Notes to Unaudited Financial Statements
Note 1. Nature of Operations
Company Overview
The operations of Advanced Voice Recognition Systems, Inc. (“AVRS” or the “Company”), http://www.avrsys.com, commenced in 1994 with a predecessor entity called NCC, Inc. NCC, Inc. was incorporated on March 15, 1994 in the State of Ohio. NCC, Inc. operated as a software and hardware development company that marketed voice recognition and transcription products for commercial applications.
In May 2000, WG Investments, LLC acquired the assets of NCC, Inc. and subsequently changed its name to NCC, LLC. NCC, LLC (also a predecessor to AVRS) continued the operations of NCC, Inc. until approximately December 31, 2001, when shifts in the industry’s markets caused NCC, LLC to suspend its operations.
AVRS was incorporated in the State of Colorado on July 7, 2005. In September 2005, the members of NCC, LLC transferred all of their membership interests in NCC, LLC to AVRS in exchange for 93,333,333 shares (post-recapitalization) of AVRS common stock. In December 2005, the Board of Directors approved a 1.5-to-1 stock split issuing 46,666,667 common shares (post-recapitalization), which increased the number of common shares outstanding to 140 million shares (post-capitalization). Following the incorporation of AVRS, the Company initiated a new business plan and intends to continue its operations in the voice recognition and transcription industry.
AVRS is a software development company specializing in speech recognition technologies. AVRS has successfully obtained patent protection of its proprietary technology (refer to Note 3, Intangible Assets). The Company has currently engaged a firm to investigate and assert claims relating to certain patents including negotiating licensing agreements and the filing and prosecution of lawsuits.
Stock Purchase Agreements
During the year ended December 31, 2018 the Company entered into Stock Purchase Agreements for the private sale to five persons or entities of an aggregate of 23,100,000 shares of the common stock for aggregate proceeds of $113,650, full payment of which was received in the period. During the three months ended March 31, 2019, the Company entered into Stock Purchase Agreements for the private sale of an aggregate of 1,800,000 shares of the common stock for aggregate proceeds of $9,000, full payment of which was received in the period.
Commitments and Contingencies
On April 20, 2015 Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Material Letter Agreement with an unrelated third party (“AIP”) in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS. AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP. Interest was accrued and reported at March 31, 2019.
On August 20, 2015, Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a letter agreement with unrelated third party (Third Party) pursuant to which the Third Party will provide strategic advisory services to AVRS to support the common goal of the acquisition, sale, licensing, prosecution, enforcement, and settlement with respect to AVRS’s intellectual property, including patents held by AVRS. The Third Party has agreed to advance costs recommended by it, including court filing fees, discovery and other litigation costs, and patent prosecution costs, up to an aggregate of $10,000,000. AVRS will be responsible for costs not recommended by the Third Party, as well as travel and ordinary business expenses incurred by AVRS. Except for the advanced costs by the Third Party, AVRS will be responsible for any contingency payments to law firms. Any and all advanced costs will only become liabilities if successful. On June 28, 2017 AVRS and the Third Party agreed to terminate the August 20, 2015 Letter Agreement. AVRS did not incur any material early termination penalties in connection of the early termination of the agreement.
On November 1, 2016, Advanced Voice Recognition Systems, Inc. (“
AVRS
”) entered into a Contingent Fee Agreement (the “
Agreement
”) with Legal Representation pursuant to which they will represent AVRS in connection with investigating and asserting claims relating to certain patents, including the negotiation of license agreements and the filing and prosecution of lawsuits, against any potential infringers of rights associated with such patents (the “
Patent Rights
”). Legal representation will handle licensing and litigation activities under the Agreement on a contingent fee basis. The fee will depend upon whether AVRS recovers any sums by way of licensing, settlement, trial or otherwise with respect to the Patent Rights. On June 6, 2017 AVRS and Legal Representation revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Letter Agreement which was to provide advisory services, court filing fees, discovery and other litigation costs. The revised Contingent Fee Agreement assumed the responsibility for the costs and expenses in the Terminated August 20, 2015 Letter Agreement and provides for the payment of twenty percent (20%) of all gross Licensing Agreement Proceeds and thirty percent (30%) of all Litigation Proceeds received by AVRS. In addition if the Litigation Proceeds agreed to or received by AVRS at any time are $100,000 or less then Legal Representative shall receive forty percent (40%) of the Litigation Proceeds.
