
products or alternatives to our services. There can be no assurance that we will be available to support our operation or allow
us to seek expansion. There can be no assurance that we will be able to compete effectively in this marketplace.
We
may be required to protect our intellectual property at great cost, expense and time of management which may detract from the
successful operation of the Company.
Intellectual
property claims against us can be costly and could impair our business. Other parties may assert infringement or unfair competition
claims against us. We cannot predict whether third parties will assert claims of infringement against us, or whether any future
assertions or prosecutions will harm our business. If we are forced to defend against any such claims, whether they are with or
without merit or are determined in our favor, then we may face costly litigation, diversion of technical and management personnel,
or product shipment delays. As a result of such a dispute, we may have to develop non-infringing technology or enter into royalty
or licensing agreements. Such royalty or licensing agreements, if required, may be unavailable on terms acceptable to us, or at
all. If there is a successful claim of product infringement against us and we are unable to develop non-infringing technology
or license the infringed or similar technology on a timely basis it could impair our business.
We
may need to obtain additional licenses or other proprietary rights from other parties.
To
facilitate development and commercialization of our movies, we may need to obtain additional licenses or other proprietary rights
from other parties. Obtaining and maintaining these licenses, which may not be available, may require the payment of up-front
fees and royalties. In addition, if we are unable to obtain these types of licenses, our product development and commercialization
efforts may be delayed or precluded.
If
we do not attract customers on cost-effective terms, we will not make a profit, which ultimately will result in a cessation of
operations.
Our
success depends on our ability to attract customers on cost-effective terms. Our strategy to attract customers via our advertising,
which has not been formalized or implemented, includes viral marketing, the practice of generating “buzz” among Internet
users in our products through the developing and maintaining web logs or “blogs”, online journals that are updated
frequently and available to the public, postings on online communities such as Yahoo!(R) Groups, and other methods of getting
internet users to refer others to our services by e-mail or word of mouth; search engine optimization, marketing via search engines
by purchasing sponsored placement in search results; and entering into affiliate marketing relationships with providers to increase
our access to customers. We expect to rely on direct marketing as the primary source of customers. Our marketing strategy may
not be enough to attract sufficient traffic to develop a consistent customer base. This lack of response would cause us to pursue
different avenues of marketing and promotional venues. If we are unsuccessful in attracting a sufficient amount of traffic, our
ability to get customers and our financial condition will be harmed.
To
date we do not have an established customer list. We cannot guarantee that we will ever have an established customer list. Even
if we obtain customers, there is no guarantee that we will generate a profit. If we cannot generate a profit, we will have to
suspend or cease operations.
We
will be dependent on third parties to develop and maintain our original plan (based on concepts developed by us and fulfill a
number of customer service and other retail functions). If such parties are unwilling or unable to continue providing these services,
our business could be severely harmed.
We
will rely on third parties to develop and maintain some of our new concepts (based on concepts developed by us). To date we have
not entered into any formal relationship with any third parties to provide these services. Our success will depend on our ability
to build and maintain relationships with such third-party- service providers on commercially reasonable terms. If we are unable
to build and maintain such relationships on commercially reasonable terms, we will have to suspend or cease operations. Even if
we are able to build and maintain such relationships, if these parties are unable to deliver products on a timely basis, our customers
could become dissatisfied and decline to make future purchases. If our customers become dissatisfied with the services provided
by these third parties, our reputation and our company could suffer.
We
lack an operating history and have losses that we expect to continue into the future. There is no assurance our future operations
will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we will cease operations
and you will lose your investment.
We
require minimum funding of approximately $150,000 to conduct our proposed operations for a period of one year. This includes the
cost of registration as well as normal operating costs. If we are not able to raise this amount, or if we experience a shortage
of funds prior to funding we may utilize funds from our officers and directors who have informally agreed to advance funds to
allow us to pay for professional fees, including fees payable in connection with the filing of a registration statement and operation
expenses. However, they have no formal commitment, arrangement or legal obligation to advance or loan funds to the Company. After
one year we may need additional financing.
The
requirements of being a U.S. public company may strain our resources and divert management’s attention.
As
a U.S. public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (“Exchange
Act”), the Sarbanes-Oxley Act, the Dodd-Frank Act, and other applicable securities rules and regulations. Compliance with
these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming,
or costly, and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual
and current reports with respect to our business and operating results.
There
are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that expressly authorized
or required the SEC to adopt additional rules in these areas, such as advisory shareholder vote to approve of our executives’
compensation plan (or Say on Pay), proxy access, and an advisory shareholder vote on how often we should include a Say on Pay
proposal in our proxy material for future annual shareholder meetings or any special shareholder meetings for which we must include
executive compensation information in the proxy statement for that meeting. Our efforts to comply with these requirements are
likely to result in an increase in expenses which is difficult to quantify at this time.
As
a result of disclosure in filings required of a public company, our business and financial condition will become more visible,
which we believe may result in threatened or actual litigation, including by competitors, and other third parties. If such claims
are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are
resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert resources of our management
and harm our business and operating results.
Going
forward, the Company has ongoing SEC compliance and reporting obligations, estimated as approximately $150,000 annually. Such
ongoing obligations will require the Company to expend additional amounts on compliance, legal and auditing costs. In order for
us to remain in compliance, we will require future revenues to cover the cost of these filings, which could comprise a substantial
portion of our available cash resources. If we are unable to generate sufficient revenues to remain in compliance, it may be difficult
for shareholders to resell any shares they may purchase, if at all.
We
may depend on outside parties for professional services related to reports under the Securities Exchange Act of 1934.
Because
our current officers and directors have limited prior experience in financial accounting and preparation of reports under the
Securities Exchange Act of 1934, we may have to hire additional experienced personnel to assist us with the preparation thereof.
If we need the additional experienced personnel and we do not hire them, we could fail in our plan of operations and have to suspend
or cease operations entirely and shareholders could lose their investment.
In
the future, there may not be effective disclosure and accounting controls to comply with applicable laws and regulations which
could result in fines, penalties and assessments against us.
Our
Officers and Directors are responsible for our managerial and organizational structure which will include preparation of disclosure
and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, they will be responsible for
the administration of the controls. Should they not have sufficient experience, they may be incapable of creating and implementing
the controls which may cause us to be subject to sanctions and fines by the Securities and Exchange Commission.
We
are completely dependent on officers and directors to guide our initial operations, initiate our plan of operations, and provide
financial support. If we lose their services, we will have to cease operations.
Our
success will depend entirely on the ability and resources of our officers and directors. If we lose their services, we will cease
operations. Presently, our officers and directors are committed to providing their time and financial resources to us. Our officers
and directors are not compensated by the Company with the exception of payments to the President for his time in leading the expeditions.
