UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-K
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ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
fiscal year ended December 31, 2019
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or
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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For the
transition period from ______ to ______
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Commission file
number: 000-52490
BEYOND
COMMERCE, INC.
(Exact name of
registrant as specified in its charter)
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Nevada
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98-0512515
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(State of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3773 Howard
Hughes Pkwy, Suite 500
Las Vegas,
Nevada, 89169
(Address of
principal executive offices, including zip code)
(702)
675-8022
(Registrant’s
telephone number, including area code)
(For name,
former address and former fiscal year, if changed since last
report)
Securities registered pursuant to Section 12(b) of the
Act:
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None
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None
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None
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(Title of
each class)
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Trading
symbol(s)
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(Name of each
exchange on which registered)
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Securities
registered pursuant to section 12(g) of the
Act: None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes
x No¨
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange
Act. Yes ¨ Nox
Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
¨
Indicate by check mark whether the registrant has submitted
electronically every interactive data file required to be submitted
pursuant to rule 405 of Registration S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
¨ No x
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant’s knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ¨
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. Check one:
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Large
accelerated filer ¨
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Accelerated Filer ¨
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Non-accelerated filer ¨
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Smaller
reporting company x
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Emerging growth company ☐
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes
¨ No x
As of
March 31, 2020, there were 1,627,914,678 shares of the registrant’s
common stock outstanding.
BEYOND
COMMERCE, INC.
FORM 10-K FOR
THE YEAR ENDED
December 31,
2019
Table of
Content
SIGNATURES
Table
of Contents
Certain statements made in this Annual Report involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The
forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. Our
plans and objectives are based, in part, on assumptions involving
judgments with respect to, among other things, future economic,
competitive and market conditions, technological developments
related to business support services and outsourced business
processes, and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond our control.
Although we believe that our assumptions underlying the
forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance
that the forward-looking statements included in this report will
prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein
particularly in view of the current state of our operations, the
inclusion of such information should not be regarded as a statement
by us or any other person that our objectives and plans will be
achieved. Factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements include, but are not limited to, the factors set forth
herein under the headings “Business,” and “Risk Factors”.
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of Contents
PART
I
ITEM 1.
BUSINESS
Beyond Commerce, Inc. was formed in
the State of Nevada on January 12, 2006. The Company is
currently no longer a “shell company” within the meaning of Rule
405, promulgated pursuant to the Securities Act of 1933, as amended
(the “Securities Act”), because we have both significant assets and
operations generating revenue through the Company’s acquisitions of
Service 800, Inc, PathUX, and IdriveYourCar.
We
currently operate within two markets: (1) the Business-to-Business
Internet Marketing Technology and Services market and (2) the
Information Management market. Our goal is to develop proprietary
software for digital transformation of clients’ existing content.
We believe our planned platform, strategy, and suite of software
products and services will provide secure and scalable information
control solutions for global companies. We believe our planned
software will assist organizations in finding, utilizing, and
sharing business information between devices in ways that are
intuitive, efficient and productive. We believe that our business
model will ensure that information will remain secure and private,
as necessitated by the current market climate.
In
addition, BYOC plans to provide solutions which facilitate the
exchange of information and data transactions between supply chain
participants, such as manufacturers, retailers, distributors and
financial institutions. The goal is to automate potential client
internal processes thereby increasing productivity and lowering
costs. BYOC plans to develop proprietary algorithms which it will
embed in its planned software to enable clients to access data and
gain insight into their business, through that data, leading to
improved internal decision making.
BYOC
plans to offer the proposed software through traditional on-premise
solutions, Software as a Service (“SaaS”), as a cloud-based
solution, or a combination of on-premise, SaaS or cloud based
solutions. We will work with our clients and their needs as to
which delivery method they prefer. We believe giving clients a
choice and flexibility will help us to obtain long-term client
value.
Corporate History
and Background
Beyond Commerce was incorporated under the laws of the State of
Nevada on, January 12, 2006, under the name “Reel Estate Services,
Inc.” for the purposes of operating as a media hub for high traffic
web properties, utilizing social networking and e-commerce.
On
December 28, 2007, the Company entered into an agreement and plan
of reorganization with its former shareholder and former sole
officer and director, BOOMj.com, Inc. (“BOOMj”), and Time Lending
Sub, Inc., a subsidiary of the Company (“Sub”) pursuant to which
Sub merged with and into BOOMj. As a result of the merger,
the business of BOOMj became the business of the Company. BOOMj
operated as a multi-faceted niche portal and social networking site
targeting baby boomers and the Generation Jones demographics.
Subsequently on January 14, 2008, the Company changed its name to
“BOOMj, Inc.”
BOOMj’s operations migrated into an e-commerce platform known as
i-SUPPLY, an online storefront that offered easy to use, fully
customizable e-commerce services, and revenue solutions for any
third-party website large or small, and hosted local ads, providing
extensive reach for our proprietary advertising partner network
platform. On February 23, 2009, the Company changed its
name to “Beyond Commerce, Inc.” and its ticker symbol to “BYOC” in
order to better reflect its business strategy.
During the third quarter of 2009 the Company formed another
subsidiary, KaChing KaChing, Inc., a Nevada corporation
(“KaChing”). KaChing operated an e-commerce platform which
provided a complete turn-key e-commerce solution to third-party
store owners. KaChing allowed individual online store owners the
ability to create, manage and earn money from product sales
generated from their individual webstores. On April 22, 2010,
KaChing merged out of the Company and into Duke Mining Company,
Inc. to become a new public company.
As a
result of the merger transaction, KaChing ceased to be a
wholly-owned subsidiary, and BYOC’s interest in the outstanding
capital stock of KaChing was reduced to 20.8%. On April 17,
2013 Beyond Commerce’s ownership in KaChing was transferred back to
Benjamin Mayer of the firm Mayer & Associates. During 2015, the
Company wrote off its entire ownership stake in KaChing as a tax
loss carry-forward.
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On
October 9, 2009, LocalAdLink Inc., a wholly-owned subsidiary of the
Company (“LocalAdLink”) sold its LocalAdLink Software (the
“Software”) and all of their related assets, including the rights
to the name LocalAdLink, the LocalAdLink trademark, the website
domain “www.LocalAdLink.com” and a local search directory and
advertising network that brings local advertising to geo-targeted
consumers. The Company continued to sell advertising services
as it had prior to the inception of LocalAdLink, on a different
scale and with a greater emphasis on business-to business sales.
As of December 31, 2017, the Company decided to close and
remove this subsidiary from its financials going forward.
During the second quarter 2010, the Company entered into a share
exchange agreement with all of the shareholders of Adjuice, Inc.
(“Adjuice”), an online media and marketing company. Pursuant
to the agreement, the Company issued 5,100,000 shares of its common
stock in exchange for all of the issued and outstanding stock of
Adjuice. The purchase of this transaction was to enhance the
Company’s presence in the Ad Networking business. The Adjuice
network distributed leads to over 350 retail clients along seven
major sales verticals, all offering top payouts. Adjuice owned and
managed over 120 sites, all optimized for brand recognition and
conversion performance. Adjuice had a solid infrastructure
for selling its own products, targeting advertisers, publishers and
their related downstream partners with Adjuice’s tailored lead
generation programs. As of December 31, 2017, the Company decided
to close and remove this subsidiary from its financials going
forward.
On
March 31, 2011, the Company acquired AIM Connection, Inc., a
leading direct sales affiliate, SEO provider, social network and
website generator. AIM Connection combines Internet marketing
techniques and automation software, and allows all aspects of the
marketing process to be controlled and managed by the client. As of
December 31, 2017, the Company decided to close and remove this
subsidiary from its financials going forward.
On
July 28, 2011, a judgement with civil case number:
2:08-cv-00496-KJD-LRL was entered in favor of George Pursglove, the
Company’s former CEO, from his counter suit against BOOMj.com, a
wholly-owned subsidiary of Beyond Commerce, Inc. The judgement was
in the amount of $20,775 for damages as to the claim for failure to
pay wages, $3,000,000 for damages as to the conversion claim and
$3,000,000 for punitive damages for a total of $6,020,775 (the
“July Judgment”). The July Judgment accrues interest at a rate of
5.29% per annum. As of December 31, 2019, the total amount of
principal and interest that was forgiven $8,360,244.
In
2017, the Company reevaluated the commercial viability of its
previous operations of all of the aforementioned subsidiaries and
determined that many of these businesses were no longer viable. The
Company discontinued the operations of the aforementioned
subsidiaries as of December 31, 2017.
On
April 27, 2017, the Company held a Special Meeting of Stockholders
where the stockholders approved and ratified, among other things:
(i) the reinstatement of Beyond Commerce with the Secretary of
State of the State of Nevada and the appointment of Mr. Pursglove
as sole director; and (ii) the exchange of a portion of the July
Judgment against Beyond Commerce into shares of common stock of the
Company
On
May 1, 2017, the Company issued Mr. Pursglove 1,556,632 shares of
common stock, par value $0.001 per share, reducing the July
Judgment by $12,453. On the same date, the Company authorized
the designation of its “blank check” preferred stock, par value
$0.001 per share, as Series A Convertible Preferred Stock (the
“Series A Preferred Stock”).
Effective July 27, 2017, the Company filed a certificate of
designation with the Secretary of State of the State of Nevada,
pursuant to which it designated the Series A Preferred Stock. Each
share of Series A Preferred Stock is convertible into one share of
common stock. In addition, each share of Series A Preferred
Stock entitles its holder to (i) cumulative, non-participating
dividends in preference and priority to any declaration or payment
of a dividend on any of the Company’s common stock, at a rate of
12% per annum, and (ii) three times (3x) voting preference over
common stock. On the same date, the Company issued
250,000,000 shares of its Series A Preferred Stock to Mr.
Pursglove, further reducing the award under the July Judgment owed
to Mr. Pursglove by $250,000.
On
February 13, 2018, we entered into a financial advisory agreement
with Maxim Group, LLC, a leading full-service investment banking,
securities and wealth management firm (“Maxim”), pursuant to which
Maxim will provide certain advisory services, including strategic
corporate planning, financial advisory and investment banking
services. On May 31, 2018, we entered into a separate financial
advisory agreement with Maxim, which effectively expanded the
arrangement to include Maxim’s provision of mergers and
acquisitions services, to include the sourcing of and negotiation
with potential targets. Pursuant to the agreement, Maxim will
assist in BYOC’s global expansion plan, and accelerate product
growth and innovation. Additionally, Maxim, will among other
things, assist the Company in its efforts to become
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a fully reporting company under Securities and
Exchange Commission guidelines and also advise the Company with
respect to its efforts to list on a national securities
exchange.
On
March 4, 2019 the Company filed a Form 8-K; wherein, the company
announced the completion of the business combination between Beyond
Commerce, Inc and Service 800, Inc. Service 800 operates as a
premium provider of Customer Feedback Management Platforms to their
Fortune 500 and 1000 clients on a global basis. Service 800
provides survey authoring, response rates, feedback types and data
analysis on their proprietary, cloud based, automated and
centralized platform. Service 800 has currently 40 full time
employees that provide services to 130 companies and 300 service
organizations. Service 800’s current operations and strategic
business plan is to further develop its marketing and Customer
Experience platform to use within the framework of its current
Fortune 500 and 1000 clients.
On March
17, 2019 announced that its Chief Executive Officer, George
Pursglove had unexpectedly passed away. Although Mr. Pursglove was
no longer here to lead BYOC, his vision and the direction that the
Company was pursuing is to continue in earnest through the efforts
of then President of the Company, Geordan Pursglove, as well its
competent and sophisticated directors. Subsequently Geordan
Pursglove became Beyond Commerce Chairperson and CEO
On May 31, 2019 the
Company closed the acquisition of PathUX, LLC. PathUX provides
Cloud-based marketing automation software.
On
December 31, 2019, TCA Beyond Commerce, the Company’s
affiliate entered into a Membership Interest Purchase Agreement, to
acquire 100% of the authorized and issued membership interests of
Customer Centered Strategies, L.L.C. (CCS), a Minnesota limited
liability company from its sole member. CCS is a boutique
consulting firm focusing on the value of the customer process
optimization and how the consolidation of other functional groups
solve problems and improve the customer experience.
Business Overview
and Strategy
We
plan to focus on the acquisition of "big data" companies in the
Business-to-Business (“B2B”) Internet Marketing Technology and
Services (“IMT&S”) market and the Information Management (“IM”)
market.
Market Dynamics IMT&S Segment
Market Opportunity: the B2B IMT&S industry is a
highly fragmented $345.5 billion global market, with $195 billion
derived from the United States, according to the December 2017
Magna Advertising Forecasts Winter Update.
§INTEGRATED SEARCH: Data from IBISWorld Search Engines
– US Market Research Report, November 2017, indicates that the
revenue for this sector was approximately $60 billion last year
following five years of 8.8% average growth.
§MARKET RESEARCH: this global industry segment generated
$44.5 billion in revenues last year, as reported from data derived
from Statista Business Services – Market Research Industry --
Statistics.
§BUSINESS BIG DATA ANALYTICS: Industry wide revenues were
$122 billion in 2015 with projected revenues reaching $187 Billion
by 2019 according to InformationWeek’s Big Data.
§INTERNET PUBLISHING AND BROADCASTING: $119 billion in
revenues were generated last year following annual growth of 14.8%
over the previous five years, as shown by data provided by
IBISWorld Search Engines – US Market Research Report, November
2017.
Our
business objective is to develop, acquire, and deploy disruptive
strategic software technology and market-changing business models
through selling our own products and the acquisitions of existing
companies. We plan to offer a cohesive digital product and services
platform to provide our future clients with a single point of
contact for all their IMT&S and IM initiatives.
Products and
Services Overview
Our
goal is to help companies and organizations derive value from their
information. To do this, we intend to offer services and solutions
such as Content Services, Business Process Management, Customer
Experience Management, Discovery, Business Network, and
Analytics.
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With
our planned products and services, we plan to deliver our customers
the following:
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(i)
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Increased compliance
and information governance resulting in reduced exposure to risk of
regulatory sanctions related to how information is handled and
protected;
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(ii)
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Improved operating
efficiency through process digitization and automation;
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(iii)
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Better customer
engagement through improved and integrated digital experiences and
content delivery;
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(iv)
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Lower cost of
electronic storage and management of information through improved
classification and archiving strategies;
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(v)
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Reduced
infrastructure costs due to, among other factors, legacy
decommissioning capabilities of BYOC and cloud and hosted services
deployment models;
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(vi)
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Improved innovation,
productivity and time-to-market as a result of letting employees,
trading partners and customers work with information and
collaborate in ways which are intuitive, automated, and flexible;
and
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(vi)
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Increased revenue
streams with the enablement of easy expansion across new channels
and, ultimately, new markets.
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Content
Services
We
plan to facilitate content services with an integrated set of
technologies to allow customers to manage information throughout
the content services lifecycle and improve business productivity,
all while mitigating the risk and controlling the costs of growing
volumes of data. We intend to make our content services solutions
available via on-premise, SaaS and increasingly cloud-based
solutions, which will include next-generation SaaS platform for
content services. The proposed SaaS platform will be comprised of a
set of consumer-grade, end-user productivity applications that
enable users to access, share, create and collaborate on content,
across any device.
Business Process
Management (BPM)
We
believe our planned BPM solution will provide software capabilities
for analyzing, automating, monitoring and optimizing structured
business processes that typically fall outside the scope of
existing enterprise systems. We believe our envisioned BPM
solutions will help empower employees, customers and partners.
Our
proposed BPM solutions will include 260 Process Suite and 260
Process Suite Solutions.
●260 Process Suite will place businesses in direct control
of its processes and fosters alignment between business and
Information Technology (IT), resulting in tangible benefits for
both. Our Process Suite will provide a single platform that can be
accessed simply through a web browser and is built from the ground
up to be truly multi-tenant and support all of the deployment
models required for on-premise, private or public
clouds.
●260 Process Suite Solutions will be packaged applications
built on the Process Suite and address specific business problems.
For some of these solutions, we plan to include several
applications, including Contract Management, Cloud Brokerage
Services, Digital Media Supply Chain, and the Enterprise App
Store.
Customer Feedback
Management (CFM)
We
believe our planned CFM solutions will generate improved
time-to-market by giving customers, employees, and channel partners
personalized and engaging experiences.
We
intend our proposed CFM solutions will include:
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●Web Content Management, which we believe will provide
software for authoring, maintaining, and administering websites
designed to offer a “visitor experience” that integrates content
from internal and external sources.
●Digital Asset Management, which we believe will provide a
set of content management services for browsing, searching,
viewing, assembling, and delivering rich media content such as
images, audio and video.