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On November 6, 2017 Advanced Voice Recognition Systems, Inc (“AVRS”) received notice that Meyers & Associates, LLC filed Complaint number 2017CV32482 in Arapahoe County District Court on October 30, 2017. The Complaint relates to purported legal fees owed by AVRS. On January 31, 2018 AVRS entered into a Settlement Agreement and Promissory Note with Meyers & Associates, LLC. AVRS promises to pay the principal sum of Fifty-Two Thousand Three Hundred Eighty-Five Dollars and Forty-Six Cents ($52,385.46) as well as accrued interest. AVRS shall pay $1,000 per month on the first day of each month beginning February 1, 2018 and continuing through July 1, 2018 and pay all remaining unpaid principal and accrued interest (12% annual) on August 1, 2018. All payments have been made.
On August 1, 2018 AVRS and Meyers & Associates entered into an Agreement to Amend Promissory Note. AVRS shall pay $6,000 on or before August 1, 2018, shall pay $1,500 on the first day of each month beginning September 1, 2018 and continuing through November 1, 2018 and shall pay all remaining unpaid principal and accrued interest on December 1, 2018. All payments have been made.
On November 21, 2018 AVRS and Meyers & Associates entered into a Second Agreement to Amend Promissory Note. AVRS shall pay $20,000 on or before November 21, 2018, shall pay $1,500 on the first day of each month beginning January 1, 2019 and continuing through June 1, 2019 and shall pay all remaining principle and interest on July 1, 2019. The January, February, March and April payments have been paid.
On June 21, 2018, Advanced Voice Recognition Systems, Inc. (“
AVRS
”) and Buether Joe & Carpenter, LLC (“BJC) entered into a Letter of Engagement for Legal Services Limited Scope Agreement (“
Agreement
”) with Schmeiser, Olsen & Watts LLP (“
the Firm
”) pursuant to which the Firm will serve as local counsel in the United States District Court, District of Arizona. The Firm has been hired to represent AVRS as local counsel in connection with forthcoming litigation in the U.S. District Court, District of Arizona. AVRS may terminate the Agreement at any time.
On September 24, 2018, Advanced Voice Recognition Systems, Inc., a Nevada corporation (“AVRS”, “we” or “us”), entered into Promissory Note with Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer, and who serves as a member of our Board of Directors. The Promissory Note is effective as of September 24, 2018 in the principal amount of $9,000 with a maturity date of the Promissory Note September 24, 2019. Interest at 4% per annum was charged and accrued at March 31, 2019. The Company repaid $2500 of the note on December 10, 2018
On February 1, 2019, Walter Geldenhuys advanced the Company $5,000.
Note 2. Significant Accounting Policies
Unaudited Financial Information
The accompanying financial information at March 31, 2019 and for the three months ended March 31, 2019 and 2018 is unaudited. In the opinion of management, all normal and recurring adjustments which are necessary to provide a fair presentation of the Company’s financial position at March 31, 2019 and its operating results for the three months ended March 31, 2019 and 2018 have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2018. The results of operations for the three months ended March 31, 2019 are not necessarily an indication of operating results to be expected for the year ending December 31, 2019.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Liabilities exceed assets and there is a capital deficiency of $224,749 and no significant revenues. The Company may be unable to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. During the twelve months ended December 31, 2018 the Company received an aggregate of $113,650 from the sale of shares in private offerings of its common stock. During the three months ended March 31, 2019 the Company received an aggregate of $9,000 from the sale of shares in private offerings of its common stock.