The President is the only officer that has received any form of compensation since the Company was formed. Our officers and directors
are either retired or have positions at other companies.
Our
Future Success Depends, in Part, on the Performance of Continued Service of Our Officers.
We
presently depend to a great extent upon the experience, abilities and continued services of our management team, which consists
of Mr. Biscardi (our CEO), Ms. Reynolds (our CFO), Mr. TJ Biscardi (our President), and Mr. Marlette (a Director). The loss of
services of Mr. Biscardi, Ms. Reynolds, or Mr. TJ Biscardi could have a material adverse effect on our business, financial condition
or results of operations. Failure to maintain our management team could prove disruptive to our daily operations, require a disproportionate
amount of resources and management attention and could have a material effect on our business, financial condition and results
of operations. On October 23rd, 2019, Mr. Marlette passed away. The remaining Board members held an emergency meeting
and elected Mr. Rocky Slavens to fill the vacated Director position.
Industry-related
risk factors:
The
short-term nature of contracts in our industry makes revenues difficult to project.
Many
standard contracts for entertainment projects are short term. If contracts are not maintained or new contracts are not obtained,
operations that maintain the structural integrity of the Company will be adversely affected. Additionally, a substantial part
of our projected revenue will come from future clients. The loss of such contracts from reductions in force or other factors could
have an adverse effect on the Company’s operations.
Some
services we require may subject our company to liability for substantial damages not covered by insurance.
Since
we intend to position ourselves for premium, high quality projects in an industry that is traditionally price-sensitive, damage
to our professional reputation, including as the result of a well-publicized breach of contract or incident, could have a material
adverse effect on our business.
To
a large extent, relationships with distributors, clients and customer expectations and perception of the quality of our products
are in large part determined by regular contact between clients and sales. If a customer is dissatisfied with our products there
may be more damage in our business than in non-service-related businesses. A well-publicized incident of breach of contract by
us could result in a negative perception of our company and our services, damage to our reputation, and the loss of current or
potential customers. This would have an adverse effect on our business, financial condition, and results of operations.
Acquisitions
may not be available or economical which may slow the Company’s growth.
Our
growth strategy includes the evaluation of selective acquisition opportunities which may place significant demands on our resources.
We may not be successful in identifying suitable acquisition opportunities (concepts, scripts, casts, directors, technicians,
etc.) and if such opportunities are identified, we may not be able to obtain acceptable financing for the acquisition, reach agreeable
terms with acquisition candidates, or successfully integrate acquired businesses.
An
element of our growth strategy is the acquisition and integration of projects in order to increase our density within certain
geographic areas, capture market share in the markets in which operations currently exist and improve profitability. We will be
unable to acquire other projects if we are unable to identify suitable acquisition opportunities, obtain financing on acceptable
terms, or reach mutually agreeable terms. In addition to the extent that consolidation becomes more prevalent in our industry,
the prices for suitable project candidates may increase to unacceptable levels thereby limiting our growth ability.
Our
growth through selective projects may place significant demands on management and our operational and financial resources. Acquisitions
involve numerous risks including the diversion of our management’s attention from other business concerns, the possibility
that current operating and financial systems and controls may be inadequate to deal with our growth and the potential loss of
key employees.
We
may also encounter difficulties in integrating any project we may acquire or will have recently acquired, with our existing operations.
Success in these transactions depends on our ability to be successful with our operational and financial systems, integrate and
retain the customer base and realize cost reduction synergies.
Failure
to integrate or to manage growth could have a material adverse effect on our business. Further, we may be unable to maintain or
enhance the profitability of any acquired project, consolidate its operations to achieve cost savings, or maintain or renew any
of its contracts.
In
addition, liabilities may exist that we fail or are unable to discover in the course of performing due diligence investigations
on any project we may acquire or have recently acquired. Also, there may be additional costs relating to acquisitions including
but not limited to possible purchase price adjustments. Any of our rights to indemnification from sellers to us, even if obtained,
may not be enforceable, collectible, or sufficient in amount, scope or duration to fully offset the possible liabilities associated
with the project or property acquired. Any such liabilities, individually or in aggregate, could have a material adverse effect
on our business.
If
we cannot effectively compete with new or existing project providers, the results of our operations and financial condition will
be severely affected.
Our
industry is intensely competitive. Our direct competitors include companies that are national and international in scope and some
competitors have substantially more personnel, financial, technical and marketing resources than we do, generate greater revenues
than we do, and have greater name recognition than we do. The recent trends toward consolidation in the industry may lead to further
competition. In addition, some competitors may be willing to offer similar services at lower prices, accept a lower profit margin,
or expend more capital to maintain or increase their business. If we are unable to successfully compete with new or experienced
providers, our business, financial condition, and results of operations will be adversely affected.
Internet
regulation may dampen our growth.
We
are subject to the same federal, state and local laws as other companies obtaining business from the Internet. Today there are
relatively few laws specifically directed towards conducting business on the Internet. However, due to the increasing popularity
and use of the Internet, many laws and regulations relating to the Internet are being debated at the state and federal levels.
These laws and regulations could cover issues such as user privacy, freedom of expression, pricing, fraud, quality of products
and services, taxation, advertising, intellectual property rights and information security. Applicability to the Internet of existing
laws governing issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity
and personal privacy could also harm our business. Current and future laws and regulations could harm our business, results of
operation and financial condition.
Risks
related to the Company’s common stock
Future
sales of our common stock, or the perception that future sales may occur, may cause the market price of our common stock to decline,
even if our business is doing well.
Sales
by our shareholders of a substantial number of shares of our common stock in the public market could occur in the future. These
sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could
reduce the market price of our common stock.
We
have not paid dividends in the past and do not expect to pay dividends for the foreseeable future, and any return on investment
may be limited to potential future appreciation on the value of our common stock.
We
currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate
paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of
directors after taking into account various factors, including without limitation, our financial condition, operating results,
cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. To the extent we do not
pay dividends, our stock may be less valuable because a return on investments will only occur if and to the extent our stock price
appreciates, which may never occur. In addition, investors must rely on sales of their common stock after price appreciation as
the only way to realize their investments, and if the price of our stock does not appreciate, then there will be no return on
investment. Investors seeking cash dividends should not purchase our common stock.
If
we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results
accurately or prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation
and adversely impact the trading price of our common stock.
Effective
internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial
reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment
existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control
deficiencies may adversely affect our financial condition, results of operations and access to capital.
Our
Shares of Common Stock Are Very Thinly Traded, and the Price May Not Reflect Our Value and There Can Be No Assurance That There
Will Ba an Active Market for Our Shares of Common Stock Either Now or in the Future.