●Customer Communications Management Software, which we
believe will make it possible for organizations to process and
deliver highly personalized documents in paper or electronic format
rather than a “one message fits all” approach.
●Social Software, which we believe will help companies
“socialize” their web presence by adding blogs, wikis, ratings and
reviews, and build communities for public websites and employee
intranets.
●Portal, which we believe will enable organizations to
aggregate, integrate and personalize corporate information and
applications and provide a central, contextualized, and
personalized view of information for executives, departments,
partners, and customers.
Customer
Experience (“CX”)
We
believe our planned CX solutions will help customers organize and
visualize all relevant content to enable business users to quickly
locate information in order to make better-informed decisions based
on timely, contextualized information.
Our
proposed CX solutions shall include:
●Search, which we plan to address information security and
productivity requirements by securely indexing all information for
fast retrieval and real-time monitoring.
●Smart Navigation, which we plan to help improve the
end-user experience of websites by enabling intuitive visual
exploration of site content through contextual
navigation.
●Auto-Classification, which we plan to help improve the
quality of information governance through intelligent metadata
extraction and accurate classification of
information.
●CX Silos, which we believe will make it possible for
organizations to deal with the issue of so-called “information
silos” resulting from, for instance, numerous disconnected
information sources across the enterprise. Using a framework of
adapters, an information access platform allows organizations to
consolidate, decommission, archive and migrate content from
virtually any system or information repository.
Business Network (BN)
Our proposed BN solution will be a set of offerings that facilitate
efficient, secure, and compliant exchange of information inside and
outside the enterprise.
Our proposed BN solutions will include:
●Business-to-Business (B2B) Integration services that help
optimize the reliability, reach, and cost efficiency of an
enterprise's electronic supply chain while reducing costs,
infrastructure and overhead.
●Secure Messaging helps to share and synchronize files
across an organization, across teams and with business partners,
while leveraging the latest smartphones and tablets to provide
information on the go without sacrificing information governance or
security.
BYOC
Analytics
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We
believe our proposed BYOC Analytics solutions in which we plan to
develop will help organizations gain insight from their structured
and unstructured data, make predictions, visualize and report on
business processes, customer interactions and a myriad of other
sources of information. This analytical data can then be used to
refine business processes or content utilization, make predictions,
identify trends, improve customer service or be applied in a
multitude of different scenarios.
Our
planned BYOC Analytics solutions include:
●Embedded Reporting and Visualization which will be used to
embed reports and visualizations of data in an array of
applications, including the BYOC EIM Suites and many third-party
data sources.
●Big Data Analysis is the analysis of large sets of
information from databases, files, Enterprise Resource Planning
(ERP) and Customer Relationship Management (CRM) systems and a
variety of other sources. Our planned modeling and predictive
algorithms may be applied to this data using BYOC solutions to
extract meaningful insight or predictive models to solve customer
problems or help with operational insight.
Our Business
Strategy
Growth
We
plan to grow our business and strengthen our future service
offerings in the IMT&S market through product development
strategic acquisitions and integration. We plan to be a
value-oriented and disciplined acquirer. Currently we are in the
process of identifying potential acquisitions of companies in the
IMT&S markets. In this regard, on December 14, 2017, we
entered into an agreement with Service 800 and the sole shareholder
of Service 800 (the “Shareholder”), and on March 4, 2019 we
purchased all of the issued and outstanding shares of common stock
of Service 800 from the Shareholder (the “Transaction”).
Service 800 operates as a premium provider of Customer
Feedback Management Platforms to their Fortune 500 and 1000 clients
on a global basis. Service 800 provides survey authoring, response
rates, feedback types and data analysis on their proprietary, cloud
based, automated and centralized platform. Service 800 has
currently 40 full time employees that provide services to 130
companies and 300 service organizations. Service 800’s current
operations and strategic business plan is to further develop its
marketing and Customer Experience platform to use within the
framework of its current Fortune 500 and 1000 clients. While
acquiring companies that operate complementary businesses will be
one of our leading growth drivers, our growth strategy also
includes product and software innovation. We plan to create
sustained value by expanding distribution and adding value through
up-selling and cross-selling across our planned multiple
proprietary marketing platforms to our future customers.
We
plan on acquiring operating companies that will help us provide a
well-rounded product line to our future customers. We believe
that such acquisitions will be our primary driver to growth,
similar to high-performing conglomerates. By focusing on
these acquisitions and the integration of niche businesses, we
believe this will be well-positioned to create a streamlined
platform, which we believe will allow us to offer our future
clients a full suite of software solutions and technology
services.
We
have developed a philosophy, which we refer to as “The Beyond
Commerce Business System.” Our philosophy is designed to create
value by leveraging a clear set of operational mandates for
integrating newly acquired companies and assets. We believe we have
the ability to successfully integrate acquired companies and assets
into our business given the background and experience of our Chief
Executive Officer and the members of our Board of Directors.
We believe pursuing strategic acquisitions is an important
aspect to our planned strategy. However, no assurance can be given
that we will be successful in consummating such acquisitions or
that we will be successful in realizing anticipated strategic
benefits of such acquisitions.
Funding
Agreements
On
March 28, 2018, we entered into a securities purchase agreement
with Iliad Research and Trading, L.P. (“Iliad”) pursuant to which
we secured a seventeen (17) month non-dilutive bridge loan in the
principal amount of $1,000,000 (of which $100,000 would be retained
by Iliad as an original issue discount), consisting of six tranches
of funding, with the initial tranche consisting of a promissory
note in the principal amount of $100,000 and each subsequent note
equal to $150,000. Upon execution of the agreement, we
received from Iliad an initial payment of $50,000. The notes
each had a maturity of seventeen (17) months from the date of
issuance, an interest rate of 10% per annum, and were convertible
into shares of common stock at a price of $0.15 per share.
The agreement also provided that Iliad would be issued seven
(7) warrants to purchase shares of common stock, par value $0.001
per share. In addition, if at the
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Company’s option it decided to repay the loan with
shares of its common stock, the conversion price adjusted to 65% of
the lowest trading price on the primary trading market on which the
Company’s common stock is then-listed for the twenty (20) trading
days immediately prior to conversion. The notes could be
prepaid, but carry a penalty in association with the remittance
amount, as there is an accretion component to satisfy the
outstanding balance with cash. On August 31, 2018, we paid
$197,918 to Iliad to settle the outstanding balance, consisting of
pre-payment penalty principal and interest. The Company is
currently negotiating a settlement with Iliad with respect to a
warrant.
On
June 14, 2018, the Company issued a 15% senior convertible
promissory note in the principal amount of $50,000. This note
has a maturity of eight (8) months and is convertible into shares
of common stock, par value $0.001 per share, of the Company at a
price of $0.10 per share. As inducement for the note, the
Company issued 825,000 shares of restricted common stock, par value
$0.001 per share, to the noteholder. The Company is currently
negotiating an extension with the note holder.
On
August 7, 2018, we entered into a securities purchase agreement
(“SPA”) with Discover Growth Fund, LLC (“Discover”), pursuant to
which we issued a senior secured redeemable convertible debenture
in the principal amount of $2,717,391 (of which $217,391 was
retained by Discover as an original issue discount) (the
“Debenture”), in exchange for $500,000 cash consideration and a
promissory note issued by BYOC in the amount of $2,000,000 (the
“Note”). Pursuant to the terms of the SPA, we issued to
Discover a warrant to purchase up to 16,666,667 shares of our
common stock, exercisable beginning on the six (6) month
anniversary from the date of issuance for a period of three (3)
years at an exercise price of $0.15 per share (the “Warrant”).
The Debenture is subject to interest at a rate of 8.0% per
annum and be converted into shares of the Company’s common stock at
a price equal to the lower (i) $0.15 per share of common stock, and
(ii) if there has never been a trigger event (as defined in the
Debenture), (A) the average of the 5 lowest individual trades of
the shares of common stock, less $0.01 per share, or following any
such trigger event, (B) 60% of the foregoing. Further,
pursuant to the SPA we agreed to issue 2,500,000 shares of our
common stock to Discover at close of the transaction, and that
Discover would fund $2,000,000 in cash upon effectiveness of The
Company’s registration statement, which occurred on February 8,
2019. The Discover transaction closed on August 16, 2018. We
issued 2,500,000 shares of common stock to Discover in 2019.
On
February 12, 2019, after effectiveness of its registration
statement the Company entered into the second tranche of funding
from the Discover Growth Fund, LLC for $2,000,000 of which funds
were utilized in the cash component of the Service 800, Inc
transaction.
On
December 31, 2019, Beyond Commerce, Inc., a Nevada corporation (the
“Company”), entered into a securities purchase agreement (the
“Securities Purchase Agreement”) with TCA Special Situations Credit
Strategies ICAV, an Irish collective asset vehicle (the “Buyer” or
“TCA ICAV”), and TCA Beyond Commerce, LLC, a Wyoming limited
liability company (“TCA Beyond Commerce”), pursuant to which the
Buyer purchased from the Company a senior secured redeemable
debenture having an initial principal amount of $900,000 and an
interest rate of 16% per annum (the “Initial Debenture”).
Additional Debentures may be issued and funded, subject to and upon
the approval of the Company and the Buyer, provided that the total
value of the Initial Debenture and the Additional Debentures
together shall not exceed $5,000,000.
Potential
Product Revenues
Our
forecasted business will consist of four revenue streams: (1)
software license; (2) cloud services and subscriptions; (3)
customer support; and (4) professional services.
License
Our
forecasted license revenues will consist of fees earned from the
licensing of software products to our future customers. We believe
that license revenues will be impacted by the strength of general
economic and industry conditions, the competitive strength of our
future software offerings, and our potential acquisitions. A
potential customer’s decision to license our software products
often involves a comprehensive implementation process across the
customer’s network or networks and the licensing and implementation
of our planned software products may entail a significant
commitment of resources by prospective customers.
Cloud Services
and Subscriptions
Our
forecasted cloud-based services and subscription revenues will
consist of (i) software as a service offerings, (ii) managed
service arrangements and (iii) subscription revenues relating
to on-premise offerings. We believe these
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offerings will allow our potential customers to
transmit a variety of content between various mediums and to
securely manage enterprise information without the commitment of
investing in related hardware infrastructure.
In
addition, we plan to offer B2B integration solutions, such as
messaging services, and managed services. Messaging services will
(i) allow for the automated and reliable exchange of electronic
transaction information, such as purchase orders, invoices,
shipment notices and other business documents, among businesses
worldwide, and (ii) provide an end-to-end fully outsourced B2B
integration solution to our customers, including program
implementation, operational management, and customer support. We
believe these planned services will enable customers to effectively
manage the flow of electronic transaction information with their
trading partners and reduce the complexity of disparate standards
and communication protocols.
Customer
Support
We
plan on integrating our proposed customer support offering to
customers together with the purchase of a license of our future
enterprise information management software products. This customer
support will typically renew on an annual basis; customer support
revenues will be a sizeable portion of total revenue, as they are
with our many of our competitors. Through our planned customer
support programs, customers will receive access to software
upgrades, a knowledge base, discussions, product information, and
an online mechanism to post and review trouble issues.
Additionally, our planned customer support teams will handle
questions on the use, configuration, and functionality of our
products and can help identify software issues, develop solutions,
and document enhancement requests for consideration in future
product releases.
Professional
Service and Other
We
plan to provide consulting and learning services to customers and
generally these services will relate to the implementation,
training and integration of our licensed product offerings into the
customer's systems.
We believe our planned consulting services will help customers
build solutions that will enable them to leverage their investments
in our technology and in existing enterprise systems.
Implementation of these services will range from simple
modifications to meet specific departmental needs to enterprise
applications that will integrate with multiple existing
systems.
We
plan to have our learning services advisors analyze our future
customers' education and training needs, focusing on key learning
outcomes and timelines, with a view to creating an appropriate
education plan for the employees of our customers who work with our
products. We plan to design flexible education plans that can be
applied to any phase of implementation: pilot, roll-out, upgrade or
refresher. Our learning services will employ a blended approach by
combining mentoring, instructor-led courses, webinars, eLearning
and potentially, focused workshops.
Potential
Acquisitions
We
believe our future competitive position in the marketplace will be
dependent upon our ability to maintain a complex and evolving array
of technologies, products, services and capabilities. Considering
the continually evolving marketplace in which we intend to operate,
we plan to regularly evaluate acquisition opportunities within the
IMT&S market and at any time may be in various stages of
discussions with respect to such opportunities.
Pursuing strategic acquisitions is an important aspect to our
current and future growth strategy, which we expect to continue, in
order to strengthen our service offerings in the IMT&S market.
As discussed elsewhere in this filing, we completed the acquisition
of all of the issued and outstanding shares of Service 800, Inc. on
March 4, 2019.
We
believe our planned acquisitions support our long-term strategy for
growth. We believe such acquisitions will strengthen our
competitive position, help us obtain a customer base and provide
greater scale to accelerate innovation, and begin revenues. We plan
to continue to identify strategic acquisitions of complementary
companies, products, services and technologies which we believe
will augment our existing business.
Research and
Development
The
industry in which we plan to operate and compete is subject to
rapid technological developments, evolving industry standards,
changes in customer requirements and competitive new products and
features. As a result, we believe our success, in part, will depend
on our ability to build and enhance our products in a timely and
efficient manner and to develop and introduce new products that
meet client needs while reducing total cost of ownership. To
achieve these
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objectives, we plan to make and expect to make
research and development investments through internal and
third-party development activities, third-party licensing
agreements and potentially through technology
acquisitions.
Marketing and
Sales
Our
sales and marketing plan is built around teams that collaborate to
create market awareness and demand, to build a robust sales
pipeline and to ensure customer success that drives revenue growth
through market identification.
Sales
We
plan to use a direct sales approach that includes inside sales
teams and field sales teams. Our planned inside sales team, will be
based in regional sales hubs when fully implemented, qualifies and
manages accounts throughout the world in a manner in which we can
seed new sales at a low cost and expand these accounts over time.
The second phase of our planned sales initiative is the development
and use of a direct field sales team that will cover North America;
Europe, Middle East and Africa; the Asia Pacific region; and Latin
America, and is mainly responsible for lead qualification and
account management for large enterprises. Our planned direct sales
teams will partner with technical sales representatives who will
provide pre-sales technical support. We will also have a dedicated
customer success team to drive renewals of existing contracts.
We
also plan to sell our products through indirect sales channels
including technology vendors, resellers and OEM and independent
software vendor (ISV) partners. These channels will provide
additional sales coverage, solution-based selling, services and
training throughout the world. Our channel program will be led by a
dedicated sales team.
Marketing
Our
planned marketing efforts will focus on establishing our brand,
generating awareness, creating leads and cultivating the BYOC user
community. The marketing team will be dedicated to product
marketing, program marketing, field events, channel marketing,
corporate communications and website development. We plan to
leverage both online and offline marketing channels such as events
and trade shows, seminars and webinars, third-party analyst
reports, whitepapers, case studies, blogs, search engines and email
marketing. A central focus for the marketing team will be to drive
free product trials and encourage use of our free online training
and certification, an integral part of our planned customer
acquisition process. Our marketing team will be responsible for the
logistics of hosting various planned events, including an annual
customer conferences and regional events, as well as providing
Web-based community tools and supporting customer-driven user
groups.
Seasonality
In
the past, our operating results and operating cash flows
historically have not been subject to seasonal variations. This
pattern may change, however, in the event that we succeed in
bringing our planned products to market.
Market and
Competition
The
IMT&S industry is highly fragmented and competitive. Key
competitive factors include contractual terms and competitive
pricing, quality of service, reputation, technical and industry
expertise, scope of services, innovative service and product
offerings. Key success factors include the ability to access the
latest available and most efficient technology and techniques;
maintain a highly skilled workforce; maintain effective cost
controls, and good project management skills.
The
market for our proposed products and related services is highly
competitive, subject to rapid technological change and shifting
customer needs and economic pressures. In the Customer Feedback
Management Platform (CX) market, our competitors may have single
(or narrowly-tailored) solutions or they may have a range of
information management solutions. Given the markets in which we
plan to operate and the products and services we plan to offer, we
believe our top competitors to be Clarabridge, Confirmit, InMoment,
MartizCX, Medallia, NICE, Qualtrics, Satmetrix Systems, SMG and
Verint Systems.
We
believe that many of our competitors in the IMT&S industry
would be small, and of those, many are non-employing firms.
Companies in the industry in which we intend to operate offer a
broad range of product and services tailored to different markets.
This mobility has allowed smaller firms to dominate the industry
composition, as they tend to provide services to a specific niche
market and/or within a specific geographic region. Despite their
prevalence, smaller firms contribute only a small percentage of
industry revenue. The bulk of revenue is generated by several
high-profile global corporations, such as IBM, Hewlett-Packard, EMC
Corporation, SAS, and Accenture. Larger companies maintain
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an advantage over smaller firms in that they can
service national and international clients, with more resources and
capabilities, and as such are able to command a higher
premium.