The Company’s current operations are related to patent monetization and filing of additional patents. The Company has entered into a letter agreement with Dominion Harbor Group, LLC to provide strategic advisory services to AVRS. Dominion has agreed to advanced costs up to an aggregate of $10,000,000. On June 28, 2017 the Company and Dominion agreed to terminate the August 20, 2015 Letter Agreement. The Company did not incur any material early termination penalties. In addition the Company has revised the Contingent Fee Agreement with Buether Joe & Carpenter, LLC which will represent AVRS in connection with investigating and asserting claims to the AVRS patents including licensing and litigation activities. Any and all advanced costs will only become liabilities if successful. On June 6, 2017 AVRS and BJC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement. There is no guarantee that AVRS will be able to provide the capital required for the Company to continue as a going concern.
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Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basis of Consolidation
The consolidated financial statements include our accounts and those of NCC, LLC which merged with and into AVRS, Inc. March 25, 2009. Intercompany transactions and balances have been eliminated. The accounts, results of operations and cash flows of acquired companies are included from their respective acquisition dates.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at March 31, 2019 of $8,861, $17,583 at December 31, 2018 and $8,365 cash at March 31, 2018. No amounts resulted from cash equivalents.
Financial Instruments
The carrying amounts of cash, receivables and current liabilities approximate fair value due to the short-term maturity of the instruments.
Fixed Assets
Fixed assets are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and the tax basis of assets and liabilities for financial and income tax reporting. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future federal income taxes. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740.
Research and Development Costs
Research and development costs are expensed in the period incurred.
Patents, Deferred Costs and Amortization
Patents consist of costs incurred to acquire issued patents. Amortization commences once a patent is granted. Costs incurred to acquire patents that have not been issued are reported as deferred costs. On April 3, 2018 U.S. Patent #9,934,786 entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” was issued by the U.S patent and Trademark Office. Deferred costs of $4,575 were capitalized and amortization began in the period. The Company amortizes its patents over an estimated useful life of twenty years.
Impairment and Disposal of Long-Lived Assets
The Company evaluates the carrying value of its long-lived assets under the provisions of ASC 360-10
Property, Plant, and Equipment
– “Impairment or Disposal of Long Lived Assets” subsections” . ASC 306-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the assets’ carrying amount. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying value or fair value, less costs to sell. The Company’s last impairment analysis was completed effective December 31, 2018. Impairment recorded for each of the three months ended March 31, 2019 and 2018 was $-0-.
Loss per Common Share
9
The Company reports net loss per share using a dual presentation of basic and diluted loss per share. Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents. At March 31, 2019 and 2018, there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.
Fair Value of Financial Instruments
The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.
The FASB Accounting Standards Codification (ASC) clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
|
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
|
|
|
Level 2:
|
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.
|
|
|
Level 3:
|
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Note 3. Intangible and Fixed Assets
Intangible Assets
The Company monitors the anticipated outcome of legal actions, and if it determines that the success of the defense of a patent is probable, and so long as the Company believes that the future economic benefit of the patent will be increased, the Company capitalizes external legal costs incurred in the defense of the patent. Upon successful defense of litigation, the amounts previously capitalized are amortized over the remaining life of the patent.
On July 7, 2009, U.S. Patent # 7,558,730, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 7, 2009 and ending 20 years from the application date of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2009 and the Company began amortization.
On May 24, 2011, U.S. Patent #7,949,534, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning May 24, 2011 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended June 30, 2011 and the Company began amortization.
On March 6, 2012, U.S. Patent #8,131,557, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning March 6, 2012 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended March 31, 2012 and the Company began amortization.
On July 30, 2013, U.S. Patent #8,498,871, entitled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 30, 2013 and ending 20 years from the application date of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2013 and the Company began amortization.
On September 22, 2015, U.S. Patent #9,142,217, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning September 22, 2015 and ending 20 years from the application date of the parent application (US Patent No. 7,558,730) of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2015 and the Company began amortization.