Our
shares of common stock are very thinly traded, and the price, if traded, may not reflect our value. There can be no assurance
that there will be an active market for our shares of common stock either now or in the future. The market liquidity will be dependent
on the perception of our operating business and any steps that our management might take to increase awareness of our Company
with investors. There can be no assurance given that there will be any awareness generated. Consequently, investors may not be
able to liquidate their investments or liquidate it at a price that reflect the value of the business. If a more active market
should develop. The price may be highly volatile. Because there may be a low price for our shares of common stock, many brokerage
firms may not be willing to effect transactions in the securities. Even if an investor finds a broker willing to affect a transaction
in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling
costs may exceed the selling price. Further, many lending institutions will not permit the use of such shares of common stock
as collateral for loans.
Future
Issuance of Our Common Stock, Preferred Stock, Options and Warrants Could Dilute the Interests of Existing Shareholders.
We
may issue additional shares of our common stock, preferred stock, options and warrants in the future. The issuance of a substantial
amount of common stock, options and warrants could have the effect of substantially diluting the interests of our current stockholders.
In addition, the sale of a substantial amount of common stock or preferred stock in the public market, or the exercise of a substantial
number of warrants and options either in the initial issuance or in a subsequent resale by the target company in an acquisition
which received such common stock as consideration or by investors who acquired such common stock in a private placement could
have an adverse effect on the market price of our common stock.
Our
common stock is subject to the “penny stock” rules of the SEC and the trading market in shares of our common stock
is limited, which makes transactions in our common stock cumbersome and may reduce the value of an investment in our common stock.
Rule
15g-9 under the Exchange Act defines “penny stock,” for the purposes relevant to us, as any equity security that has
a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require that a broker of dealer approve a person’s
accounts for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions
in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person and
make a reasonable determination that the transaction in penny stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver prior to any transaction in a penny stock, as disclosure schedule prescribed by the Commission relating
to the penny stock market, which in highlight form sets forth the basis on which the broker or dealer made the suitability determination
and that the broker of dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers
may be less willing to execute transaction in securities subject to the “penny stock” rules. This may make it more
difficult for investors to dispose of our common stock and cause a decline in the market value of the stock. Disclosure also has
to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and
remedies available to an investor in cases of fraud in penny stocks transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
ITEM
1B. UNRESOLVED STAFF COMMENTS
None.
ITEM
2. PROPERTIES
We
currently lease office space at 570 El Camino Real NR-150, Redwood City, CA 94063 as our principal offices. We believe these facilities
are in good condition, but that we may need to expand our leased space as our business efforts increase.
ITEM
3. LEGAL PROCEEDINGS
From
time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time
to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management
is any litigation threatened against us, which may materially affect us.
ITEM
4. MINE SAFETY DISCLOSURES
Not
applicable.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
For
the Years Ended July 31, 2019 and 2018
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization,
Nature of Business and Trade Name
Bigfoot
Project Investments Inc. (“we”, “our” the “Company”) was incorporated in the State of Nevada
on November 30, 2011. The Company’s administrative office is located at 570 El Camino Real NR-150, Redwood City, CA and
its fiscal year ended July 31. Since inception, the Company has been engaged in organizational efforts and the pursuit of financing.
The Company was established as an entertainment investment business.
The
Company’s mission is to create exciting and interesting proprietary investment projects, entertainment properties surrounding
the mythology, research, and potential capture of the creature known as Bigfoot. The Company performs research in determining
the existence of this elusive creature. For the past six years the research team, members of management have performed research
on various expeditions investigating sightings throughout the United States and Canada.
The
Company’s competitive advantage is the in-house knowledge and the advanced level of maturity of its various projects developed
and currently owned by our officers and controlling shareholder. The Company will capitalize on the current projects through contractual
agreements which allow the Company to continue to create media properties and establish physical locations, partnerships, and
strategic alliances with other organizations to create revenue as a stand-alone business.
Basis
of Presentation
These
consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America.
Principles
of Consolidation
The
consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries.
All intercompany accounts and transactions have been eliminated.
Use
of Estimates
The
preparation of consolidated financial statements in accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses
during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s
financial condition and results of operations during the period in which such changes occurred. Actual results could differ from
those estimates.
Cash
and Cash Equivalents
For
purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with maturity of three
months or less to be cash equivalents.
Inventory
Valuation
We
value inventory at the lower of cost or net realizable value; cost being determined on a “first-in, first-out” basis.
The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based
on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Our policy is to assess
inventory on an annual basis and based on our assessment current inventory is considered fully impaired as of July 31, 2019, resulting
in $11,386 loss on inventory obsolescence during the year ended July 31, 2019.
Website
Development Cost
The
Company adopted Subtopic 350-50 of the FASB Accounting Standards Codification for website development costs. Under Sections 305-50-15
and 350-50-25, the Company capitalizes costs incurred to develop a website as website development costs. They are amortized on
a straight-line basis over the estimated useful lives of three (3) years.
Income
Tax
The
Company accounts for income taxes under ASC 740 “Income Taxes”. Under the asset and liability method of ASC
740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain
deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
Revenue
Recognition
The
Company accounts for revenues according to ASC Topic 606, “Revenue from Contracts with Customers” which establishes
principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the
entity’s contracts to provide goods or services to customers. The new standard’s core principal is that an entity
will recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for
transferring good or services to a customer. The principals in the standard are applied in five steps:
1)
Identify the contract(s) with a customer;
2)
Identify the performance obligations in the contract;
3)
Determine the transaction price;
4)
Allocate the transaction price to the performance obligations in the contract; and
5)
Recognize revenue when (or as) the entity satisfies a performance obligation.
We
adopted Topic 606 for the year ended July 31, 2018 using the modified retrospective transition method. We recognized the cumulative
effect of adopting this guidance as an adjustment to our opening balance of retained earnings. Prior periods will not be retrospectively
adjusted. The adoption of Topic 606 does not have a material impact to our consolidated financial statements, including the presentation
of revenues in our Consolidated Statements of Operations, which were not broken down by revenue stream or geographic areas since
the Company only sells within the United States and has only one revenue stream.
During
the year ended July 31, 2019, the Company’s revenues were primarily made up of revenue generated from our online streaming
distributor. Revenue consists of pay per view sales from the online streaming contract as well as proceeds and commissions from
sale of DVDs and videos.
The Company generated revenues
from contracted sources of $888 and $2,827 for the twelve months ended July 31, 2019 and 2018, respectively.
Accounts
receivable
The
Company routinely assesses the recoverability of receivables to determine their collectability by considering factors such as
historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect
a customer’s ability to pay. The Company determines its allowance for doubtful accounts by considering such factors as the
length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its
obligations to the Company and the condition of the general economy and the industry as a whole.