We
believe that certain competitive factors will affect the market for
our future software products and related services, which may
include: (i) vendor and product reputation; (ii) product
quality, performance and price; (iii) the availability of
software products on multiple platforms; (iv) product scalability;
(v) product integration with other enterprise applications;
(vi) software functionality and features; (vii) software
ease of use; (viii) the quality of professional services,
customer support services and training; and (ix) the ability to
address specific customer business problems. We believe the
relative importance of each of these factors depends upon the
concerns and needs of each specific customer.
Intellectual
Property Rights
Our
future success and ability to compete will depend on our ability to
develop and maintain our intellectual property and proprietary
technology and to operate without infringing on the proprietary
rights of others. Software products are generally licensed to
customers on a non-exclusive basis for internal use in a customer's
organization. We plan to also grant rights in intellectual property
that we plan on developing or acquiring to third-parties to allow
them to market certain of our future products on a non-exclusive or
limited-scope exclusive basis for an application of such product or
to a specific geographic region.
We
plan to rely on a combination of copyright, patent, trademark and
trade secret laws, non-disclosure agreements and other contractual
provisions to establish and maintain our proprietary rights. The
duration of patents is determined by the laws of the country of
issuance and for the U.S. is typically 17 years from the date of
issuance of the patent or 20 years from the date of filing of the
patent application resulting in the patent. While we believe our
intellectual property will be an asset, and our ability to maintain
and protect our intellectual property rights is important to our
success, we do not anticipate that our business will not be
materially dependent on any patent, trademark, license, or other
intellectual property right.
Employees
As
of December 31, 2019, the Company currently has two full-time
employees, of which Mr. Geordan Pursglove is one of them. Mr.
Pursglove is our President, CEO and Director. Through the
acquisition of Service 800, Inc., we added forty (40) full time
employees and approximately 320 independent service providers that
assist in providing services to the Company’s current roster of
approximately 130 companies and 300 service organizations.
Additionally, through the acquisition of PathUX the Company added
an additional five employees along with approximately 100
independent service providers that assist in providing services for
IDriveYourCar.
Properties
We
currently lease virtual office space at 3773 Howard Hughes Parkway,
Suite: 500 Las Vegas, NV 89169. We pay an annual fee of $120
for this lease. In February of 2020 the Company moved Service 800,
Inc. to 110 Cheshire Lane, Minnetonka Minnesota 55305. Service 800
leases 3,210 square feet of office space under an operating lease
agreement with Carlson Center East LLC. The lease, which expires
June 30, 2023, requires base monthly rents of $4,160, plus
operating expenses.
Legal
Proceedings
A complaint against us, dated February 5, 2020, has been filed in
Hennepin County, Minnesota, by Jean Mork Bredeson, the former
President and former owner of Service 800, making certain claims
related to the Company’s acquisition of Service 800, seeking in
excess of $1.6 million in damages. The Company believes these
claims to be unfounded and the Company is continuing to vigorously
defend itself against this lawsuit. On March 16, 2020, the Company
and Service 800 filed an answer, counterclaim and third-party claim
against Ms. Bredeson and defendants Allen Bredeson and Jeff
Schwedinger, former employees of Service 800.
In addition to the above, from time to time, we may be involved in
litigation in the ordinary course of business. Other than as set
forth above, we are not currently involved in any litigation that
we believe could have a material adverse effect on our financial
condition or results of operations. Other than as set forth above,
to our knowledge, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the
knowledge of our executive officers or any of our subsidiaries,
threatened against
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or affecting our Company, our common stock, any of
our subsidiaries or any of our subsidiaries’ officers or directors
in their capacities as such, in which an adverse decision could
have a material adverse effect.
ITEM 1A.
RISK FACTORS
An investment in our securities involves a high degree of
risk. You should carefully consider the risks described
below before deciding to invest in or maintain your investment in
our Company. The risks described below are not intended
to be an all-inclusive list of all of the potential risks relating
to an investment in our securities. If any of the
following or other risks actually occur, our business, financial
condition or operating results and the trading price or value of
our securities could be materially and adversely affected.
General Business and Industry
Risks
We have no
proven ability to generate revenues, and any investment in our
company is risky.
We
do not have a meaningful operating history, so it will be difficult
for you to evaluate an investment in our stock. We cannot assure
that we will generate revenues or be profitable. As a result,
investors will bear the risk of complete loss of their investment
in the event we are not successful.
Rule 144 is not generally available to holders of our Common
Stock which makes it difficult to resell shares in the
future.
With limited exceptions related to restrictive securities acquired
before we became a “non-shell company”, holders of our restricted
securities continued to be limited in their ability to resell their
securities pursuant to Rule 144. Preclusion from the use of the
resale exemption from registration afforded by Rule 144 may make it
more difficult for us to sell equity securities in the future, and
for stockholders to resell their restricted
securities.
Furthermore, in general, under Rule 144, a person who is not one of
our affiliates and who is not deemed to have been one of our
affiliates at any time during the three months preceding a sale and
who has beneficially owned shares of our common stock for at least
six months would be entitled to sell them without restriction,
subject to the continued availability of current public information
about us (which current public information requirement is
eliminated after a one-year holding period).
A person who is an affiliate and who has beneficially owned shares
of a company’s common stock for at least six months, subject to the
continued availability of current public information about us, is
entitled to sell within any three-month period a number of shares
that does not exceed the greater of:
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one percent of the
number of shares of our company’s common stock then outstanding,
which, in our case, will equal approximately 10,000,000 shares as
of the date of this Annual Report on Form10-K; or
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the average weekly
trading volume of our company’s common stock during the four
calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
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Rule 144 is not available for either a reporting or non-reporting
shell company, as defined under Rule 405 of the Securities Act,
unless our company: has ceased to be a shell company; is subject to
the Exchange Act reporting obligations; has filed all required
Exchange Act reports during the preceding twelve months; and at
least one year has elapsed from the time the company filed with the
SEC, current Form 10 type information reflecting its status as an
entity that is not a shell company.
The
accompanying financial statements have been prepared assuming that
we will continue as a 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. For
the year ended December 31, 2019 and December 31, 2018, we had an
accumulated deficit of $48,227,200 and $42,762,681, respectively.
These matters raise substantial doubt about our ability to continue
as a going concern. The consolidated financial statements do not
include any adjustments relating to the recoverability and
classification of asset amounts or the classification of
liabilities that might be necessary should we be unable to continue
as a going concern. As a result, our independent registered
public
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accounting firm included an explanatory paragraph
in its report on our financial statements as of December 31, 2019
and 2018 with respect to this uncertainty.
Our ability to continue as a going concern is dependent upon our
ability to generate profitable business operations in the future
and/or obtaining the necessary financing to meet our obligations
and repay our liabilities. Management’s plan to continue as a going
concern is based on us obtaining additional capital resources
through the sale of our securities and/or loans on an as needed
basis. The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans
described above and eventually attaining profitable operations.
In addition to the normal risks associated with a new business
venture, there can be no assurance that our business plan will be
successfully executed. Our ability to execute our business plan
will depend on our ability to obtain additional financing and
achieve a profitable level of operations. There can be no assurance
that sufficient financing will be available, or, if available, that
it will be on terms that are satisfactory to us. Even if we are
able to obtain additional financing, it may contain undue
restrictions on our operations, in the case of debt financing, or
cause substantial dilution for our stockholders, in the case of
equity financing. In this regard, we are restricted by the
number of shares available for issuance in an equity financing, and
we will likely need to increase out authorized capital in order to
take advantage of such financing. However, there can be no
assurance that we will be successful in obtaining shareholder
approval to increase our authorized capital. Further, we cannot
give any assurance that we will generate substantial revenues or
that our business operations will prove to be profitable. To the
extent that we are unsuccessful, we may need to curtail or cease
our operations and implement a plan to extend payables or reduce
overhead until sufficient additional capital is raised to support
further operations. Our ability to continue as a going concern is
dependent on management’s plans, which include further
implementation of its business plan and continuing to raise funds
through debt and/or equity raises.
We must raise
additional capital to fund our operations.
We
do not currently have sufficient capital to fund our current or
anticipated operations. We may be unable to obtain additional
capital when required. Future business development activities, as
well as our administrative requirements (such as salaries,
insurance expenses and general overhead expenses, as well as legal
compliance costs and accounting expenses) will require a
substantial amount of additional capital and cash flow.
We
may need to acquire additional funds in order to develop our
business. We may seek to raise such capital through public or
private equity financings, partnerships, collaborations, joint
ventures, disposition of assets, debt financings or restructurings,
bank borrowings or other sources of financing. However, our ability
to do so is subject to a number of risks, uncertainties,
constraints and consequences, including, but not limited to, the
following:
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our ability to raise
capital through the issuance of additional shares of our common
stock or convertible securities is restricted by the limited number
of our residual authorized shares, the potential difficulty of
obtaining stockholder approval to increase authorized shares and
the restrictive covenants under our secured term loan
agreement;
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issuance of
equity-based securities will dilute the proportionate ownership of
existing stockholders;
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our ability to obtain
further funds from any potential loan arrangements is limited by
our existing loan and security agreement;
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certain financing
arrangements may require us to relinquish rights to various assets
and/or impose more restrictive terms than any of our existing or
past arrangements; and
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we may be required to
meet additional regulatory requirements, and we may be subject to
certain contractual limitations, which may increase our costs and
harm our ability to obtain funding.
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For
these and other reasons, additional funding may not be available on
favorable terms or at all. If we fail to obtain additional capital
when needed, we may be required to delay, scale back or eliminate
some or all of our planned research and development programs,
reduce our selling, general and administrative expenses, be unable
to attract and retain highly qualified personnel, refrain from
making our contractually required payments when due (including debt
payments) and/or be forced to cease operations, liquidate our
assets and possibly seek bankruptcy protection. Any of these
consequences could harm our business, financial condition,
operating results and prospects.
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Any
additional capital raised through the sale of equity may dilute the
ownership percentage of our stockholders. Raising any such capital
could also result in a decrease in the fair market value of our
equity securities because our assets would be owned by a larger
pool of outstanding equity. The terms of securities we issue in
future capital transactions may be more favorable to our new
investors, and may include preferences, superior voting rights and
the issuance of other derivative securities, and issuances of
incentive awards under equity employee incentive plans, which may
have a further dilutive effect.
Our
ability to obtain financing may be impaired by factors such as the
capital markets (both generally and in our industry in particular),
our limited operating history, national unemployment rates and the
departure of key employees. Further, economic downturns will likely
decrease our revenues and may increase our requirements for
capital. If the amount of capital we are able to raise from
financing activities, together with our revenues from operations,
if any, is not sufficient to satisfy our capital needs (even to the
extent that we reduce our operations), we may be required to cease
our operations, divest our assets at unattractive prices or obtain
financing on unattractive terms.
We
have a limited operating history, have generated losses since
inception, have not generated any revenues from planned operations
and may never achieve profitability.
Prior to our recent acquisition of Service 800, Inc., we were an
early pre-revenue stage company and have a limited history of
operations. We are faced with all of the risks associated with a
company in the early stages of development. Our business is subject
to numerous risks associated with a new company engaged in the "big
data" arena for the B2B IMT&S space. Such risks include, among
other things, potential competition from well-established and
well-capitalized companies, unanticipated development, and changes
in trends, marketing difficulties and risks associated with
intellectual property creation, protection and exploitation. There
can be no assurance that we will ever achieve profitability.
We
may encounter delays, uncertainties, and complications typically
encountered by early stage businesses, many of which will be beyond
our control. These risks include the following: lack of sufficient
capital, unanticipated
problems, delays, and
expenses relating to product development and implementation, lack
of intellectual property protection, licensing and marketing
difficulties, competition, technological changes, and uncertain
market acceptance of our future products and services.
Our
planned expense levels will be based in part on our expectations
concerning future revenue, which is difficult to forecast
accurately based on our stage of development. We may be unable to
adjust spending in a timely manner to compensate for any unexpected
shortfall in revenue. Further, business development and marketing
expenses may increase significantly as we expand operations. To the
extent that these expenses precede or are not rapidly followed by a
corresponding increase in revenue, our business, operating results,
and financial condition may be materially and adversely
affected.
Our acquisitions are an important aspect of our growth
strategy, but they may not achieve expectations, which could affect
our cash flow and profitability.
We plan to acquire companies and operations that complement our
planned business operations. These transactions involve numerous
business risks, including finding suitable transaction partners,
the diversion of management’s attention from other business
concerns, extending our product or service offerings into areas in
which we have limited experience, entering into new geographic
markets, the potential loss of key employees or business
relationships and the integration of acquired businesses, any of
which could adversely impact our business, financial condition or
results of operations. We may face a number of risks with
respect to potential acquisitions, including but not limited
to:
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an acquisition may
negatively affect our business, financial condition, operating
results or cash flows because it may require us to incur charges or
assume substantial debt or other liabilities, may cause adverse tax
consequences or unfavorable accounting treatment, may expose us to
claims and disputes by third parties, including intellectual
property claims and disputes, or may not generate sufficient
financial return to offset additional costs and expenses related to
the acquisition;
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we may encounter
difficulties or unforeseen expenditures in integrating the
business, technologies, products, personnel or operations of any
company that we acquire, particularly if key personnel of the
acquired company decide not to work for us;
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an acquisition,
whether or not consummated, may disrupt our ongoing business,
divert resources, increase our expenses and distract our
management
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an acquisition may
result in a delay or reduction of purchases for both us and the
company that we acquired due to uncertainty about continuity and
effectiveness of solution from either company;
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we may not be able to
successfully integrate our business through the acquisition of
Service 800, Inc. and we may not be able to fully realize the
anticipated strategic benefits of the acquisition, which includes a
complementary business;
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an acquisition may
involve the entry into geographic or business markets in which we
have little or no prior experience or where competitors have
stronger market positions;
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challenges inherent
in effectively managing an increased number of employees in diverse
locations;
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the potential strain
on our financial and managerial controls and reporting systems and
procedures;
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potential known and
unknown liabilities associated with an acquired company;
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our use of cash to
pay for acquisitions could limit other potential uses for our
cash;
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the risk of
impairment charges related to potential write-downs of acquired
assets or goodwill in future acquisitions; and
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to the extent that we
issue a significant amount of equity or convertible debt securities
relating to future acquisitions, existing stockholders may be
diluted and earnings per share may decrease.
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We may not succeed in addressing these or other risks or any other
problems encountered relating to the integration of any acquired
business, the inability to integrate successfully the business,
technologies, products, personnel or operations of any acquired
business, or any significant delay in achieving integration, could
have a material adverse effect on our business, financial condition
and operating results.
We may be adversely affected by risks associated with
acquisitions, such as Service 800, including execution risks,
failure to realize anticipated strategic benefits, and failure to
overcome integration risks, which could adversely affect our growth
and profitability.
We plan to grow our business both organically and inorganically,
including through the acquisitions of Service 800, PathUX, and
IdriveYourCar, and development of software and solutions. While we
plan to complete other acquisitions, there can be no assurance that
we will be successful in closing on other acquisitions. In the
event that we do pursue further acquisitions, we may have
difficulty executing on such acquisitions and may not realize the
anticipated benefits of any transaction we complete. Any of the
foregoing matters could materially and adversely affect us.
The integration of Service 800, PathUX and IDriveYourCar will
likely be a time-consuming process. The integration process will
likely require substantial management time and attention, which may
divert attention and resources from other important areas,
including developing our planned services and products existing
business. In addition, we may not be able to fully realize the
anticipated strategic benefits of the acquisition, which includes a
complementary business. The failure to successfully integrate the
combined operations, including retention of key employees, could
impact our ability to realize the full benefits of our acquisitions
of Service 800, PathUX and IDriveYourCar. If we are not able to
achieve the anticipated strategic benefits of the acquisition, it
could adversely affect our business, financial condition and
results of operations, and could adversely affect the market price
of our common stock if the integration or the anticipated financial
and strategic benefits of the acquisition are not realized as
rapidly as, or to the extent anticipated by us. Failure to achieve
the anticipated benefits could result in increased costs and
decreases in future revenue and/or net income following the
acquisition.
Inadequate
protection of our intellectual property could impair our
competitive advantage.
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Our
success and ability to compete depend in part upon our development
of proprietary technology and intellectual properties. We will
eventually rely primarily on a combination of copyright, trademark,
patent, trade secret laws, nondisclosure agreements, and technical
measures to protect our future proprietary technology and
intellectual properties. We will also limit access to, and
distribution of, our proprietary technology and trade secrets
through security technologies.