On April 3, 2018, U.S. Patent #9,934,786, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning April 3,
10
2018 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001 or November 27, 2021. The deferred costs were capitalized during the quarter ended June 30, 2018 and the Company began amortization.
Amortization at December 31, 2018 is as follows:
SCHEDULE OF INTANGIBLE ASSETS
|
Ended December 31, 2018
|
|
|
|
|
|
|
|
U.S. Patent #
|
|
|
Carrying Value
|
|
Amortization
|
|
Balance
|
|
7,558,730
|
|
$
|
58,277
|
|
44,574
|
|
13,703
|
|
7,949,534
|
|
|
3,365
|
|
2,426
|
|
939
|
|
8,131,557
|
|
|
5,092
|
|
3,568
|
|
1,524
|
|
8,498,871
|
|
|
21,114
|
|
13,715
|
|
7,399
|
|
9,142,217
|
|
|
35,068
|
|
18,882
|
|
16,186
|
|
9,934,786
|
|
|
4,575
|
|
936
|
|
3,639
|
|
|
|
$
|
127,491
|
$
|
84,101
|
$
|
43,390
|
Amortization at March 31, 2019 is as follows:
|
Ended March 31, 2019
|
|
|
|
|
|
|
|
U.S. Patent #
|
|
|
Carrying Value
|
|
Amortization
|
|
Balance
|
|
7,558,730
|
|
$
|
58,277
|
|
45,747
|
|
12,530
|
|
7,949,534
|
|
|
3,365
|
|
2,504
|
|
861
|
|
8,131,557
|
|
|
5,092
|
|
3,699
|
|
1,393
|
|
8,498,871
|
|
|
21,114
|
|
14,348
|
|
6,766
|
|
9,142,217
|
|
|
35,068
|
|
20,231
|
|
14,837
|
|
9,934,786
|
|
|
4,575
|
|
1,248
|
|
3,327
|
|
|
|
$
|
127,491
|
$
|
87,777
|
$
|
39,714
|
Amortization expense totaled $3,676 and $3,364 for the three months ended March 31, 2019 and 2018. Estimated aggregate amortization expense for each of the next three years is as follows:
SCHEDULE OF FUTURE AMORTIZATION
|
Year ending March 31
,
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|
|
|
|
|
|
|
|
|
|
|
2019
|
|
11,026
|
|
2020
|
|
14,702
|
|
2021
|
|
13,986
|
|
|
$
|
39,714
|
Fixed Assets
Fixed assets were fully depreciated in the period ending December 31, 2018.
PROPERTY PLANT AND EQUIPMENT
|
|
|
|
December 31,
2018
|
|
|
|
|
|
|
Computer equipment
|
|
$
|
6,627
|
|
Computer software
|
|
|
3,640
|
|
|
|
|
10,267
|
|
Less accumulated depreciation
|
|
|
(10,267)
|
|
Property and Equipment, Net
|
|
$
|
0
|
11
|
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
Computer equipment
|
|
$
|
6,627
|
|
$
|
6,627
|
|
Computer software
|
|
|
3,640
|
|
|
3,640
|
|
|
|
|
10,267
|
|
|
10,267
|
|
Less accumulated depreciation
|
|
|
(10,267)
|
|
|
(10,267)
|
|
Property and Equipment, Net
|
|
$
|
0
|
|
$
|
0
|
Note 4. Related Party Transactions
Related Parties Transactions and Indebtedness
During the years from 2000 through 2013, certain officers advanced the Company working capital to maintain the Company’s operations. The Company owed the officers $6,500 and - at March 31, 2019 and 2018 respectively. The Company also owed the officers aggregate of $162,382 at March 31, 2019 and December 31, 2018 for accrued payroll. During the period of three months ending March 31, 2019, and March 31, 2018 the Company paid gross payroll of $69 and $69 to the CEO and for payroll expenses. On September 24, 2018, Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer, and who serves as a member of our Board of Directors loaned the Company $9,000. On February 1, 2019 Walter Geldenhuys advanced the Company $5,000. During the three month period ending March 31, 2019, AVRS completed Stock Purchase Agreements totaling 1,800,000 shares of AVRS stock to three shareholders. All shares were paid in the period ending March 31, 2019, for a total amount of $9,000. At period ending March 31, 2019, one shareholder owned 5.22% of the issued and outstanding stock.