The
Company has evaluated its accounts receivable history and determined that an allowance for doubtful accounts of $73,413 and $74,500,
is required for the years ended July 31, 2019 and 2018, respectively. The Company reported net accounts receivable balance at
July 31, 2019 and 2018 of $0 and $0, respectively.
Concentration
risk
The
Company recognized $888 from Amazon, in the year ended July 31, 2019 which was 100% of reported income.
The
Company recognized $1,950 from EGPE and $877 from Amazon, in the year ended July 31, 2018 which was 69% and 31% of reported income,
respectively.
Fair
value of financial instruments
The
carrying value of cash, accounts receivable, accounts payable and accrued expenses, and debt approximate their fair values because
of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit
risks arising from these financial instruments.
Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in
the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on
the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use
of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are
considered observable and the last unobservable.
●
|
Level
1 -
|
Quoted
prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions
in active exchange markets involving identical assets.
|
|
|
|
●
|
Level
2 -
|
Quoted
prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities
that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable
in active markets. These are typically obtained from readily-available pricing sources for comparable instruments.
|
|
|
|
●
|
Level
3 -
|
Unobservable
inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s
own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best
information available in the circumstances.
|
The
following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded
at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of
July 31, 2019 and 2018:
|
|
Amount
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Embedded conversion derivative liability 2018
|
|
$
|
351,492
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
351,492
|
|
Total 2018
|
|
|
351,492
|
|
|
|
|
|
|
|
|
|
|
|
351,492
|
|
Embedded conversion derivative liability 2019
|
|
|
177,746
|
|
|
|
-
|
|
|
|
-
|
|
|
|
177,746
|
|
Warrant derivative liability 2019
|
|
|
47,063
|
|
|
|
|
|
|
|
|
|
|
|
47,063
|
|
Total 2019
|
|
$
|
224,809
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
224,809
|
|
The
following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial
instruments, measured at fair value on a recurring basis using significant unobservable inputs:
Balance at July 31, 2017
|
|
$
|
262,722
|
|
Fair value of derivative liability at
issuance charged to debt discount
|
|
|
55,614
|
|
Reclass to equity due to conversion
|
|
|
(306,377
|
)
|
Unrealized derivative
loss included in other expense
|
|
|
339,533
|
|
Balance at July 31, 2018
|
|
$
|
351,492
|
|
Fair value of derivative liability at
issuance charged to debt discount
|
|
|
200,770
|
|
Reclass to equity due to conversion
|
|
|
(205,391
|
)
|
Unrealized derivative
gain included in other expense
|
|
|
(122,062
|
)
|
Balance at July 31, 2019
|
|
$
|
224,809
|
|
On
August 9, 2018, the Company and EMA Financial (“EMA”) negotiated a settlement agreement for the January 2017 Note.
In the settlement agreement EMA agreed to accept the amount of $40,000 as the current outstanding balance of the January 2017
Note as of the Effective Date. $57,248 derivative gain was recognized as a result of the reduction in convertible note balance
The
Company evaluated its convertible notes to determine if the embedded component of those contracts qualify as derivatives to be
separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The Company determined that due to the variable
number of common stock that the notes convert to, the embedded conversion option were required to be bifurcated and accounted
for as a derivative liability. The fair value of the derivative liability is calculated at the time of issuance and the Company
records a derivative liability for the calculated value. Changes in the fair value of the derivative liability are recorded in
other income (expense) in the consolidated statements of operations. Upon conversion of a derivative instrument, the instrument
is marked to fair value at the conversion date and then that fair value is reclassified to equity. The Company evaluated all
outstanding warrants to determine whether these instruments may be tainted. All warrants outstanding were considered tainted.
For the period ended July 31,
2019, the Company’s derivative instruments were valued using the Lattice
model (for convertible notes) based on a probability weighted discounted cash flow model, and the Montel Carlo model (for tainted
warrants) based on a multipath random event model. Assumptions used in the valuation include the following: a) underlying
stock price ranging from $0.00038 to $0.00009; b) projected discount on the conversion price ranging from 40% to 58% with the
notes effectively converting at discounts in the range of 38.51% to 73.97%; c) projected volatility of 261.1% to 543.8%; d) probabilities
related to default and redemption of the notes during the term of the notes.
For
the year ended July 31, 2018, the Company’s derivative instruments were valued using the Lattice model which was based on
a probability weighted discounted cash flow model. Assumptions used in the valuation include the following: a) underlying stock
price ranging from $0.0001 to $0.2; b) projected discount on the conversion price ranging from 62% to 35% and 40% with the notes
effectively converting at discounts in the range of 55.5% to 75.4%; c) projected volatility of 366% to 499.9%; d) probabilities
related to default and redemption of the notes during the term of the notes.
The
Company has considered the provisions of ASC 480, Distinguishing Liabilities from Equity, as the conversion feature embedded
in each debenture could result in the note principal being converted to a variable number of the Company’s common shares.
Basic
and Diluted Earnings per Share
Basic
earnings per share are based on the weighted-average number of shares of common stock outstanding.
The
FASB ASC Topic 260, “Earnings per Share”, requires the Company to include additional shares in the computation of
earnings per share, assuming dilution.
We
calculate basic earnings (loss) per share by dividing net income (loss) available to common shareholders by the weighted average
number of common shares outstanding during the reporting period. Diluted earnings per share is calculated similarly but reflects
the potential impact of outstanding stock options, stock warrants and other commitments to issue common stock, including shares
issuable upon the conversion of convertible notes outstanding, except where the impact would be anti-dilutive.
Diluted
earnings per share are based on the assumption that all dilutive options were converted or exercised. Dilution is computed by
applying the treasury stock method for options and warrants and “if converted” method for convertible notes. Under
the treasury stock method, options and warrants are assumed to be exercised at the time of issuance, and as if funds obtained
thereby were used to purchase common stock at the average market price during the period.
The
following is a reconciliation of basic and diluted earnings per share for the years ended July 31, 2019 and 2018:
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
|
July
31, 2019
|
|
|
July
31 2018
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net
(loss) available to common shareholders
|
|
$
|
(490,715
|
)
|
|
$
|
(6,433,283
|
)
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average shares – basic
and diluted
|
|
|
3,295,591,232
|
|
|
|
688,162,436
|
|
|
|
|
|
|
|
|
|
|
Net (loss) per share
– basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
Recent
Account Pronouncements
In
January 2017, the FASB issued an ASU regarding how goodwill is tested annually. This ASU will simplify the measurement of goodwill
which will reduce cost and complexity of the evaluating process. This ASU is effective beginning after December 15, 2019. The
adoption of this ASU will not have a material impact on the financial position and results of operations of the Company.
NOTE
2 – GOING CONCERN
The
Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States
of American applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company has incurred recurring losses, does not have significant cash or other current
assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue
as a going concern. These factors raise substantial doubt about our ability to continue as a going concern.