There can be no
assurance that our efforts to protect our intellectual property
rights will adequately deter misappropriation or independent
third-party development of our intellectual property or prevent an
unauthorized third party from obtaining or using information that
we regard as proprietary.
There can be no assurance that our competitors will not
independently develop proprietary technologies similar to ours.
Litigation may be necessary in the future to protect our trade
secrets or other intellectual property rights or to determine the
validity and scope of the proprietary rights of others. Such
litigation could result in substantial costs and diversion of
resources and could have a material adverse effect on our business,
financial condition, and results of operations.
Third parties
could claim that we are infringing their patents or other
intellectual property rights; we must protect our intellectual
property; and others could infringe on or misappropriate our
rights.
Open source software includes a broad range of software
applications and operating environments produced by companies,
development organizations and individual software developers and is
typically licensed for use, distribution and modification at a
nominal cost or often, free of charge. To the extent that the open
source software models expand, and non-commercial companies and
software developers create and contribute competitive analytical
software to the open source community, we may be forced to adjust
our pricing, maintenance and distribution strategies and models,
which could have a material adverse effect on our financial
position and results of operation. In addition, if one of our
developers embedded open source software into one or more of our
products without our knowledge or authorization or a third party
has incorporated open source software into such third-party’s
software without disclosing the presence of such open source
software and we embedded such third-party software into one or more
of our products, we could, under certain circumstances, be required
to disclose the source code to such products. Third-parties could
claim that we are infringing on their patents or other intellectual
property rights.
Our planned
technology and products may not achieve commercial success or
widespread market acceptance.
The
technology and products that we plan to develop, may not achieve
customer or widespread market acceptance. Some or all of our
planned technology and products may not achieve commercial success
as a result of technology problems, competitive cost issues, yield
problems, and other factors. Even if we successfully introduce a
new product, customers may determine not to adopt or may terminate
use of our products for a variety of reasons, including the
following:
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superior technologies
developed by competitors;
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lack of anticipated
or actual market demand for the products; or
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unfavorable
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We
may be unable to recover any expenditure we make relating to one or
more modern technologies that ultimately prove to be unsuccessful
for any reason. In addition, any investments or acquisitions made
to enhance technologies may also prove to be unsuccessful.
We may not be
able to commercialize our planned technology products or
services.
A
key element of our business strategy involves the development and
commercialization of new software technologies and products. The
success of this effort depends on numerous factors. We may not be
able to expand our business as anticipated and may make substantial
investments in product development, and marketing efforts that may
not result in any sales. The design and manufacture of products
utilizing innovative technology involves a highly complex process
that is sensitive to a wide variety of factors. As a result of
these factors, we may experience no revenues and no adoption of our
planned products or services.
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We might not be
able to implement our business strategy.
To
some extent, our ability to generate cash flow in the future is
subject to general economic, financial, competitive, and other
factors that are beyond our control. In the event our management
has misjudged the market demand, market acceptance of our services,
or financial projections and assumptions, results of operations
could be adversely affected, and we might not be able to fund our
development as planned. If we are unable to finance existing or
future projects with cash flow from operations, we will have to
adopt one or more alternatives, such as delaying launch, postponing
advertising and marketing, canceling development projects and other
capital expenditures, or obtaining additional equity/debt
financing, or joint venture partners. These sources of additional
funds might not be sufficient to finance future projects, and other
financing may not be available on acceptable terms, in a timely
manner or at all. If we are unable to secure additional financing,
we could be forced to limit our business plan, or we may not be
able to take advantage of unanticipated opportunities or otherwise
respond to unanticipated competitive pressures, which might
adversely affect our business, financial condition and results of
operations.
We may
experience delays in introducing our planned products or services
which may adversely affect our revenue.
The
timing of a creative process is difficult to predict. In developing
our products, we anticipate dates for the launch of the products
and associated product introductions. When we state that we will
introduce or anticipate introducing a product at a certain time in
the future, those expectations are based on completing the
associated development or acquisition and implementation work in
accordance with our currently anticipated schedules. Unforeseen
delays and difficulties in the development process or significant
increases in the planned costs of development, or factors outside
our control may cause the introduction date for the product to be
later than anticipated or, in some situations, may cause a product
introduction to be discontinued. Any delay or cancellation of
planned product development and introduction may decrease the
number of products and features we sell and harm our business.
We may become dependent upon third-parties for certain future
software and marketing applications development.
We may license certain software upgrades from third-party software
developers. Licensed software could be embedded in our future
product offerings, and some could be offered as add-on products. If
these licenses are discontinued, or become invalid or
unenforceable, there can be no assurance that we will be able to
develop substitutes for the licensed software independently or that
we will be able to obtain alternatives in a timely manner. Any
delays in obtaining or developing substitutes for future licensed
software applications could result in material adverse impacts to
our financial condition and plan of operations.
Software piracy is a persistent problem in the IMT&S
industry.
Preventing unauthorized use of computer software is difficult, and
software piracy is a persistent problem for the software industry.
In addition, the laws of various countries in which we may plan to
market and sell our software and marketing applications do not
protect our software and intellectual property rights to the same
extent as the laws of the US. Despite the precautions that we are
planning to take to safeguard our software and marketing
application, it may be possible for unauthorized third-parties to
reverse engineer or copy our planned products or obtain and use
information that we regard as proprietary. There can be no
assurance that the steps that we plan to take to protect our
proprietary rights will be adequate to prevent misappropriation of
our technology. If we fail to protect our Company from
misappropriation of our technology, our operations could be
materially affected.
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Our operating
results, once established, may have significant periodic and
seasonal fluctuations.
Customer commitments in the IMT&S industry are frequently
short-term. In addition to the variable nature of these
commitments, other factors may contribute to significant periodic
and seasonal fluctuations in results of operations. These factors
may include the following:
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orders;
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the volume of orders
relative to capacity to provide technical support or customer
service;
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product introductions
and market acceptance of new products or new generations of
products;
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evolution in the life
cycles of customers’ products;
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timing of
expenditures in anticipation of future orders;
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effectiveness in
managing software development processes;
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changes in cost and
availability of labor and components;
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introduction and
market acceptance of customers’ products;
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product mix;
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pricing and
availability of competitive products; or
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anticipated or
unanticipated changes in economic conditions.
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Volatility of
consumer preferences makes introducing successful products and
services difficult and unpredictable.
Our
success will depend on generating revenue from market acceptance of
the products we release, but market acceptance cannot be predicted
or relied upon. Our business plan involves the development of
IMT&S products and the future enhancement of those products.
The success of future enhancements cannot be assured regardless of
the success of any initial products. If our products fail to gain
market acceptance, we may not have sufficient revenues to pay our
expenses and continue the ongoing development and acquisition of
new products. The failure to successfully anticipate, identify and
react to consumer preferences would have an adverse effect on
revenues, profitability and the results of operations.
Potential
profit margins may decline as a result of increasing pressure on
margins.
The
industry in which we plan to operate is subject to potentially
significant pricing pressure caused by many factors. If our
estimated gross margin declines and we fail to sufficiently reduce
our operating cost or grow our future net revenues, we could incur
significant operating losses that we may be unable to fund or
sustain for extended periods of time, if at all. This could have a
material adverse effect on our results of operations, liquidity and
financial condition.
We anticipate
we will be dependent on the timely receipt of payment from our
clients.
We
plan to extend payment terms to our future clients. The extension
of payment terms and the collection of potential receivables could
extend well beyond normal terms outside of our control. Our ability
to collect on outstanding receivables, our ability to borrow if
needed under any credit facility and our overall financial
condition could be negatively affected. Our financial condition and
results of operations would be adversely impacted.
Our industry is
highly competitive.
The
market for marketing statistical software, data mining tools,
predictive analytic solutions, both in the US and internationally,
is highly fragmented and competitive. However, as our sales channel
becomes more visible to potential
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competitors, some of which have well-recognized
brand names and substantial financial, technological, distribution,
marketing experience and research and development capabilities, the
potential competitors may develop products that compete directly
with our products. Competitive pressures from the introduction of
novel solutions and products by these companies or other companies
could have a material adverse effect on our future business
results. There can be no assurance that we will be able to compete
successfully or that the competition will not have a material
adverse effect on our future business results.
We may experience sporadic sales cycles.
Our sales strategy is focused on our targeted market of Fortune 500
and 1000 businesses with a need for our software, marketing and
related services. These “strategic accounts” could produce sales
cycles of nine months or more in duration before any revenues are
generated by us. These long sales cycles could have an adverse
effect on our cash flow and in turn would have a materially adverse
effect on our financial condition and results of operations.
We may be
subject to risks associated with information disseminated through
the Internet.
The
safe and secure transmission of confidential information over the
Internet has been a significant hurdle to electronic file transfer
and communications over the Internet. Any compromise or actual
breach of our planned internal security processes, databases and or
hardware could deter our targeted clients from using our software
and marketing applications and in turn create a materially adverse
effect on our financial condition and results of operations.
Possible future
transactions with our executive management or their affiliates may
create conflicts.
Under prescribed circumstances, our bylaws permit us, under
restricted circumstances, to enter into transactions with our
affiliates, including the borrowing and lending of funds and joint
investments. Currently, our policy is not to enter into any
transaction involving joint investments with our Management or
their affiliates, or to borrow from with the exclusion of past
loans from The 2GP Group, or lend money to such persons. However,
our policies in each of these regards may change in the future.
Our rights and
the rights of our shareholders to recover claims against our
officers and directors are limited.
Nevada law provides that a director has no liability in that
capacity if he performs his duties in good faith in a manner he
reasonably believes to be in our best interests and with the care
that an ordinarily prudent person in a like position would use
under similar circumstances. Our articles of incorporation, as
amended (the “Articles of Incorporation”) authorize us, and our
bylaws require us, to indemnify our directors, officers, employees
and agents to the maximum extent permitted under Nevada law.
Additionally, our Articles of Incorporation limit the liability of
our directors and officers to us and our shareholders for monetary
damages to the maximum extent permitted under Nevada law. As a
result, our shareholders and we may have more limited rights
against our directors, officers, employees and agents, than might
otherwise exist under common law. In addition, we may be obligated
to fund the defense costs incurred by our directors, officers,
employees and our agents in some cases.
The outbreak,
and threat or perceived threat of outbreak, of the coronavirus may
negatively impact our sourcing and manufacturing operations and
consumer spending, which could adversely affect our business,
results of operations and financial condition.
The
outbreak of the COVID-19 (commonly referred to as the coronavirus)
could adversely affect our business, results of operations and
financial condition.. At this point, the extent of the impact on
our results as a result of the coronavirus outbreak is
uncertain.
Our
business, results of operations and financial condition could be
adversely affected if the coronavirus outbreak expands to other
countries where we have a significant number of stores,
partnerships with regional distributors and wholesalers and/or
sourcing and manufacturing operations. If the retail economy
weakens and/or consumer behavior shifts due to the coronavirus
outbreak or threat or perceived threat of such outbreak, we or our
distributors may need to significantly reduce or limit store
operations and/or close additional stores and retailers may be more
cautious with orders. A slowing or changing economy in the regions
adversely affected by the coronavirus outbreak could adversely
affect the financial health of our distributors and wholesale
partners, which in turn could have an adverse effect on our
business, results of operations and financial condition.
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Risks Related to Our Common Stock
Our stock is
considered a “penny stock,” and is therefore considered
risky.
The
SEC has adopted Rule 15g-9 which establishes the definition of a
“penny stock,” for the purposes relevant to us, as any equity
securities 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. Such “penny stocks” and are subject to
regulations which mandate the dispersion of certain disclosures to
potential investors prior to any investors’ purchase of any penny
stocks. Penny stocks are low-priced securities with low trading
volume. Consequently, the price of the stock is often volatile and
investors may be unable to buy or sell the stock when you desire.
The SEC extensively monitors “penny stocks,” and such regulations
are enumerated in Exchange Act Section 15(h) and Exchange Act Rules
3a51-1 and 15g-1 through 15g-100. With certain exceptions, brokers
selling our stock must adhere to the SEC’s “penny stock”
regulations, which requirements include, but are not limited to,
the following:
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brokers must provide
you with a risk disclosure document relating to the penny stock
market;
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brokers must disclose
price quotations and other information relating to the penny stock
market;
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brokers must disclose
any compensation they receive from the sale of our stock;
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brokers must provide
a disclosure of any compensation paid to any associated persons in
connection with transactions relating to our stock;
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brokers must provide
you with quarterly account statements;
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brokers may not sell
any of our stock that is held in escrow or trust accounts;
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prior to selling our
stock, brokers must approve your account for buying and selling
penny stocks; and
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brokers must make a
special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser’s written
agreement to the transaction.
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These additional sales practices and the disclosure requirements
could impede the sale of our securities. In addition, the liquidity
for our securities may be adversely affected, with related adverse
effects on the price of our securities.
Unfavorable outcomes in legal proceedings may adversely
affect our business, financial conditions and results of
operations.
Our results may be affected by the outcome of future litigation.
Unfavorable rulings in our legal proceedings may have a negative
impact on us that may be greater or smaller depending on the nature
of the rulings. In addition, from time to time in the future we may
be subject to various claims, investigations, legal and
administrative cases and proceedings (whether civil or criminal) or
lawsuits by governmental agencies or private parties, including as
described in the immediately preceding risk factor. For example,
see “Item 3. Legal Proceedings” regarding current litigation
matters. If the results of these investigations, proceedings or
suits are unfavorable to us or if we are unable to successfully
defend against third party lawsuits, we may be required to pay
monetary damages or may be subject to fines, penalties, injunctions
or other censure that could have a material adverse effect on our
business, financial condition and results of operations. Even if we
adequately address the issues raised by an investigation or
proceeding or successfully defend a third-party lawsuit or
counterclaim, we may have to devote significant financial and
management resources to address these issues, which could harm our
business, financial condition and results of operations.
On July
28, 2011, a judgment was entered into in favor of Mr. George
Pursglove, our former Chief Executive Officer, in connection with
his countersuit against BOOMj.com, a former wholly-owned subsidiary
of the Company. The judgment was in the total amount of
$6,020,775, consisting of: (i) $20,775 for damages as to the claim
for failure to pay wages; (ii) $3,000,000 for damages as to the
conversion claim; and (iii) $3,000,000 for punitive damages (the
“July Judgment”). The July Judgment accrues interest at a
rate of 5.29% per annum. As of September 30, 2019, the total
amount forgiven of principal and interest was $8,360,224.
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FINRA sales
practice requirements may limit a stockholder’s ability to buy and
sell our stock.
In
addition to the “penny stock” rules described above, FINRA has
adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior
to recommending speculative low-priced securities to their
non-institutional customers, broker-dealers must make reasonable
efforts to obtain information about the customer’s financial
status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA believes that there is
a high probability that speculative low-priced securities will not
be suitable for at least some customers. The FINRA requirements
make it more difficult for broker-dealers to recommend their
customers buy our common stock, which may have the effect of
reducing the trading activity in our common stock. As a result,
fewer broker-dealers may be willing to make a market in our common
stock, reducing a stockholder’s ability to resell shares of our
common stock, thereby potentially reducing the liquidity of our
common stock.
Certain
stockholders possess a majority of our voting power, and through
this ownership, may control our Company and our corporate
actions.
Our
controlling stockholder, The 2GP Group, Geordan Pursglove, our
President, CEO and Director LLC and Fiona Oakley, together hold a
majority of the total voting power of our outstanding capital stock
as of March 31, 2020. The 2GP Group, LLC is an entity
controlled by Mr. Pursglove, who holds sole voting and dispositive
power over these shares. Each share of Series A Preferred Stock is
convertible into one share of common stock. In addition, each
share of Series A Preferred Stock entitles its holder to (i)
cumulative, non-participating dividends in preference and priority
to any declaration or payment of a dividend on any of the Company’s
common stock, at a rate of 12% per annum, and (ii) three times (3x)
voting preference over common stock. Each one (1) share of
the Series B Preferred Stock shall have voting rights equal to (x)
0.019607 multiplied by the total number of votes of issued and
outstanding shares of stock of the Company eligible to vote at the
time of the respective vote (the “Numerator”), divided by (y) 0.49,
minus (z) the Numerator.These shareholders have the ability to
control our management and affairs through the election and removal
of our entire Board of Directors, the amendment of our articles of
incorporation or bylaws, and the adoption of measures that could
delay or prevent a change in control or impede a merger, takeover
or other business combination involving us. Such concentrated
control of the Company may adversely affect the price of our common
stock. A stockholder that acquires common stock will not have an
effective voice in the management of the Company.
We have no
plans to pay dividends on our Common Stock or our Series A
Preferred Stock.