Note 5. Income Taxes
A reconciliation of the U.S. statutory federal income tax rate to the effective rate is as follows.
INCOME TAXES
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
|
|
|
|
|
|
U.S. federal statutory graduated rate
|
*
|
21.00%
|
|
21.00%
|
|
State income tax rate, net of federal benefit
|
|
0.00%
|
|
0.00%
|
|
Contributed services
|
|
0.00%
|
|
0.00%
|
|
Costs capitalized under Section 195
|
|
-21.00%
|
|
-21.00%
|
|
Effective rate
|
|
0.00%
|
|
0.00%
|
The Company is considered a start-up company for income tax purposes. As of March 31, 2019, the Company had not commenced its trade operations, so all costs were capitalized under Section 195. Accordingly, the Company had no net operating loss carry forwards at March 31, 2019.
Note 6 . Concentration of Risk
Beginning March 31, 2010, through March 31, 2019, all noninterest-bearing transaction accounts are fully insured, regardless of the balance of $250,000, at all FDIC-insured institutions. On March 31, 2019, the Company had cash balances at one FDIC insured financial institution of $8,861 in non-interest bearing accounts that were fully insured by the FDIC.
Note 7.
Note Payable & Accounts Payable
On April 20, 2015 Advanced Voice Recognition Systems, Inc. (AVRS) entered into a Material Letter Agreement with an unrelated third party (“AIP” in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS. AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP. Interest was accrued and reported at March 31, 2019.
On January 31, 2018 AVRS entered into a Settlement Agreement and Promissory Note with Meyers & Associates, LLC. AVRS promises to pay the principal sum of Fifty-Two Thousand Three Hundred Eighty-Five Dollars and Forty-Six Cents ($52,385.46) as well as accrued interest. AVRS shall pay $1,000 per month on the first day of each month beginning February 1, 2018 and continuing through July 1, 2018 and pay all remaining unpaid principal and accrued interest (12% annual) on August 1, 2018. All payments have been paid.
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On August 1, 2018 AVRS and Meyers & Associates entered into an Agreement to Amend Promissory Note. AVRS shall pay $6,000 on or before August 1, 2018, shall pay $1,500 on the first day of each month beginning September 1, 2018 and continuing through November 1, 2018 and shall pay all remaining unpaid principal and accrued interest on December 1, 2018. All payments have been made.
On November 21, 2018 AVRS and Meyers & Associates entered into a Second Agreement to Amend Promissory Note. AVRS shall pay $20,000 on or before November 21, 2018, shall pay $1,500 on the first day of each month beginning January 1, 2019 and continuing through June 1, 2019 and shall pay all remaining principle and interest on July 1, 2019. The January, February, March and April payments have been paid.
On September 24, 2018, the Company entered into a Promissory Note with Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer, and who serves as a member of our Board of Directors. The Promissory Note is effective as of September 24, 2018 in the principal amount of $9,000 with a maturity date of September 24, 2019. Interest at 4% per annum was charged and $113.00 accrued at March 31, 2019. On December 10, 2018 the Company repaid $2,500 leaving a balance of $6,500.
On February 1, 2019, Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer advanced the Company $5,000.
Note 8.
Stockholder Equity / (Deficit)
The Company has issued shares of its common stock pursuant to certain agreements as described in Note 1.
Note 9 . Subsequent Events
On April 5, 2019 the Company entered into a Stock Purchase Agreement for the private sale to one person or entity an aggregate of 6,000,000 shares of the common stock for aggregate proceeds of $30,000, full payment of which was received in the period.
13