In
the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its
business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and payment
of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required
to raise additional capital.
Historically,
it has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operation and growth.
Management may raise additional capital by future public or private offerings of the Company’s stock or through loans from
private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure
to do so could have a material and adverse effect upon it and its shareholders.
The
ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described
in the preceding paragraph and eventually attain profitable operations. The accompanying consolidated financial statements do
not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
NOTE
3 – ADVANCE FROM SHAREHOLDERS
For
the twelve months ended July 31, 2019 and July 31, 2018, additional advances from shareholders were $100,220 and $201,412, respectively.
The Company made payments on these advances amounting to $82,609 and $184,210 for the twelve months ended July 31, 2019 and July
31, 2018, respectively. These advances bear no interest and are due on demand. Total advances from shareholders as of July 31,
2019 and 2018 were $75,135 and $57,524, respectively.
During
the twelve months ended July 31, 2018, $20,000 in advances from shareholder was converted to 62,500,000 shares of common stock.
NOTE
4 – NOTE PAYABLE – RELATED PARTY
In
January 2013, Bigfoot Project Investments, Inc. executed a promissory note in the amount of $484,029 as part of the asset transfer
agreement for the transfer of all assets held by Searching for Bigfoot, Inc. In August 2013, the Company increased the balance
of the promissory note by $489 to add an asset that was not included in the original transfer. The note is subject to annual interest
of 4% and the unpaid principal and the accrued interest are payable in full on January 31, 2018. The holders of the note have
agreed to allow the note to be renewed for another year, making the current maturity date January 31, 2020.
Monthly
payments are not required on the note; however, the note does contain a prepayment clause that allows for payments to be made
prior to the due date with no detrimental effects. The Company paid $36,476 toward the principal of the loan during the year ended
July 31, 2019. As of July 31, 2019, and 2018, the outstanding balance on the note was $435,894 and $472,370, respectively.
Interest
expense for the years ended July 31, 2019 and 2018 was $18,895 and $18,895, respectively. During the year ended July 31, 2018,
$35,000 of accrued interest was converted to 109,375,000 shares of common stock.
NOTE
5 – CAPITAL STOCK
The
holders of the Company’s common stock are entitled to receive dividends out of assets or funds legally available for the
payment of dividends at such times and in such amounts as the board from time to time may determine. Holders of common stock are
entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of
the election of directors then standing for election. The common stock is not entitled to pre-emptive rights and is not subject
to conversion or redemption. Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution
to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any,
on any outstanding payment of other claims of creditors.
The
Company has 4,433,279,043 and 2,159,215,077 shares of common stock issued and outstanding as of July 31, 2019 and July 31, 2018,
respectively.
On
November 28, 2017 the Board discussed and agreed to increase the authorized shares from 400,000,000 to 500,000,000 for the purpose
of securing additional resources for anticipated operations. On November 29, 2017 an amendment to the Articles of Incorporation
was filed with the Nevada Secretary of State to increase the authorized shares.
On
January 12, 2018 the Board discussed and agreed to increase the authorized shares from 500,000,000 to 4,000,000,000. Common stock
authorized was changed to 3,500,000,000 and a class of Preferred stock was added with 500,000,000 shares authorized. This change
was implemented for the purpose of securing additional resources and establishing the Preferred stock for merger/acquisition negotiations.
On
August 2, 2018 the Board discussed and agreed to increase the authorized shares from 4,000,000,000 to 7,000,000,000. Common stock
authorized was changed to 6,500,000,000 and a class of Preferred stock was unchanged with 500,000,000 shares authorized. This
change was implemented for the purpose of securing additional resources in preparation for merger/acquisition negotiations.
The
Board authorized stock compensation for Directors of the Company in the August 28, 2017 Directors meeting. The stock was issued
on September 13, 2017. Total number of shares issued for director compensation was twenty million (20,000,000) shares to CEO,
Tom Biscardi, ten million (10,000,000) shares to President, Tommy Biscardi, ten million (10,000,000) shares to CFO, Sara Reynolds
and ten million (10,000,000) shares to Director, William Marlette for a total of fifty million shares (50,000,000). The Board
also authorized stock compensation for the Company’s legal representative The Krueger Group in the amount of ten million
shares (10,000,000). The Company recorded $5,220,000 stock-based compensation during the three months ended October 31, 2017.
On
December 27, 2017, the Board voted to rescind the stock compensation issued on September 13, 2017. Consequently, 47,080,000 shares
issued as stock compensation were cancelled and the corresponding par value of $47,080 was reclassed to additional paid in capital.
During
the year ended July 31, 2018, EMA Financial converted 260,595,950 shares of common stock for a reduction in the principal amount
due of $50,240. The note went into default as of January 19, 2018. Penalties in the amount of $45,232 were assessed upon default
of the note. The balance was $55,042 as of July 31, 2018
During
the year ended July 31, 2018, Auctus Fund converted 348,248,299 shares of common stock for a principal amount due of $59,348 and
settlement of unpaid interest of $7,074, and penalty of $5,000. The note went into default November 18, 2017, Auctus Fund assessed
penalties totaling $20,000 for default and sub-penny penalties. As part of negotiations for final settlement of this note, Auctus
agreed to forgive $5,000 of the penalties that had been assessed. The principal of the note was $13,152 as of July 31, 2018.
During
the year ended July 31, 2018, Power Up Lending converted 941,125,859 shares of common stock for a principal amount due of $60,000
and settlement of unpaid interest of $4,961. The note is paid in full as of July 31, 2018.
During
the year ended July 31, 2018, $35,000 of accrued interest from the related party note was converted to 109,375,000 shares of common
stock. During the year ended July 31, 2018, $20,000 in advances from shareholders was converted to 62,500,000 shares of common
stock. The total shares issued for these conversions was 171,875,000 which had a fair value at conversion of $85,937, and the
Company recorded a loss on debt settlement of $30,937.
During
the year ended July 31, 2019, Auctus Fund converted 948,644,320 shares of common stock for a principal amount due of $46,200 and
settlement of unpaid interest of $6,696, conversion fee of $2,500 and penalty of $10,000. The principal balance of the note as
of April 30, 2019 was $82,316. The note went into default as of May 1, 2019.
During
the year ended July 31, 2019 and 2018, the Company reserved 168,449,182 and 159,941,858 shares of common stock for Veyo Partners,
respectively. This agreement has been terminated and final compensation has been estimated. Fair value of the shares reserved
during the year ended July 31, 2018 and 2019 is $291,456 and $16,845, respectively.