We
have not previously paid any cash dividends, nor have we determined
to pay dividends on any share of Series A Preferred Stock or shares
of Common Stock, except as described in the rights and preferences
detailed in the “Certificate of Designation of Preferences” for the
Series A Preferred Stock filed with the Secretary of State of the
State of Nevada. The permissibility to pay dividends on our shares
is restricted by Section 78.288 of the Nevada Revised Statutes,
which provides that a company may not issue a dividend if the
result of such dividend would be to make the company have negative
retained earnings. There can be no assurance that our
operations will result in sufficient revenues to enable us to
operate at profitable levels or to generate positive cash flows.
Furthermore, there is no assurance that the Board of Directors will
declare dividends even if profitable. Dividend policy is subject to
the Nevada Revised Statutes and the discretion of our Board of
Directors and will depend on, among other things, our earnings,
financial condition, capital requirements and other factors.
If we issue
additional shares in the future, it will result in the
dilution of our existing stockholders.
Subject to acceptance by the State of Nevada of the certificate of
amendment to our articles of incorporation, we will be
authorized to issue up to 3,000,000,000 shares of common
stock with a par value of $0.001, of which 1,627,914,678 are issued
and outstanding as of March 31, 2020. Our board of directors, upon
the approval of the stockholders, may seek
to increase the number
of authorized shares in the future and may choose to
issue some or all of such shares to acquire one
or more businesses or to provide additional financing in
the future. The issuance of any such shares will result
in a reduction of the book value and market price of the
outstanding shares of our common stock. If we issue any
such additional shares, such issuance will cause a reduction
in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of
control of our company.
Voting power is highly concentrated in holders of our Series
A Preferred Stock and Series B Preferred Stock.
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We are authorized to issue up to 250,000,000 shares of preferred
stock, all of which(i) 249,999,990 are designated Series A
Preferred Stock and all of which are currently issued and
outstanding, (ii) 51 are designated Series B Preferred Stock, of
which 20 shares are currently issued and outstanding, and (iii) 49
have yet been designated and are unissued. Holders of our
Series A Preferred Stock are entitled to three times (3x) voting
preference over holders of common stock. Such concentrated
control of the Company may adversely affect the price of our common
stock. Each one (1)n share of the Series B Preferred Stock shall
have voting rights equal to (x) 0.019607 multiplied by the total
number of votes of issued and outstanding shares of stock of the
Company eligible to vote at the time of the respective vote (the
“Numerator”), divided by (y) 0.49, minus (z) the Numerator.A
stockholder that acquires common stock will not have an effective
voice in the management of the Company.
We are a “smaller reporting company” and we cannot be certain
if the reduced disclosure requirements applicable to smaller
reporting companies will make our Common Stock less attractive to
investors.
We
are an “smaller reporting company,” as defined in Rule 12b-2 under
the Exchange Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other
public companies, including “emerging growth companies” such as,
but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in
our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute
payments not previously approved. Our status as a smaller reporting
company is determined on an annual basis. We cannot predict if
investors will find our Common Stock less attractive or our company
less comparable to certain other public companies because we will
rely on these exemptions. For example, if we do not adopt a new or
revised accounting standard, our future financial results may not
be as comparable to the financial results of certain other
companies in our industry that adopted such standards. If some
investors find our Common Stock less attractive as a result, there
may be a less active trading market for our Common Stock and our
stock price may be more volatile.
The
requirements of being a reporting public company may strain our
resources, divert management’s attention and affect our ability to
attract and retain additional executive management and qualified
board members.
As a
reporting public company, we are subject to the reporting
requirements of the Exchange Act, the Sarbanes-Oxley Act, and 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, particularly after we are no
longer a “smaller reporting company.” The Exchange Act requires,
among other things, that we file annual, quarterly and current
reports with respect to our business and results of operations. As
a “smaller reporting company,” we receive certain reporting
exemptions under The Sarbanes-Oxley Act.
Changing laws, regulations and standards relating to corporate
governance and public disclosure create uncertainty for public
companies, increase legal and financial compliance costs and
increase time expenditures for internal personnel. These laws,
regulations and standards are subject to interpretation, in many
cases due to their lack of specificity, their application in
practice may evolve over time as regulators and governing bodies
provide new guidance. These changes may result in continued
uncertainty regarding compliance matters and may necessitate higher
costs due to ongoing revisions to filings, disclosures and
governance practices. We intend to invest resources to comply with
evolving laws, regulations and standards, and this investment may
result in increased general and administrative expenses and a
diversion of management’s time and attention from
revenue-generating activities to compliance activities. If our
efforts to comply with new laws, regulations and standards differ
from the activities intended by regulatory or governing bodies due
to ambiguities related to their application and practice,
regulatory authorities may initiate regulatory or legal proceedings
against us and our business may be adversely affected.
As a
public company under these rules and regulations, we expect that it
may make it more expensive for us to obtain director and officer
liability insurance, and we may be required to accept reduced
coverage or incur substantially higher costs to obtain coverage.
These factors could also make it more difficult for us to attract
and retain qualified members of our board of directors,
particularly to serve on our audit committee and compensation
committee and could also make it more difficult to attract
qualified executive officers.
As a
result of disclosure of information in this annual report and 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
results of operations could be adversely affected, and even if the
claims do not result in litigation or are resolved in our favor,
these claims, and the
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time and resources necessary to resolve them,
could divert the resources of our management and adversely affect
our business and results of operations.
Our stock price
may be volatile, which may result in losses to our
shareholders.
The
stock markets experienced and may experience significant price and
trading volume fluctuations, and the market prices of companies
quoted on the OTCPink Marketplace operated by OTC Markets Group
Inc. , which is where our stock is currently quoted, have
experienced sharp share price and trading volume changes. The
trading price of our common stock is likely to be volatile and
could fluctuate widely in response to many factors both in and
outside of our control, and include but are not limited to the
following:
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variations in our
operating results;
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changes in
expectations of our future financial performance, including
financial estimates by securities analysts and investors;
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changes in operating
and stock price performance of other companies in our industry;
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additions or
departures of key personnel; and
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future sales of our
common stock.
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Domestic and international stock markets often experience
significant price and volume fluctuations. These fluctuations, as
well as general economic and political conditions unrelated to our
performance, may adversely affect the price of our common stock.
Volatility in
the price of our common stock may subject us to securities
litigation.
The
market for our common stock may be characterized by significant
price volatility as compared to seasoned issuers, and we expect
that our share price will continue to be more volatile than a
seasoned issuer for the indefinite future. In the past, plaintiffs
have often initiated securities class action litigation against a
company following periods of volatility in the market price of its
securities. We may, in the future, be the target of similar
litigation. Securities litigation could result in substantial costs
and liabilities and could divert management's attention and
resources.
Our common
stock may become thinly traded and you may be unable to sell at or
near ask prices, or at all.
We
cannot predict the extent to which an active public market for
trading our common stock will be sustained. The trading volume of
our common stock may be sporadically or “thinly-traded,” meaning
that the number of persons interested in purchasing our common
stock at or near bid prices at certain given time may be relatively
small or non-existent.
This
situation is attributable to a number of factors, including the
fact that we are a small company which is relatively unknown to
stock analysts, stock brokers, institutional investors and others
in the investment community who generate or influence sales
volume. Even if we came to the attention of such
persons, those persons tend to be risk-averse and may be reluctant
to follow, purchase, or recommend the purchase of shares of an
unproven company such as ours until such time as we become more
seasoned and viable. As a consequence, there may be periods of
several days or more when trading activity in our shares is minimal
or non-existent, as compared to a seasoned issuer which has a large
and steady volume of trading activity that will generally support
continuous sales without an adverse effect on share price. We
cannot give you any assurance that a broader or more active public
trading market for our common stock will develop or be sustained,
or that current trading levels will be sustained.
The market
price for our common stock may become volatile given our status as
a relatively small company, which could lead to wide fluctuations
in our share price. You may be unable to sell your common stock at
or above your purchase price if at all, which may result in
substantial losses to you.
Stockholders should be aware that, according to SEC Release No.
34-29093, the market for penny stocks has suffered in recent years
from patterns of fraud and abuse. Such patterns include but are not
limited to: (1) control of the market for the security by one or a
few broker-dealers that are often related to the promoter or
issuer; (2) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (3)
boiler room
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practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons;
(4) excessive and undisclosed bid-ask differential and markups by
selling broker-dealers and (5) the wholesale dumping of the same
securities by promoters and broker-dealers after prices have been
manipulated to a desired level, along with the resulting inevitable
collapse of those prices and with consequent investor losses. Our
management is aware of the abuses that have occurred historically
in the penny stock market. Although we do not expect to be in a
position to dictate the behavior of the market or of broker-dealers
who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns
from being established with respect to our securities. The
occurrence of these patterns or practices could increase the
volatility of our share price.
General risk
statement.
Based on all of the foregoing, we believe it is possible for future
revenue, expenses and operating results to vary significantly from
quarter to quarter and year to year. As a result,
quarter-to-quarter and year-to-year comparisons of operating
results are not necessarily meaningful or indicative of future
performance. Furthermore, we believe that it is possible that in
any given quarter or fiscal year our operating results could differ
from the expectations of public market analysts or investors. In
such event or in the event that adverse conditions prevail, or are
perceived to prevail, with respect to our business or generally,
the market price of our Common Stock would likely decline.
ITEM
2. DESCRIPTION OF PROPERTY
We
currently lease virtual office space at 3773 Howard Hughes Parkway,
Suite: 500 Las Vegas, NV 89169. We pay an annual fee of $120
for this lease. During 2019, we intend to move the Company’s
headquarters to Florida. There is also a location in Minnesota for
Service 800, Inc. The current address of Service 800, Inc. is 110
Cheshire Lane, Minnetonka Minnesota 55305. Service 800 leases 3,210
square feet of office space under an operating lease agreement with
Carlson Center East LLC. The lease, which expires June 30, 2023,
requires base monthly rents of $4,160, plus operating expenses.
ITEM 3.
LEGAL PROCEEDINGS
A complaint
against us, dated February 5, 2020, has been filed in Hennepin
County, Minnesota, by Jean Mork Bredeson, the former President and
former owner of Service 800, making certain claims related to the
Company’s acquisition of Service 800, seeking in excess of $1.6
million in damages. The Company believes these claims to be
unfounded and the Company is continuing to vigorously defend itself
against this lawsuit. On March 16, 2020, the Company and Service
800 filed an answer, counterclaim and third-party claim against Ms.
Bredeson and defendants Allen Bredeson and Jeff Schwedinger, former
employees of Service 800.
In addition to
the above, from time to time, we may be involved in litigation in
the ordinary course of business. Other than as set forth above, we
are not currently involved in any litigation that we believe could
have a material adverse effect on our financial condition or
results of operations. Other than as set forth above, to our
knowledge, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the
knowledge of our executive officers or any of our subsidiaries,
threatened against or affecting our Company, our common stock, any
of our subsidiaries or any of our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision
could have a material adverse effect.
We know of no
material, active or pending legal proceedings against us, nor are
we involved as a plaintiff in any material proceedings or pending
litigation.
ITEM 4. MINE
SAFETY DISCLOSURES
Not
applicable.
PART
II
ITEM 5.
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Our stock is currently trading on the
OTCPink Marketplace operated by OTC Markets Group Inc. under
the symbol “BYOC”. Previously, on August 6, 2018, our common
stock began trading on the OTCQB Tier of the OTC Markets Group,
Inc.. Prior to that, our common stock had been traded on the
OTCPink Tier of the OTC Markets Group,
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Inc. The following table sets forth
the high and low sale prices for our Common Stock for each
quarterly period within the two most recent fiscal years. There has
been minimal reported trading to date in the Company’s common
stock.
The following table sets forth the high and low closing bid prices
for our Common Stock for the fiscal quarter indicated as reported
on the OTC. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent
actual transactions.
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Fiscal 2019
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Fiscal 2018
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High
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Low
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High
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Low
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First Quarter ended
March 31
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$
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0.0460
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$
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0.0438
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$
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0.1600
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$
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0.1325
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Second Quarter ended
June 30
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$
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0.0040
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$
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0.0036
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$
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0.1245
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$
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0.0255
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Third Quarter ended
September 30
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$
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0.0016
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$
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0.0013
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$
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0.1074
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$
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0.0550
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Fourth Quarter ended
December 31
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$
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0.0011
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$
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0.0009
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$
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0.0820
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$
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0.0200
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Holders of
Record
As of March 31, 2020, there were 1,627,914,678 shares of our common
stock issued and outstanding. There were 231 stockholders of record
at this time.
Dividends and Dividend Policy
We
have not previously declared nor paid any cash dividend on any
shares of our Series A Preferred Stock or our Common Stock, nor
have we determined to pay dividends on such shares in the
foreseeable future. We currently intend to retain future
earnings, if any, to finance the expansion of our business plan and
objectives. The permissibility to pay dividends on our shares
if restricted by Section 78.288 of the Nevada Revised Statutes,
which provides that a company may not issue a dividend if the
result of such dividend would be to make the company have negative
retained earnings. There can be no assurance that our
operations will result in sufficient revenues to enable us to
operate at profitable levels or to generate positive cash flows.
Furthermore, there is no assurance that the Board of
Directors will declare dividends even if profitable. Dividend
policy is subject to the Nevada Revised Statutes and the discretion
of our Board of Directors and will depend on, among other things,
our earnings, financial condition, capital requirements and other
factors that our Board of Directors considers significant.
RECENT SALES OF
UNREGISTERED SECURITIES
In the twelve
months ending December 31, 2019, there were no shares issued to
investors for cash. No underwriter participated in the foregoing
transactions, and no underwriting discounts or commissions were
paid, nor was any general solicitation or general advertising
conducted. The securities bear a restrictive legend and stop
transfer instructions are noted on our stock transfer records.
These shares were issued in offerings under Regulation D
promulgated under Section 4(2) of the Securities Act of 1933. The
company also compensated vendors and consultants with 10,825,000
shares in lieu of payment of $303,925, along with the issuance of
396,729,678 shares in lieu of convertible note payments of
$1,544,973. These issuances were exempt from registration under
section 4(1) of the Securities Act as sales by an issuer not
involving a public offering. During the twelve months ended
December 31, 2019, we issued 70,000,000 shares of common stock as
consideration for deposit for a potential acquisition with a fair
value of $427,000. These issuances were exempt from registration
under Section 4 (1) of the Securities Act of 1933, as amended, as
transactions by an issuer not involving any public
offering.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS.
As of
December 31, 2019, we had no compensation plans under which our
equity securities were authorized for issuance.
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PENNY STOCK REGULATION
Shares of our
common stock have been and will likely continue to be subject to
rules adopted the SEC that regulate broker-dealer practices in
connection with transactions in “penny stocks.” Penny stocks are
generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges
or quoted on the NASDAQ system, provided that current price and
volume information with respect to transactions in those securities
is provided by the exchange or system). The penny stock rules
require a broker-dealer, prior to a transaction in a penny stock
not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the SEC, which contains the
following:
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a
description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading;
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a
description of the broker’s or dealer’s duties to the customer and
of the rights and remedies available to the customer with respect
to violation to such duties or other requirements of securities’
laws;
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a
brief, clear, narrative description of a dealer market, including
“bid” and “ask” prices for penny stocks and the significance of the
spread between the “bid” and “ask” price;
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a
toll-free telephone number for inquiries on disciplinary
actions;
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definitions of significant terms in the disclosure document or in
the conduct of trading in penny stocks; and
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such
other information and is in such form (including language, type,
size and format), as the SEC shall require by rule or
regulation.
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Prior
to effecting any transaction in penny stock, the broker-dealer also
must provide the customer the following:
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the
bid and offer quotations for the penny stock;
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the
compensation of the broker-dealer and its salesperson in the
transaction;
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the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
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monthly account statements showing the market value of each penny
stock held in the customer’s account.
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In addition,
the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the
broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive
the purchaser’s written acknowledgment of the receipt of a risk
disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement. These disclosure requirements may have the effect of
reducing the trading activity in the secondary market for a stock
that becomes subject to the penny stock rules. Holders of shares of
our common stock may have difficulty selling those shares because
our common stock will probably be subject to the penny stock
rules.
ITEM 6.
SELECTED FINANCIAL DATA
Not
applicable.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Management’s Discussion and
Analysis or Plan of Operations includes a number of forward-looking
statements that reflect Management’s current views with respect to
future events and financial performance. You can identify these
statements by forward-looking words such as “may,” “will,”
“expect,” “anticipate,” “believe,” “estimate” and “continue,” or
similar words. Those statements include statements regarding the
intent, belief or current expectations of us and members of our
management team as well as the assumptions on which such statements
are based. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risk and uncertainties, and that actual results may
differ materially from those contemplated by such forward-looking
statements.
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Readers are urged to carefully review and consider the various
disclosures made by us in this report and in our other reports
filed with the Securities and Exchange Commission. Important
factors currently known to management could cause actual results to
differ materially from those in forward-looking statements. We
undertake no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of
unanticipated events or changes in the future operating results
over time. We believe that our assumptions are based upon
reasonable data derived from and known about our business and
operations. No assurances are made that actual results of
operations or the results of our future activities will not differ
materially from our assumptions. Factors that could cause
differences include, but are not limited to, expected market demand
for our products, fluctuations in pricing for our products, and
competition.
The following discussion provides
information that management believes is relevant to an assessment
and understanding of our past financial condition and plan of
operations. The discussion below should be read in conjunction with
the consolidated financial statements and related notes thereto
included elsewhere in this annual report.
About Beyond
Commerce
Beyond Commerce, Inc. was formed in the State of Nevada on January
12, 2006.
We
plan to operate within two markets: (1) the Business-to-Business
Internet Marketing Technology and Services market and (2) the
Information Management market. Our goal is to develop proprietary
software for digital transformation of clients’ existing content.
We believe our planned platform, strategy, and suite of software
products and services will provide secure and scalable information
control solutions for global companies. We believe our
planned software will assist organizations in finding, utilizing,
and sharing business information between devices in ways that are
intuitive, efficient and productive. We believe that our business
model will ensure that information will remain secure and private,
as necessitated by the current market climate.
In
addition, we plan to provide solutions which facilitate the
exchange of information and data transactions between supply chain
participants, such as manufacturers, retailers, distributors and
financial institutions. The goal is to automate potential client
internal processes thereby increasing productivity and lowering
costs. We plan to develop proprietary algorithms which it will
embed in the planned software to enable clients to access data and
gain insight into their business, through that data, leading to
improved internal decision making.
We
plan to offer the proposed software through traditional on-premise
solutions, SaaS as a cloud based solution, or a combination of
on-premise, SaaS or cloud based solutions. We plan to work with our
clients and their needs as to which delivery method they prefer. We
believe giving clients a choice and flexibility will help us to
obtain long-term client value.
Management believes that the Company will require additional
capital to manage its operations over the next 12 months. See
“Plan of Operations” below for a more complete discussion of
the Company’s capital requirements.
Recent
Developments
Service 800 Agreement
On December 14, 2017, we entered into an agreement with Service 800
and the sole shareholder of Service 800 (the “Shareholder”), and on
March 4, 2019 we purchased all of the issued and outstanding shares
of common stock of Service 800 from the Shareholder (the
“Transaction”). Service 800 operates as a premium provider of
Customer Feedback Management Platforms to their Fortune 500 and
1000 clients on a global basis. Service 800 provides survey
authoring, response rates, feedback types and data analysis on
their proprietary, cloud based, automated and centralized platform.
Service 800 has currently 40 full time employees that provide
services to 130 companies and 300 service organizations. Service
800’s current operations and strategic business plan is to further
develop its marketing and Customer Experience platform to use
within the framework of its current Fortune 500 and 1000
clients.
Upon the closing of the business combination, Jean Mork Bredeson,
Founder and President of Service 800, Inc., received $2,100,000 in
cash, and $2,100,000 in a three year 5.5% promissory note. The
$2,100,000 promissory note is personally guaranteed by Geordan
Pursglove Beyond Commerce’s President, CEO. On July 18, 2018 Jean
Mork Bredeson received 2,000,000 shares of Beyond Commerce’s
restricted common stock. On July 18, 2018 Allen Bredeson, Vice
President of Marketing and Client Relations, received 1,000,000
shares of Beyond Commerce’s restricted common stock. On July 18,
2018 Derick White, Vice President of Sales received 1,000,000
shares of Beyond Commerce’s restricted common stock, and Jeff
Schwendinger, Vice President of Operations on July 18, 2018
received 1,000,000 shares of
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Beyond Commerce’s restricted common
stock. Upon the closing of the business combination between Beyond
Commerce and Service 800, Beyond Commerce received 100% of Service
800 stock, assets consisting of the company’s website, customer
lists, current customer base, and customer’s in the company’s
pipeline and proprietary software.
Discover Growth Fund, LLC
On
August 7, 2018, we entered into a securities purchase agreement
(“SPA”) with Discover Growth Fund, LLC (“Discover”), pursuant to
which we issued a senior secured redeemable convertible debenture
in the principal amount of $2,717,391 (of which $217,391 was
retained by Discover as an original issue discount) (the
“Debenture”), in exchange for $500,000 cash consideration and a
promissory note issued by BYOC in the amount of $2,000,000 (the
“Note”). Pursuant to the terms of the SPA, we issued to
Discover a warrant to purchase up to 16,666,667 shares of our
common stock, exercisable beginning on the six (6) month
anniversary from the date of issuance for a period of three (3)
years at an exercise price of $0.15 per share (the “Warrant”).
The Debenture is subject to interest at a rate of 8.0% per
annum and be converted into shares of the Company’s common stock at
a price equal to the lower (i) $0.15 per share of common stock, and
(ii) if there has never been a trigger event (as defined in the
Debenture), (A) the average of the 5 lowest individual trades of
the shares of common stock, less $0.01 per share, or following any
such trigger event, (B) 60% of the foregoing. Further,
pursuant to the SPA we agreed to issue 2,500,000 shares of our
common stock to Discover at close of the transaction, and that
Discover would fund $2,000,000 in cash upon effectiveness of the
Company’s registration statement. The Discover transaction closed
on August 16, 2018. We issued the 2,500,000 shares of common stock
to Discover in 2019.
On
February 12, 2019, after effectiveness of its registration
statement the Company entered into the second tranche of funding
from the Discover Growth Fund, LLC for $2,000,000 of which funds
were utilized in the cash component of the Service 800, Inc.
transaction.
TCA Special Situations Credit Strategies ICAV
On
December 31, 2019, Beyond Commerce, Inc., a Nevada corporation (the
“Company”), entered into a securities purchase agreement (the
“Securities Purchase Agreement”) with TCA Special Situations Credit
Strategies ICAV, an Irish collective asset vehicle (the “Buyer” or
“TCA ICAV”), and TCA Beyond Commerce, LLC, a Wyoming limited
liability company (“TCA Beyond Commerce”), pursuant to which the
Buyer purchased from the Company a senior secured redeemable
debenture having an initial principal amount of $900,000 and an
interest rate of 16% per annum (the “Initial Debenture”).
Additional Debentures may be issued and funded, subject to and upon
the approval of the Company and the Buyer, provided that the total
value of the Initial Debenture and the Additional Debentures
together shall not exceed $5,000,000.
The
Securities Purchase Agreement was entered into as part of a larger
financing transaction between the Company and the Buyer. As part of
this financing transaction, the Company and the Buyer formed TCA
Beyond Commerce as a special purpose vehicle to complete the
Company’s acquisition of Customer Centered Strategies, L.L.C., a
Minnesota limited liability company (“CCS”), while using the funds
generated through the Company’s sale of the Initial Debenture. The
Company owns 80% of the outstanding common membership interests of
TCA Beyond Commerce (the “Common Units”) and the Buyer owns 2,000
Common Units, comprising the remaining 20% of the Common Units
issued, as well as 100% of the 250,000 Series A Preferred Units
issued and the sole Series B Preferred Unit issued (which is the
sole class of equity with voting rights). The Common Units and the
Series A Preferred Units are convertible into shares of the
Company’s common stock at a 10% discount to the lowest closing bid
price during the preceding 20 trading days and such equity will be
redeemed pursuant to the Company’s making of installment payments,
in accordance with the Operating Agreement of TCA Beyond Commerce.
The Company has pledged its interests in TCA Beyond Commerce to TCA
ICAV as security for the repayment of the Initial Debenture.
TCA
Beyond Commerce entered into a Membership Interest Purchase
Agreement (the “Membership Interest Purchase Agreement”), whereby
TCA Beyond Commerce acquired 100% of the authorized and issued
membership interests of CCS from its sole member (the “CCS
Seller”). TCA Beyond Commerce acquired the membership interests for
a purchase price $525,000 (the “CCS Purchase Price”), with $175,000
to be paid in cash and the remaining $350,000 to be paid through
TCA Beyond Commerce’s issuance of a convertible promissory note
with an original principal of $350,000 and a conversion feature
that provides the CCS Seller with the right to convert outstanding
principal and accrued interest into shares of the Company’s common
stock at a price based on the 10-day trailing average price of the
Company’s stock (the “CCS Purchase Note”).
Critical
Accounting Policies and Estimates
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Management’s discussion and analysis of the Company’s financial
condition and results of operations are based upon its consolidated
financial statements, which have been prepared in accordance with
generally accepted accounting principles in the United States of
America. The preparation of these financial statements requires
management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and the
related disclosure of contingent liabilities. On an on-going basis,
management evaluates past estimates and judgments, including those
related to bad debts, accrued liabilities, derivative liabilities,
and contingencies. Management bases its estimates on historical
experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different
assumptions or conditions. The Company believes the following
critical accounting policies affect its more significant judgments
and estimates used in the preparation of its consolidated financial
statements.
Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or
contribute to such differences include but are not limited to those
discussed below and elsewhere in this filing, particularly in the
section entitled “Risk Factors” beginning on page 14.
Use of Estimates
The preparation of consolidated financial statements and
accompanying notes in conformity with GAAP 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. Actual results could differ from those
estimates.
Estimates are used in the determination of depreciation and
amortization and the valuation for non-cash issuances of equity
instruments, web site, income taxes, and contingencies, among
others. Actual results could differ materially from these
estimates.
Cash and Cash Equivalents
The Company classifies as cash and cash equivalents amounts on
deposit in banks and cash temporarily in various instruments with
original maturities of three months or less at the time of
purchase. The Company’s cash management system is currently
integrated within one banking institution.
Fair Value of Financial Instruments
The carrying value of the current assets and liabilities
approximate fair value due to their relatively short
maturities.
Fair Value
Measurements
Statement of financial accounting standard FASB Topic 820,
Disclosures about Fair Value of Financial Instruments, requires
that the Company disclose estimated fair values of financial
instruments. The carrying amounts reported in the statements of
financial position for assets and liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
The
Company applies the fair value hierarchy as established by
GAAP. Assets and liabilities recorded at fair value in
the consolidated balance sheets are categorized based upon the
level of judgment associated with the inputs used to measure the
fair value as follows.
•
Level 1 – quoted prices in active markets for identical
assets or liabilities.
•
Level 2 – other significant observable inputs for the
assets or liabilities through corroboration with market data at the
measurement date.
•
Level 3 – significant unobservable inputs that reflect
management’s best estimate of what market participants would use to
price the assets or liabilities at the measurement date.
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Management considers all of its derivative liabilities to be Level
3 liabilities. At December 31, 2019 and 2018, the Company had
outstanding derivative liabilities, including those from related
parties of $1,433,403 and $2,480,543, respectively.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures
to cash flow, market or foreign currency risks. The Company
evaluates all of its financial instruments to determine if such
instruments are derivatives or contain features that qualify as
embedded derivatives. For derivative financial instruments that are
accounted for as liabilities, the derivative instrument is
initially recorded at its fair value and then is revalued at each
reporting date, with changes in fair value reported in the
consolidated statement of operations. For stock based derivative
financial instruments, Fair value accounting requires bifurcation
of embedded derivative instruments such as conversion features in
convertible debt or equity instruments, and measurement of their
fair value for accounting purposes. In determining the appropriate
fair value, the Company uses the Black-Scholes option-pricing
model. In assessing the convertible debt instruments, management
determines if the convertible debt host instrument is conventional
convertible debt and further if there is a beneficial conversion
feature requiring measurement. If the instrument is not considered
conventional convertible debt, the Company will continue its
evaluation process of these instruments as derivative financial
instruments.
Once determined, derivative liabilities are adjusted to reflect
fair value at the end of each reporting period. Any increase or
decrease in the fair value from inception is made quarterly and
appears in results of operations as a change in fair market value
of derivative liabilities.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the
provisions of ASC 360-10-35-21, Accounting for the Impairment of
Long-Lived Assets. This statement requires that long-lived
assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are
considered to be 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 amount or fair value less
costs to sell. Fair values are determined based on quoted market
value, discounted cash flows or internal and external appraisals,
as applicable. During 2018 and 2017, the Company did not recognize
any impairment charges.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30.
Deferred income tax assets and liabilities are determined
based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted
tax rates and laws that will be in effect when the differences are
expected to reverse. Deferred tax assets are reduced by a
valuation allowance to the extent management concludes it is more
likely than not that the assets will not be realized.
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. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income of the consolidated
statements of operations in the period that includes the enactment
date. A valuation allowance is provided when it is more likely than
not that some or all of the deferred tax assets may not be
realized.
The Company follows the guidance of ASC 740-10-25 in
determining whether tax benefits claimed or expected to be claimed
on a tax return should be recorded in the financial
statements. The Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements from
such a position should be measured based on the largest benefit
that has a greater than fifty percent (50%) likelihood of being
realized upon ultimate settlement. The Company recognizes
interest and penalties related to uncertain tax positions in income
tax expense. The Company had no material adjustments to its
liabilities for unrecognized income tax benefits.
Stock Based Compensation
During
the year ended December 31, 2019, the Company did not issue any
stock options. This Company’s existing stock plan expired on
September 11, 2018.
30
Table
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Employee Benefits
The Company during 2019 after the Service 800, Inc acquisition had
approximately forty (40) employees within this organization and
offers certain healthcare benefits to remain competitive within the
market place. The Company also hires independent drivers within
their IDriveYourCar affiliate.
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard
Board’s updates periodically to ensure the Company’s compliance of
its accounting policies and disclosure requirements to the
Codification Topics.
In January 2016, the FASB issued a new standard related to certain
aspects of recognition, measurement, presentation, and disclosure
of financial instruments. The standard will be effective for us
beginning January 1, 2019. We are currently evaluating the impact
of this standard on our financial statements, including accounting
policies, processes, and systems. The Company believes the
implementation of this new standard will not have a material impact
on the financial statements.
In February 2016, the FASB issued a new standard related to leases
to increase transparency and comparability among organizations by
requiring the recognition of right-of-use (“ROU”) assets and lease
liabilities on the balance sheet. Most prominent among the changes
in the standard is the recognition of ROU assets and lease
liabilities by lessees for those leases classified as operating
leases under current U.S. GAAP. Under the standard, disclosures are
required to meet the objective of enabling users of financial
statements to assess the amount, timing, and uncertainty of cash
flows arising from leases. We will be required to recognize and
measure leases existing at, or entered into after, the beginning of
the earliest comparative period presented using a modified
retrospective approach, with certain practical expedients
available.
The standard will be effective for us beginning January 1, 2019.
The standard may have a material impact on our balance sheets in
the future if we entered into new leases, but will not have a
material impact on our statement of operations. The most
significant impact will be the recognition of ROU assets and lease
liabilities for operating leases. We are currently evaluating
the impact of this standard on our financial statements, including
accounting policies, processes, and systems.
The Company will continue to monitor these emerging issues to
assess any potential future impact on its financial statements.
Financial
Presentation
The following sets forth a discussion and analysis of the Company’s
financial condition and results of operations for the fiscal years
ended December 31, 2019 and 2018. This discussion and analysis
should be read in conjunction with our consolidated financial
statements appearing elsewhere in this Form 10k. The following
discussion contains forward-looking statements. Our actual results
may differ significantly from the results discussed in such
forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to, those
discussed in “Risk Factors” beginning on page 14 of
this Form 10-K.
Results of
Operations
The
Company is no longer a shell as we commenced operations upon the
completion of the acquisition of Service 800, Inc., as of March
4th, 2019 and PathUX on May 31, 2019.
For the Years
Ended December 31, 2019 and 2018
Revenue
Revenue is $5,044,687 and zero for the year ended December 31, 2019
and 2018, respectively. The main attribute for the revenue pick-up
is through the acquisition of Service 800 and PathUX.
Operating Expenses
For
year ended December 31, 2019, operating expenses were $7,339,409
and for year ended December 31, 2018, operating expenses were
$1,760,810. The significant increase in operating expenses resulted
from cost of revenue of $1,692,932 and payroll of $2,106,872, as we
now have a significant amount of employees. Other items which
contributed
31
Table
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to the increase were $1,386,857 from general and
administrative expenses and depreciation of the assets acquired in
the acquisitions, in the amount of $646,667.
Non-operating income (expense)
The Company reported
non-operating expense of $3,169,799 and $2,535,429 during the year
ended December 31, 2019 and 2018, respectively. This increase of
$634,370 was due to the derivative expense and debt fees associated
with the Discover Growth Fund Note.