During
the year ended July 31, 2019, EMA Financial converted 461,683,700 shares of common stock for a reduction in the principal amount
due of $40,000 and settlement of unpaid interest of $2,063 and penalties of $2,000. The note went into default as of January 19,
2018. The balance on the note as of July 31, 2019 is $0.
During
the year ended July 31, 2019, Power Up Lending converted 705,286,764 shares of common stock for a principal amount due of $83,000
and settlement of unpaid interest of $4,980. The balance of all notes for Power Up as of July 31, 2019 is $0.
During
the year ended July 31, 2019, the Company rescinded the 10,000,000 shares of stock compensation issued to The Krueger Group in
August 2017. Consequently, the corresponding par value of $10,000 was reclassed to additional paid in capital.
NOTE
6 – DISTRIBUTION AGREEMENTS
The
Company entered into a Distribution Agreement on September 2, 2011 with the Bosko Group providing them a non-exclusive right to
market the sales of its DVD’s. The Distribution Agreement requires the Company to pay the Bosko Group ten percent (10%)
of the selling price of the DVD’s sold. This agreement remained in effect for a period of 4 years and has been automatically
renewed for an additional 4 years with no limit on the number of times the agreement may be automatically renewed, unless either
party gives notice to the other of its desire to terminate the Agreement at least sixty (60) days before expiration of the original
or renewal term.
On
May 2017, the Company entered into two separate agreements (the “Re-Release”) with The Bosko Group LLC (the “Distributor”)
to provide distribution and promotional services to the Company. The terms of the agreements provide for the following.
a.
|
Compensation
to the Company for the Re-Release will be based on projected gross sales range and royalties for six existing DVD documentaries
which will be offered into all distribution markets as a series with a new introduction narrated by Tom Biscardi.
|
|
|
b.
|
Compensation
to the Company for the Distribution of new feature-length films is based on past performance of previous productions with
up-front funding and projected royalties over all distribution channels. The film was edited and released in August 2018 through
various channels.
|
NOTE
7 – COMMITMENTS AND CONTINGENCIES
The
Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of
unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information
known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating
and settling similar matters. As of the date of this report there are no material pending legal proceedings to which the Company
is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental
authorities.
NOTE
8 – INCOME TAXES
On
December 22, 2017, H.R. 1, formally known as the Tax Cut and Jobs Act (the “Act”) was enacted into law. The Act provides
for significant tax law changes and modifications with varying effective dates. The major change that affects the Company is reducing
the corporate income tax rate to 21%.
Deferred
taxes, estimated at 21% of taxable incomes, are provided on a liability method whereby deferred tax assets are recognized for
deductible temporary differences and operating loss and tax credit carry forward 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 be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
Net
operating losses consist of the following components as of July 31, 2019 and 2018:
|
|
July
31, 2019
|
|
|
July
31, 2018
|
|
Net operating loss:
|
|
|
|
|
|
|
|
|
Net
operating loss carryover
|
|
$
|
3,580,447
|
|
|
$
|
3,215,014
|
|
Valuation
allowance
|
|
|
(3,580,447
|
)
|
|
|
(3,215,014
|
)
|
Net operating
loss:
|
|
$
|
-
|
|
|
$
|
-
|
|
A
reconciliation of deferred tax assets with income taxes rates computed at the 21% and 39% statutory rate to the income tax recorded
as of July 31, 2019 and 2018 is as follows:
|
|
July
31, 2019
|
|
|
July
31, 2018
|
|
Net
provision for federal income taxes (benefits):
|
|
|
|
|
|
|
|
|
Deferred
tax assets
|
|
$
|
751,894
|
|
|
$
|
675,153
|
|
Valuation
allowance
|
|
|
(751,894
|
)
|
|
|
(675,153
|
)
|
|
|
$
|
-
|
|
|
$
|
-
|
|
A
reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the income tax benefit actually recognized
for the years ended July 31, 2019 and 2018 is set forth below:
|
|
2019
|
|
|
2018
|
|
Net loss
|
|
$
|
(103,050
|
)
|
|
$
|
(2,508,980
|
)
|
Non-deductible expenses and other
|
|
|
26,309
|
|
|
|
1,291,675
|
|
Effect due to decrease in tax rates
|
|
|
-
|
|
|
|
1,685,851
|
|
Change in valuation
allowance
|
|
|
76,741
|
|
|
|
(468,546
|
)
|
Benefit from income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
As
of July 31, 2019, the Company did not pay any income taxes nor have they paid or accrued any taxes from inception through July
31, 2019.
The
net federal loss carry-forwards of $3,580,447 and $3,215,014 for the year ended July 31, 2019 and 2018, respectively,
will begin to expire in 2034. No tax benefit has been reported in the July 31, 2019 and 2018 consolidated financial statements
since the potential tax benefit is offset by a valuation allowance in the same amount. Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual
limitations. The Company has filed taxes for the year ended July 31, 2019. All of the Company’s income tax years remained
open for examination by taxing authorities.
NOTE
9 – ADVISORY AGREEMENTS
On
November 30, 2017, the Company entered into an Advisory Agreement with Veyo Partners LLC in which Veyo Partners is to provide
financial and other consulting services to the Company. Compensation for this agreement shall be a base fee in the form of common
stock equal to 8% of the outstanding fully diluted shares of the Company and a monthly fee of $10,000 per month which is deferred
until the advisors secure financing of no less than $300,000.
During
the years ended July 31, 2018 the Company issued to Veyo Partners LLC 41,111,111 shares of common stock as partial compensation
for the monthly fee of $10,000 resulting in professional fees of $21,000. The Company also accrued $69,000 for services provided
from November 2017 through July 2018.
The
Company recorded the issuance of
159,941,858 shares of common stock during
the year ended July 31, 2018 as base fee for consulting services, with total value of $291,456. The Company increased this
to 168,449,182 shares of common stock as of July 31, 2019 as the base fee for consulting services, with a total value
of $16,845. The Company also accrued $120,000 in professional fees during the year ended July 31, 2019. The agreement was terminated
on October 23, 2019. Additional fees will be accrued for 90 days following the termination of the agreement.
NOTE
10 – CONVERTIBLE NOTES
On
January 19, 2017, the Company issued a convertible promissory note in the amount of $62,500 to EMA Financial, LLC, a Delaware
limited liability company. This convertible note is due and payable January 19, 2018, has an interest rate of 10% and is convertible
to common stock of the Company at a conversion price equal to the lower of: (i) the closing sale price of the common stock on
the principal market on the trading immediately preceding the closing date of this note, and (ii) 50% of either the lowest sale
price for the common stock on the principal market during the twenty-five (25) consecutive trading days immediately preceding
the conversion date or the closing bid price. The note may be prepaid at 135% - 145% of outstanding principal balance. The note
became convertible on May 23, 2017 and the variable conversion feature was accounted for as a derivative liability in accordance
with ASC 815. During the year ended July 31, 2018, EMA Financial converted 260,595,950 shares of common stock for a reduction
in the principal amount due of $50,240. The note went into default as of January 19, 2018. Penalties in the amount of $45,232
were assessed upon default of the note during the year ended July 31, 2018.
On
August 9, 2018, the Company and EMA Financial (“EMA”) negotiated a settlement agreement for the January 2017 Note.
In the settlement agreement EMA agreed to accept the amount of $40,000 as the current outstanding balance of the January 2017
Note as of the Effective Date. As of the Effective Date, interest will accrue on the January 2017 Note at a rate of ten percent
(10%) per annum, unless the Company breaches any provision or representation in this settlement agreement, or an additional Event
of Default occurs. In the event of default, the conversion price discount shall revert to a 50% discount of either the lowest
sale price for the Common Stock on the Principal Market as defined in the January 2017 Note during the twenty-five (25) consecutive
Trading Days as defined in the January 2017 Note immediately preceding the Conversion Date or the closing bid price, whichever
is lower. EMA imposed an additional $2,000 in penalties during the year ended July 31, 2019. A gain on the settlement agreement
of $15,042 has been recognized for the year ended July 31, 2019. During the year July 31, 2019, EMA Financial converted 461,683,700
shares of common stock for a principal amount due of $40,000, settlement of unpaid interest of $2,063, and penalty of $2,000.
Balance of principal on the note as of July 31, 2018 and July 31, 2019 was $55,042 and $0, respectively.
On
February 27, 2017, the Company issued a convertible promissory note in the amount of $62,500 to Auctus Fund LLC, a Delaware limited
liability company. This convertible note is due and payable on November 28, 2017 with interest of 10% per annum. This note is
convertible at the election of Auctus Fund, LLC after the 120 holding period has expired. In the event of default, the amount
of principal and interest not paid when due bear interest at the rate of 24% per annum and the note becomes immediately due and
payable. Should an event of default occur, the Company is liable to pay 150% of the then outstanding principal and interest. The
note agreement contains covenants requiring Auctus Fund’s written consent for certain activities not in existence or not
committed to by the Company on the issuance date of the note, as follows: dividend distributions in cash or shares, stock repurchases,
borrowings, sale of assets, certain advances and loans in excess of $100,000, and certain guarantees with respect to preservation
of existence of the Company and non-circumvention. This note became convertible on June 27, 2017 and the variable conversion
feature was accounted for as a derivative liability in accordance with ASC 815.
Outstanding
note principal and interest accrued thereon can be converted in whole, or in part, at any time by Auctus Fund, LLC after the issuance
date into an equivalent of the Company’s common stock at a conversion price equal to the lower of: (i) 50% multiplied by
the lowest trading price of the common stock during the previous twenty-five (25) trading day period prior to the date of the
note and (ii) 50% of the lowest trading price of the common stock during the twenty-five (25) trading day period prior to the
conversion date. The Company may prepay the amounts outstanding to Auctus Fund at any time up to the 180th day following
the issue date of this note by making a payment to the note holder of an amount in cash equal to 135% to 145%, multiplied by the
sum of: (w) the then outstanding principal amount of this note plus (x) accrued and unpaid interest on the unpaid principal amount
of this note plus (y) default interest, depending on the time of prepayment. During the year ended July 31, 2018, Auctus Fund
converted 348,248,299 shares of common stock for a principal amount due of $59,348 and settlement of unpaid interest of $7,074,
and penalty of $5,000. During the year ended July 31, 2019, Auctus Fund converted 110,289,820 shares of common stock for a principal
amount due of $3,516 and settlement of unpaid interest of $83, and penalty of $10,000. Auctus imposed additional penalties of
$364 during the year ended July 31, 2019. The note went into default November 18, 2017, Auctus Fund assessed penalties totaling
$20,000 for default and sub-penny penalties. As part of settlement negotiations, Auctus Fund agreed to forgive $5,000 of the penalties
assessed during the year ended July 31, 2018. Balance of the note as of July 31, 2019 and 2018 was $0 and $13,152, respectively.
On
August 28, 2017, the Company issued a convertible promissory note in the amount of $60,000 to Power Up Lending Group LTD, a Virginia
corporation. This convertible note is due and payable on June 10, 2018, has an interest rate of 12% and is convertible to common
stock of the Company, beginning from 180 days following the date of the note, at a conversion price equal to 62% of the average
of the lowest trading price of the common stock during the fifteen (15) trading day period prior to the conversion date. The note
may be prepaid at any time up to 180th day following the issue date of the note for an amount equal to 115% - 140%
of outstanding balance plus unpaid interest. This note became convertible on February 24, 2018 and the variable conversion feature
was accounted for as a derivative liability in accordance with ASC 815. During the year ended July 31, 2018, Power Up Lending
converted 941,125,859 shares of common stock for a principal amount due of $60,000 and settlement of unpaid interest of $4,961.
The note is paid in full as of July 31, 2018.
On
July 5, 2018, the Company entered into a Securities Purchase Agreement (the Securities Purchase Agreement”) with
Power Up Lending (the “Investor”), pursuant to which the Company sold to the Investor convertible promissory note
in the principal amount of $53,000 (the “Note”), for an aggregate purchase price of $53,000. The Note matures
on April 30, 2019, bears interest rate of 12% per year payable on maturity date in cash or shares of common stock at the Company’s
option (subject to certain conditions), and is convertible into shares of the Company’s common stock on January 1, 2019,
at the conversion price equal to 58% of the lowest trading price of the common stock during the 15 trading day period prior to
the conversion date. The note became convertible on January 1, 2019 and the variable conversion feature with a fair value of $36,334
was accounted for as a derivative liability in accordance with ASC 815 with a corresponding charge to debt discount. During the
year ended July 31, 2019, Power Up Lending converted 468,166,666 shares of common stock for a principal amount due of $53,000
and settlement of unpaid interest of $3,180. The balance of the July 2018 note as of July 31, 2018 and July 31, 2019 is $53,000
and $0, respectively.
On
August 3, 2018, the Company entered into a Securities Purchase Agreement (the Securities Purchase Agreement”) with
Power Up Lending (the “Investor”), pursuant to which the Company sold to the Investor convertible promissory note
in the principal amount of $30,000 (the “Note”), for an aggregate purchase price of $30,000. The Company received
$27,000 in cash for this note and recorded $3,000 as issuance cost. The August 2018 Note matures on May 15, 2019, bears interest
rate of 12% per year payable on maturity date in cash or shares of common stock at the Company’s option (subject to certain
conditions), and is convertible into shares of the Company’s common stock on January 30, 2019 at the conversion price equal
to 58% of the lowest sale price for the common stock during the 15 consecutive trading days ending on the latest complete Trading
Day prior to the conversion date. The note became convertible on January 30, 2019 and the variable conversion feature with a fair
value of $20,936 was accounted for as a derivative liability in accordance with ASC 815 with a corresponding charge to debt discount.