Net Income (Loss)
For year December 31,
2019, the Company incurred a net loss of $5,464,521 as compared to
a net loss of $4,296,240 for year ended December 31, 2018, which
was primarily due to a change in derivative liability and interest
on the Discover Note Payable. As of December 31, 2019, the Company
had an accumulated deficit of $48,227,200 and as of December 31,
2018, the Company had an accumulated deficit of $42,762,681
Plan of
Operations
We
are an early stage corporation that intends to operate as an
IMT&S provider. We have not yet generated or realized any
revenues from our business. As of December 31, 2019, we
currently have $680,809 cash on hand. Upon the closing of the TCA
transaction we received $900,000 in accordance with our securities
purchase agreement. At such time, we had sufficient capital
to satisfy our cash requirements in connection with our acquisition
of Customer Centered Strategies, LLC. Upon receipt of these
funds, however, we believe we will require additional funds of
approximately $1,000,000 to satisfy our cash requirements as we
implement our business plan and operate our business. This
capital will be used to build out our infrastructure, to provide
for the payment of advisory and accounting services, legal, lease
of our office space and anticipated up-listing fees to a national
securities exchange. However, there can be no assurance that we
will qualify for either exchange or that our application will be
approved.
Over
the course of the 12-month period, we plan to raise capital to
support our business plan through equity financing, debt financing,
or other sources, which may result in further dilution in the
equity ownership of our shares. There is no assurance that we will
be able to maintain operations at a level sufficient for an
investor to obtain a return on their investment in our common
stock, or that we will be able to raise sufficient capital required
to implement our business plan on acceptable terms, if at all. Even
if we are successful in raising sufficient capital to implement our
business plan, we may continue to be unprofitable.
Purchase of
Significant Equipment
We
do not anticipate the purchase or sale of any plant or significant
equipment during the next 12 months.
Going
Concern
There is substantial doubt about our ability to continue as a going
concern.
As
of December 31, 2019, we had an accumulated deficit of $48,227,200
and have generated nominal revenues. Since we discontinued
operations in 2012 the continuity of our future operations is
dependent upon our ability to increase sales and brand awareness.
These conditions raise substantial doubt about our ability to
continue as a going concern. We intend to continue relying
upon the issuance of debt and equity securities to finance our
operations. In this regard, we are restricted by the number
of shares available for issuance in an equity financing, and we
will likely need to increase our authorized capital in order to
take advantage of such financing. However, there can be no
assurance that we will be successful in obtaining shareholder
approval to increase our authorized capital. However, there can be
no assurance we will be successful in raising the funds necessary
to maintain operations, or that a self-supporting level of
operations will ever be achieved. The likely outcome of these
future events is indeterminable. Our financial statements do
not include any adjustment to reflect the possible future effect on
the recoverability and classification of the assets or the amounts
and classification of liabilities that may result should we cease
to continue as a going concern.
Liquidity and
Capital Resources
Our
ability to continue as a going concern is dependent on our ability
to raise additional capital and implement our business plan.
Since inception, we have been funded by related parties
through capital investment and borrowing of funds.
32
Table
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We had total current assets of $ 2,070,851 and $79,890 as of
December 31, 2019 and December 31, 2018, respectively.
Current assets would consist primarily of cash, the value of
software, trademarks patents, websites and other intellectual
properties. The Company had a $48,227,200 accumulated deficit on
its balance sheet as of December 31, 2019.
We had total current liabilities of $8,074,845 and $14,404,293 as of
December 31, 2019 and December 31, 2018, respectively.
Current liabilities consisted primarily of the accounts
payable, accrued payroll and payroll taxes, convertible debt and
interest. The decrease in our current liabilities is attributable
to the accrued interest and Pursglove judgment amount which was
forgiven in 2019.
We had a working capital deficit of $6,003,994 and $14,324,404 as
of December 31, 2019 and December 31, 2018, respectively.
This decrease of $8,320,410 resulted primarily from the
decrease the accrued interest and Pursglove judgment amount which
was forgiven in 2019 and the abandonment of the BoomJ liabilities
of $3,239,608.
Cash Flow from Operating Activities
For
the fiscal year ended December 31, 2019 and 2018, cash provided by
(used in) operating activities was ($1,178,434), and ($620,110),
respectively. Mainly attributable to the two acquisitions in
2019.
Cash Flow from
Investing Activities
For
the fiscal years ended December 31, 2019 and 2018, cash provided by
(used in) investing activities was ($1,120,647) and ($100,000),
respectively. Directly attributable to the two acquisitions in
2019.
Cash Flow from
Financing Activities
For
the fiscal years ended December 31, 2019 and 2018, cash provided by
(used in) financing activities was $2,900,000 and $800,000,
respectively. Attributable to the Discover Note and TCA Note
proceeds.
Contractual
Obligations
As a
“smaller reporting company,” we are not required to provide tabular
disclosure of contractual obligations.
Inflation
Inflation and changing prices have not had a material effect on our
business and we do not expect that inflation or changing prices
will materially affect our business in the foreseeable future.
Off-Balance Sheet
Arrangements
We
do not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity or capital expenditures
or capital resources that is material to an investor in our
securities.
Seasonality
In
the past, our operating results and operating cash flows
historically have not been subject to seasonal variations. This
pattern may change, however, in the event that we succeed in
bringing our planned products to market.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not applicable to a “smaller reporting company” as defined in Item
10(f)(1) of SEC Regulation S-K.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial
statements required by Item 8 are presented in the following
order:
33
Table
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TABLE OF
CONTENTS
|
|
Page
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-1
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 & 2018
|
F-3
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER
31, 2019 & 2018
|
F-4
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FOR THE YEARS ENDED
DECEMBER 31, 2019 & 2018
|
F-5
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE
YEARS ENDED DECEMBER 31, 2019 & 2018
|
F-6
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
F-7
|
34
Table
of Contents
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors
and
Stockholders of Beyond
Commerce, Inc.
Opinion on the Financial
Statements
We have audited the accompanying
balance sheets of Beyond Commerce, Inc. (the Company) as of
December 31, 2019 and 2018, and the related statements of
operations, changes in stockholders’ deficit, and cash flows for
each of the years in the two-year period ended December 31, 2019,
and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the
Company as of December 31, 2019 and 2018, and the results of its
operations and its cash flows for each of the years in the two-year
period ended December 31, 2019, in conformity with accounting
principles generally accepted in the United States of
America.
Consideration of the Company’s
Ability to Continue as a Going Concern
The accompanying financial statements
have been prepared assuming that the Company will continue as a
going concern. As discussed in Note 3 to the financial statements,
the Company has incurred losses, has not generated sufficient
revenue to cover its operating costs, and may be unable to raise
further equity in support of operations. These factors raise
substantial doubt about the Company’s ability to continue as a
going concern. Management’s plans regarding those matters are also
described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Basis for Opinion
These financial statements are the
responsibility of the Company’s management. Our responsibility is
to express an opinion on the Company’s financial statements based
on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement,
whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control
over financial reporting. As part of our audits, we are required to
obtain an understanding of internal control over financial
reporting, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our audits included performing
procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation
of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Haynie & Company
Salt Lake City, Utah
April 14, 2020
We have served as the
Company’s auditor since 2018.
F-1
Table
of Contents
BEYOND
COMMERCE, INC.
Financial Statements
For
the years ended December 31, 2019 and December 31, 2018
F-2
Table
of Contents
BEYOND
COMMERCE, INC.
CONSOLIDATED
BALANCE SHEETS
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
& cash equivalents
|
|
$
|
680,809
|
|
|
$
|
79,890
|
|
|
Accounts
receivable, net
|
|
|
1,365,813
|
|
|
|
-
|
|
|
Other
current assets
|
|
|
24,229
|
|
|
|
-
|
|
|
Total current assets
|
|
|
2,070,851
|
|
|
|
79,890
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, equipment, and software - net
|
|
|
1,009,757
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
4,859,879
|
|
|
|
-
|
|
|
Goodwill
|
|
|
1,299,144
|
|
|
|
-
|
|
|
Deposit
in Service 800, Inc.
|
|
|
-
|
|
|
|
572,000
|
|
|
|
|
$
|
9,239,631
|
|
|
|
651,890
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
597,777
|
|
|
$
|
79,833
|
|
|
Other
current liabilities
|
|
|
149,874
|
|
|
|
639,709
|
|
|
Accrued
payroll & related items
|
|
|
1,173,824
|
|
|
|
1,924,395
|
|
|
Derivative liability
|
|
|
1,433,403
|
|
|
|
2,480,543
|
|
|
Accrued payroll taxes
|
|
|
-
|
|
|
|
1,077,163
|
|
|
Short-term borrowings – net of discount
|
|
|
2,714,762
|
|
|
|
81,136
|
|
|
Short-term contingent acquisition
liability
|
|
|
1,951,205
|
|
|
|
-
|
|
|
Short-term borrowings- related party
|
|
|
54,000
|
|
|
|
-
|
|
|
Pursglove Judgment payable – accrued interest
|
|
|
-
|
|
|
|
2,363,192
|
|
|
Pursglove Judgment payable
|
|
|
-
|
|
|
|
5,758,322
|
|
|
Total current liabilities
|
|
|
8,074,845
|
|
|
|
14,404,293
|
|
|
Long-term borrowings, net of debt discount
|
|
|
3,119,785
|
|
|
|
143,478
|
|
|
Long-term contingent acquisition liability
|
|
|
1,048,795
|
|
|
|
-
|
|
|
Total
liabilities
|
|
|
12,243,425
|
|
|
|
14,547,771
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine Equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock series A, $0.001 par value of 250,000,000 shares
authorized and 249,999,900 and 250,000,000 shares issued and
outstanding, respectively.
|
|
|
250,000
|
|
|
|
250,000
|
|
|
Preferred stock series B, $0.001 par value of 20 shares authorized
and 20 and no shares issued and outstanding, respectively.
|
|
|
-
|
|
|
|
-
|
|
|
Stockholders Equity:
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value, 2,030,000,000 shares authorized,
1,495,004,678 and 1,017,450,000 issued and outstanding as of
December 30, 2019 and December 31, 2018, respectively.
|
|
|
1,495,004
|
|
|
|
1,017,450
|
|
|
Additional paid in capital
|
|
|
43,347,152
|
|
|
|
27,599,349
|
|
|
Accumulated deficit
|
|
|
(48,227,200
|
)
|
|
|
(42,762,680
|
)
|
|
Deficit attributable to Beyond Commerce, Inc stockholder
|
|
|
(3,135,044)
|
|
|
|
(13,895,881)
|
|
|
Equity attributable to noncontrolling interest
|
|
|
131,250
|
|
|
|
-
|
|
|
Total stockholders' deficit
|
|
|
(3,003,794
|
)
|
|
|
(13,895,881
|
)
|
|
Total liabilities and stockholders' deficit
|
|
$
|
9,239,631
|
|
|
$
|
651,890
|
|
The accompanying
notes are an integral part of these consolidated financial
statements.
F-3
Table
of Contents
BEYOND
COMMERCE, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
For the years
ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
5,044,687
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
1,692,932
|
|
|
|
-
|
|
|
Selling
general and administrative
|
|
|
1,386,857
|
|
|
|
226,882
|
|
|
Payroll
expense
|
|
|
2,106,872
|
|
|
|
360,000
|
|
|
Professional fees
|
|
|
1,506,081
|
|
|
|
1,173,928
|
|
|
Depreciation and amortization
|
|
|
646,667
|
|
|
|
-
|
|
|
Total costs and operating expenses
|
|
|
7,339,409
|
|
|
|
1,760,810
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from operations
|
|
|
(2,294,722)
|
|
|
|
(1,760,810)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount
|
|
|
(1,624,662)
|
|
|
|
(174,614)
|
|
|
Derivative related expenses
|
|
|
(1,930,395)
|
|
|
|
(1,109,769)
|
|
|
Change
in derivative liability
|
|
|
(1,070,076)
|
|
|
|
(346,516)
|
|
|
Gain on
abandonment of BoomJ
|
|
|
3,239,609
|
|
|
|
-
|
|
|
Acquisition cost impairment of PathUX
|
|
|
(427,000)
|
|
|
|
-
|
|
|
Acquisition cost impairment of Service 800, Inc.
|
|
|
(635,094)
|
|
|
|
-
|
|
|
Interest expense
|
|
|
(722,180)
|
|
|
|
(904,530)
|
|
|
Net
non-operating income (expense)
|
|
|
(3,169,798)
|
|
|
|
(2,535,429)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(5,464,520)
|
|
|
|
(4,296,239)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income tax
|
|
|
-
|
|
|
|
-
|
|
|
Net
loss
|
|
$
|
(5,464,520)
|
|
|
$
|
(4,296,239)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per common share-basic and diluted
|
|
$
|
(0.00)
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
basic
|
|
|
1,251,780,336
|
|
|
|
1,008,065,890
|
|
|
Weighted average number of common shared outstanding
diluted
|
|
|
1,251,780,336
|
|
|
|
1,008,065,890
|
|
The accompanying
notes are an integral part of these consolidated financial
statements.
F-4
Table
of Contents
BEYOND
COMMERCE, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
For the years ended
December
31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Net
(loss)
|
|
$
|
(5,464,520)
|
|
|
$
|
(4,296,239)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Change
in derivative liability
|
|
|
1,070,076
|
|
|
|
346,516
|
|
|
Depreciation and amortization
|
|
|
646,667
|
|
|
|
300,924
|
|
|
Amortization of debt discount
|
|
|
1,624,662
|
|
|
|
174,614
|
|
|
Loss on
derivative at note inception
|
|
|
3,221,311
|
|
|
|
1,109,769
|
|
|
Stock
issued for services
|
|
|
596,925
|
|
|
|
799,180
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Increase in accounts receivables
|
|
|
(271,285)
|
|
|
|
-
|
|
|
Decrease in current assets
|
|
|
31,191
|
|
|
|
-
|
|
|
Increase in accounts payable
|
|
|
25,635
|
|
|
|
147,137
|
|
|
Increase (decrease) in payroll liabilities
|
|
|
(909,215)
|
|
|
|
360,000
|
|
|
Increase (decrease) in other current liabilities
|
|
|
(369,029)
|
|
|
|
437,989
|
|
|
Net cash provided by operating activities
|
|
$
|
202,418
|
|
|
$
|
(620,110)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
(2,743,201)
|
|
|
|
-
|
|
|
Cash
acquired in acquisition
|
|
|
241,702
|
|
|
|
-
|
|
|
Deposit
for investment
|
|
|
-
|
|
|
|
(100,000)
|
|
|
Net cash used in investing activities
|
|
|
(2,501,499)
|
|
|
|
(100,000)
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Repayment of convertible notes
|
|
|
-
|
|
|
|
(150,000)
|
|
|
Cash
receipts from convertible notes payable
|
|
|
2,900,000
|
|
|
|
950,000
|
|
|
Net
cash provided by financing activities
|
|
|
2,900,000
|
|
|
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
$
|
600,919
|
|
|
$
|
79,890
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents, beginning balance
|
|
$
|
79,890
|
|
|
$
|
-
|
|
|
Cash and cash equivalents, ending balance
|
|
$
|
680,809
|
|
|
$
|
79,890
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
Cash
Paid For:
|
|
|
|
|
|
|
Interest
|
$
|
-
|
|
$
|
-
|
|
Income
taxes
|
$
|
-
|
|
$
|
-
|
|
Summary of Non-Cash Investing and Financing Information:
|
|
|
|
|
|
|
Stock
issued for conversion of debt
|
$
|
2,241,823
|
|
$
|
-
|
|
Notes
issued in relation to Service 800 acquisition
|
$
|
2,000,000
|
|
$
|
-
|
|
Notes
issued in relation to Customer Centered Strategies CCS
acquisition
|
|
350,000
|
|
|
-
|
|
Purchase Price holdback note on Service 800 acquisition
|
$
|
210,000
|
|
$
|
-
|
|
Purchase price allocation note on Service 800 acquisition
|
$
|
1,233,828
|
|
$
|
-
|
|
Stock
issued for acquisition deposit of PathUX
|
$
|
427,000
|
|
$
|
-
|
|
Abandonment of BoomJ, Inc.
|
$
|
3,239,608
|
|
|
|
|
Related
party debt forgiveness
|
$
|
8,360,224
|
|
|
-
|
The accompanying
notes are an integral part of these consolidated financial
statements.