During the year ended July 31, 2019, Power Up Lending converted 237,120,098 shares of common stock for a principal amount due
of $30,000 and settlement of unpaid interest of $1,800. The balance of the Note as of July 31, 2019 is $0.
On
August 1, 2018, the Company entered into a Securities Purchase Agreement (the Securities Purchase Agreement”) with
Auctus Fund LLC (the “Investor”), pursuant to which the Company sold to the Investor convertible promissory note in
the principal amount of $110,000 (the “Note”), for an aggregate purchase price of $100,000. The Company received $100,000
cash and recorded $10,000 as issuance cost. The Second August 2018 Note matures on May 1, 2019, bears interest rate of 10% per
year payable on maturity date in cash or shares of common stock at the Company’s option (subject to certain conditions),
and is convertible into shares of the Company’s common stock at the conversion price equal to the lower of (i) the closing
sale price of the common stock on the principal market on the trading day immediately preceding the closing date, and (ii) 55%
of either the lowest sale price for the common stock during the 20 consecutive trading days including and immediately preceding
the conversion date. This note became convertible on issuance date and the variable conversion feature with a fair value of $216,164
was accounted for as a derivative liability in accordance with ASC 815 with a corresponding charge of $115,000 to debt discount
and $101,164 to day one loss on derivative. The Company recorded an increase in the principal of $15,000 since the conversion
price is less than $0.01. During the year ended July 31, 2019, Auctus converted 838,354,500 shares of common stock for a principal
amount due of $42,684, conversion fee of $2,500 and unpaid interest of $6,613. The outstanding balance of principal on the second
August 2018 note as of July 31, 2019 is $82,316. As of May 1, 2019, the note went into default resulting in a default interest
rate of 24%. The Company is pursuing options to pay off the note to prevent further conversions.
On February 25, 2019, the Company
signed a convertible promissory note with Crown Bridge Partners, LLC for a principal sum of $165,000 to be requested in installments.
The first installment of $28,500 was received for the principal of $33,000 on March 1st, 2019. The note is subject
to interest rate of 8% and matures in February 2020. The holder of the note shall have the right to convert the notes at any time,
the note bears interest rate of 8% per year payable on maturity date in cash or shares of common stock at the Company’s
option (subject to certain conditions), and is convertible into shares of the Company’s common stock at the conversion price
which equals 50% multiplied by the lowest one trading price for the common stock during the 25 day trading day period ending on
the last complete trading day prior to the conversion date. The note is convertible on issuance date and the variable conversion
feature with a fair value of $56,216 was accounted for as a derivative liability in accordance with ASC 815 with a corresponding
charge of $28,500 to debt discount and $27,716 to day one loss on derivative. On February 25, 2019, the Company also issued Crown
Bridge Partners LLC a Common Stock Purchase Warrant for 18,857,142 shares of common stock. The warrants have an exercise price
of $0.0035 per share and expiration date of February 25, 2024. These warrants were tainted by the variable notes and the fair
value of $47,063 was accounted for as a derivative liability in accordance with ASC 815. The outstanding balance of the principal
on the note as of July 31, 2019 is $33,000.
In
connection with the above notes, during the year ended July 31, 2019 and 2018, the Company paid deferred financing costs totaling
to $17,500 and $6,000, respectively, which were recorded as a discount to the notes. During the years ended July 31, 2019 and
2018, the Company also recognized a debt discount of $200,770 and $55,614 resulting from the embedded conversion option derivative
liability. The debt discount is amortized over the term of the note. Total amortization expense for the years ended July 31, 2019
and 2018 amounted to $200,107 and $173,405, respectively. Unamortized discount as of July 31, 2019 and 2018 amounted to $18,163
and $0, respectively.
NOTE
11 – RELATED PARTY TRANSACTIONS
Sara
Reynolds has held the positions of Director, CFO, Secretary and Treasurer of the Company and its subsidiary since November 2015.
During that time, she has provided accounting and advisory services without a compensation agreement and has not received compensation
for any of the work performed. The Company has no compensated employees, nor do the Officers have employment or consulting contracts.
C. Thomas Biscardi III was compensated for leading the team during the expeditions. He was classified as contract labor and issued
a 1099 to report his compensation for services. His compensation is recorded in expedition expenses.
NOTE
12 – SUBSEQUENT EVENTS
On
August 1, 2019, Auctus Fund LLC issued a conversion notice for the loan executed on August 1, 2018 to the Company for 204,833,900
shares of common stock for a principal reduction of $2,917, interest of $4,776 and fees of $500.
On
September 5, 2019, Crown Bridge Partners Fund LLC issued a conversion notice for the loan executed February 25, 2019 to the
Company for 215,000,000 shares of common stock for a principal reduction of $6,775 and fees of $750.
On September 23, 2019, the Company entered into a convertible promissory note with KinerjaPay Corp. for an
aggregate purchase price of $20,000. The Note matures on March 23, 2020, bears interest rate of 10% per year payable on maturity
date in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares
of common stock at the conversion rate equal to 50% multiplied by the Market Price. “Market Price” means the average
of the lowest Trading Price (as defined below) for the Common Stock during the thirty (30) Trading Day period ending on the latest
complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing
bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as
reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the
OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the
foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink
sheets”.
On October 31, 2019, the Board of Directors authorized an increase in the authorized stock to 500,000,000
shares Preferred Series A and 19,500,000,000 shares common stock.
On October 31, 2019, pursuant
to the Certificate of Designation, the Company authorized 500,000,000 shares of the Series A Convertible Preferred Stock, which
shall be convertible into shares of common stock of the Company at the option of the holders thereof at any time after the issuance
of the preferred stock. Each Series A Convertible Preferred Stock shall be converted into 24 shares of common stock. The Board
voted to award Tom Biscardi 500,000,000 shares of Preferred Series A stock, of which 50,000,000 shares of Series A convertible
preferred stock were issued in exchange for $50,000 of the debt and 450,000,000 shares of Series A convertible preferred stock
were issued as compensation for his long service to the Company. We determined the fair value of the restricted stock as of the
issuance date based on the market price of $0.0001 for common stock with 1 share of Series A Preferred Stock convertible to 24
shares of common stock, resulting in a fair value of $0.0024 per share. Thus the fair value for 50,000,000 and 450,000,000 shares
of Series A Convertible Preferred Stock is $120,000 and $1,080,000, respectively as of October 31, 2019.
On November 8, 2019, 178,000,000
shares of Preferred Series A Convertible stock were converted to 4,272,000,000 shares of common stock.