F-5
Table
of Contents
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS
ENDED DECEMBER 31, 2018 AND 2019
AUDITED
|
|
|
Common
Stock
|
|
Series A & B
Preferred Stock
|
Non Controlling
|
|
Additional
|
Accumulated
|
Stockholders'
|
|
|
|
Shares
|
Par
Value
|
Shares
|
Par
Value
|
Interest
|
|
Paid in
Capital
|
Deficit
|
Deficit
|
|
Balance, December 31, 2017
|
1,000,000,000
|
$ 1,000,000
|
250,000,000
|
$ 250,000
|
$
-
|
$
-
|
$ 25,941,352
|
$ (38,466,441)
|
$ (11,275,089)
|
|
Common
stock issued for accounts payable conversion
|
|
4,000,000
|
4,000
|
-
|
-
|
|
|
373,600
|
-
|
377,600
|
|
Common
stock issued for services
|
|
8,450,000
|
8,450
|
-
|
-
|
|
|
790,730
|
-
|
799,180
|
|
Common
stock issued for acquisition of Service 800, Inc.
|
5,000,000
|
5,000
|
-
|
-
|
|
|
467,000
|
-
|
472,000
|
|
Beneficial Conversion Features
|
-
|
-
|
-
|
-
|
|
|
26,667
|
-
|
26,667
|
|
Net
loss
|
|
-
|
-
|
-
|
-
|
|
|
-
|
(4,296,239)
|
(4,296,239)
|
|
Balance, December 31, 2018
|
1,017,450,000
|
$ 1,017,450
|
250,000,000
|
$ 250,000
|
-
|
|
$ 27,599,349
|
$ (42,762,680)
|
$ (13,895,881)
|
|
Debt
forgiveness
|
|
|
|
|
|
|
|
8,360,224
|
|
8,360,224
|
|
Common
stock for debt conversion
|
|
396,729,678
|
396,729
|
|
|
|
|
1,066,687
|
|
1,463,416
|
|
Common
stock issued for services
|
|
10,825,000
|
10,825
|
-
|
-
|
|
|
293,100
|
-
|
303,925
|
|
Common
stock issued for acquisition of PathUX.
|
|
70,000,000
|
70,000
|
-
|
-
|
|
|
357,000
|
-
|
427,000
|
|
Value of
Warrants issued with debt
|
|
|
|
|
|
|
|
696,850
|
|
696,850
|
|
Preferred Series A Cancellation & Series B issuance
|
|
|
|
(100)
20
|
-
|
|
|
293,000
|
-
|
293,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest Customer Centered Strategies
|
|
|
|
|
|
131,250
|
|
|
|
|
|
Extinguishment of derivative liabilities on conversion Beneficial
Conversion Features
|
|
-
|
-
|
-
|
-
|
|
|
4,680,942
|
|
4,680,942
|
|
Net
loss
|
|
-
|
-
|
-
|
-
|
|
|
-
|
(5,464,520)
|
(5,464,520)
|
|
Balance, December 31, 2019
|
1,495,004,678
|
$ 1,495,004
|
249,999,920
|
$ 250,000
|
$131,250
|
|
$ 43,347,152
|
$ (48,227,200)
|
$ (3,003,794)
|
The accompanying
notes are an integral part of these consolidated financial
statements
F-6
Table
of Contents
BEYOND
COMMERCE, INC.
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Beyond
Commerce, Inc. ( the “Company”,”BCI” and “we”), has a planned
business objective to develop, acquire, and deploy disruptive
strategic software technology and market-changing business models
through selling our own products and the acquisitions of existing
companies. We plan to offer a cohesive digital product and services
platform to provide our future clients with a single point of
contact for all their internet Marketing Technology and Services
(IMT&S) and information Management (IM) initiatives.
Basis of Presentation
The
consolidated financial statements and the notes thereto for the
years ended December 31, 2019 and 2018 included herein include the
accounts of the Company, its wholly-owned subsidiaries Service 800
Inc., Path UX, IDriveYourCar and Customer Centered Strategies,
LLC., which the Company has an 80% investment interest.
The
consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”) and pursuant to the rules and regulations of the
SEC. All significant intercompany accounts and transactions
have been eliminated in consolidation.
NOTE 2.
ACCOUNTING POLICIES
Use of
Estimates
The preparation of consolidated financial statements and
accompanying notes in conformity with GAAP 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. Actual results could differ from those estimates.
Estimates are used in the determination of depreciation and
amortization and the valuation for non-cash issuances of equity
instruments, web site, income taxes, and contingencies, among
others. Actual results could differ materially from these
estimates.
Cash
and Cash Equivalents
The Company classifies as cash and cash equivalents amounts on
deposit in banks and cash temporarily in various instruments with
original maturities of three months or less at the time of
purchase. The Company’s cash management system is currently
integrated within one banking institution.
Fair Value of
Financial Instruments
The carrying value of the current assets and liabilities
approximate fair value due to their relatively short
maturities.
Fair Value
Measurements
Statement of financial accounting standard FASB Topic 820,
Disclosures about Fair Value of Financial Instruments, requires
that the Company disclose estimated fair values of financial
instruments. The carrying amounts reported in the statements of
financial position for assets and liabilities qualifying as
financial instruments are a reasonable estimate of fair
value.
The Company
applies the fair value hierarchy as established by
GAAP. Assets and liabilities recorded at fair value in
the consolidated balance sheets are categorized based upon the
level of judgment associated with the inputs used to measure the
fair value as follows.
• Level
1 – quoted prices in active markets for identical assets
or liabilities.
• Level
2 – other significant observable inputs for the assets or
liabilities through corroboration with market data at the
measurement date.
F-7
Table
of Contents
• Level
3 – significant unobservable inputs that reflect
management’s best estimate of what market participants would use to
price the assets or liabilities at the measurement date.
The
application of the three levels of the fair value hierarchy under
Topic 820-10-35 to our assets and liabilities are described
below:
|
|
|
December 31, 2019 Fair Value Measurements
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total Fair
Value
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Total
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities
|
|
$
|
|
|
|
$
|
-
|
|
|
$
|
1,433,403
|
|
|
$
|
1,433,403
|
|
|
Total
|
|
$
|
|
|
|
$
|
-
|
|
|
$
|
1,433,403
|
|
|
$
|
1,433,403
|
|
|
|
|
December 31, 2018 Fair Value Measurements
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total Fair
Value
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Total
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities
|
|
$
|
|
|
|
$
|
-
|
|
|
$
|
2,480,543
|
|
|
$
|
2,480,543
|
|
|
Total
|
|
$
|
|
|
|
$
|
-
|
|
|
$
|
2,480,543
|
|
|
$
|
2,480,543
|
|
Management
considers all of its derivative liabilities to be Level 3
liabilities. At December 31, 2019 and 2018, respectively the
Company had outstanding derivative liabilities, including those
from related parties of $1,433,403 and $2,480,543,
respectively.
Revenue
Recognition
The Company
recognize revenue in accordance with FASB ASC Subtopic 606-10,
Revenue Recognition. We recognize revenue as we transfer control of
deliverables (products, solutions and services) to our customers in
an amount reflecting the consideration to which we expect to be
entitled. To recognize revenue, we apply the following five step
approach: (1) identify the contract 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 a performance obligation is satisfied. We account for a
contract based on the terms and conditions the parties agree to,
the contract has commercial substance and collectability of
consideration is probable. The Company applies judgment in
determining the customer’s ability and intention to pay, which is
based on a variety of factors including the customer’s historical
payment experience.
The majority
of the Company’s revenue is generated by the completion of a
survey. Revenue is recognized and customers are billed at the point
in time a survey occurs or when a related service is complete. The
Company may require a deposit from new customers for set up costs
or as down payments. These amounts are not significant to the
financial statements. Revenue is also derived from PathUX’s
iDriveYourCar subsidiary, which matches professional chauffeurs
with passengers who want to be driven in their own car within the
New York City area. The Company maintains an exclusive network
independent drivers. Revenue is complete when the services are
provided traditionally through credit card payments.
Accounts
receivable
The Company’s
accounts receivable arise primarily from the sale of the Company’s
products. On a periodic basis, the Company evaluates each customer
account and based on the days outstanding of the receivable,
history of past write-offs, collections, and current credit
conditions, writes off accounts it considers uncollectible. With
most of our retail and distribution partners, invoices will
typically be due in 30 or 45 days. The Company does not accrue
interest on past due
F-8
Table
of Contents
accounts and the Company does not
require collateral. Accounts become past due on an
account-by-account basis. Determination that an account is
uncollectible is made after all reasonable collection efforts have
been exhausted. The Company has not provided any sales allowances
for December 31, 2019 and December 31, 2018,
respectively.
Property and
Equipment
Property and
equipment are carried at cost, and are being depreciated using the
straight-line over the estimated useful lives as follows:
|
Equipment,
Furniture and fixtures
|
5-7 years
|
|
Software
|
16-60
months
|
|
Vehicles
|
7 years
|
When retired
or otherwise disposed, the carrying value and accumulated
depreciation of the property and equipment is removed from its
respective accounts and the net difference less any amount realized
from disposition, is reflected in earnings. Expenditures for
maintenance and repairs which do not extend the useful lives of the
related assets are expensed as incurred.
Valuation of
Derivative Instruments
ASC 815 “Derivatives and Hedging” requires that embedded derivative
instruments be bifurcated and assessed, along with free-standing
derivative instruments such as warrants, on their issuance date and
measured at their fair value for accounting purposes. In
determining the appropriate fair value, the Company uses the
Black-Scholes option pricing formula. Upon conversion of a note
where the embedded conversion option has been bifurcated and
accounted for as a derivative liability, the Company records the
shares at fair value, relieves all related notes, derivatives and
debt discounts and recognizes a net gain or loss on debt
extinguishment.
Management used the following inputs to value the Derivative
Liabilities for the years ended December 31, 2019 and 2018,
respectively:
|
|
2019
Derivative
Liability
|
2018
Derivative
Liability
|
|
Expected
term
|
7monthsto1year
|
8monthsto2years
|
|
Exercise
price
|
$ 0.0006-$0.015
|
$ 0.012-$0.07466
|
|
Expected
volatility
|
171%-389 %
|
137.18%to436.68 %
|
|
Expected
dividends
|
None
|
None
|
|
Risk-free
rate
|
1.59%to2.55 %
|
2.48%to2.70 %
|
Derivative
Financial Instruments
The Company does not use derivative instruments to hedge exposures
to cash flow, market or foreign currency risks. The Company
evaluates all of its financial instruments to determine if such
instruments are derivatives or contain features that qualify as
embedded derivatives. For derivative financial instruments that are
accounted for as liabilities, the derivative instrument is
initially recorded at its fair value and then is revalued at each
reporting date, with changes in fair value reported in the
consolidated statement of operations. For stock based derivative
financial instruments, Fair value accounting requires bifurcation
of embedded derivative instruments such as conversion features in
convertible debt or equity instruments, and measurement of their
fair value for accounting purposes. In determining the appropriate
fair value, the Company uses the Black-Scholes option-pricing
model. In assessing the convertible debt instruments, management
determines if the convertible debt host instrument is conventional
convertible debt and further if there is a beneficial conversion
feature requiring measurement. If the instrument is not considered
conventional convertible debt, the Company will continue its
evaluation process of these instruments as derivative financial
instruments.
Once determined, derivative liabilities are adjusted to reflect
fair value at the end of each reporting period. Any increase or
decrease in the fair value from inception is made quarterly and
appears in results of operations as a change in fair market value
of derivative liabilities.
Purchase
Price Allocation
F-9
Table
of Contents
In accordance with ASC 805, Business Combinations, the Company
recorded the assets acquired and liabilities assumed at their
respective estimated fair values as of their respective acquisition
dates, based on internal company evaluations. The total estimated
purchase prices were allocated to the assets acquired and
liabilities assumed based on their estimated fair values.
Intangible
Assets
Intangible assets with a finite life
consist of Technology/Intellectual Property; Customer Base;
Tradename/Trademarks; Assembled Workforce; and Non–Compete
Agreements, and are carried at cost less accumulated amortization.
The Company amortizes the cost of identified intangible
assets on a
straight-line basis over the expected period of benefit, which is
generally three years for customer relationships and the
contractual term for covenants not to compete, which range
from five to ten years.
These intangible assets
of Technology/Intellectual Property; Customer Base;
Tradename/Trademarks; Assembled Workforce; and Non–Compete
Agreements were valued based on the appropriate application of the
Income, Market, and Cost Approaches. Accordingly, the Company
believes that these intangible assets will contribute to
its cash flows between two and ten years, with any excess carrying
value over the fair value being recognized as an impairment loss.
The Company performs its annual impairment test as of
December 31st of each year.
Goodwill
Goodwill is recognized
and initially measured as any excess of the acquisition-date
consideration transferred in a business combination over the
acquisition-date amounts recognized for the net
identifiable assets acquired. Goodwill is not
amortized but is tested for impairment annually, or more frequently
if an event occurs or circumstances change that would more likely
than not result in an impairment of goodwill. Impairment testing is
performed at the reporting unit level. A reporting unit is defined
as an operating segment or one level below an operating segment,
referred to as a component. A component of an operating segment is
a reporting unit if the component constitutes a business for which
discrete financial information is available and segment management
regularly reviews the operating results of that component. The
goodwill impairment analysis is a single-step quantitative
assessment that identifies both the existence of impairment and the
amount of impairment loss by comparing the estimated fair value of
a reporting unit to its carrying value, with any excess carrying
value over the fair value being recognized as an impairment loss,
limited to the total amount of goodwill allocated to that reporting
unit. The Company performs its annual goodwill impairment test as
of December 31st of each year and has identified one reporting unit
that currently carries a goodwill balance.
Impairment of
Long-lived Assets
The Company accounts for long-lived assets in accordance with the
provisions of ASC 360-10-35-21, Accounting for the Impairment of
Long-Lived Assets. This statement requires that long-lived
assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are
considered to be 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 amount or fair value less
costs to sell. Fair values are determined based on quoted market
value, discounted cash flows or internal and external appraisals,
as applicable. During 2019 and 2018, the Company did not recognize
any impairment charges.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30.
Deferred income tax assets and liabilities are determined
based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted
tax rates and laws that will be in effect when the differences are
expected to reverse. Deferred tax assets are reduced by a
valuation allowance to the extent management concludes it is more
likely than not that the assets will not be realized.
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. The effect on deferred tax assets
F-10
Table
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and liabilities of a change in tax rates is
recognized in income of the consolidated statements of operations
in the period that includes the enactment date. A valuation
allowance is provided when it is more likely than not that some or
all of the deferred tax assets may not be realized.
The Company follows the guidance of ASC 740-10-25 in
determining whether tax benefits claimed or expected to be claimed
on a tax return should be recorded in the financial
statements. The Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements from
such a position should be measured based on the largest benefit
that has a greater than fifty percent (50%) likelihood of being
realized upon ultimate settlement. The Company recognizes
interest and penalties related to uncertain tax positions in income
tax expense. The Company had no material adjustments to its
liabilities for unrecognized income tax benefits.
Stock Based
Compensation
During the years ending December 31, 2019 and 2018, the Company did
not issue any stock options. The former stock based compensation
plan expired on September 11, 2018.
Recent
Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard
Board’s updates periodically to ensure the Company’s compliance of
its accounting policies and disclosure requirements to the
Codification Topics.
In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)
and subsequently amended the guidance relating largely to
transition considerations under the standard in January 2017, to
increase transparency and comparability among organizations by
requiring the recognition of right-of-use (“ROU”) assets and lease
liabilities on the balance sheet. Most prominent among the changes
in the standard is the recognition of ROU assets and lease
liabilities by lessees for those leases classified as operating
leases under current U.S. GAAP. Under the standard, disclosures are
required to meet the objective of enabling users of financial
statements to assess the amount, timing, and uncertainty of cash
flows arising from leases.
The
standard was effective for us beginning January 1, 2019. The
adoption of this standard did not have a material effect on the
Company’s consolidated financial statements.
In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement
(Topic 820): Disclosure Framework - Changes to the Disclosure
Requirements for Fair Value Measurement, which eliminates certain
disclosure requirements for fair value measurements for all
entities, requires public entities to disclose certain new
information and modifies some disclosure requirements. The new
guidance is effective for fiscal years beginning after December 15,
2019 and for interim periods within those fiscal years. Early
adoption is permitted in interim periods, including periods for
which financial statements have not been issued or financial
statements have not been made available for issuance. The adoption
of this standard is not expected to have a material effect on the
Company’s consolidated financial statements.
The Company will continue to monitor these emerging issues to
assess any potential future impact on its financial statements. The
Company has taken the position that any future standards will not
be disclosed to the extent they are not material to our
operations.
NOTE 3. GOING
CONCERN
The company's
financial statements are prepared using generally accepted
accounting principles, which contemplate the realization of assets
and liquidation of liabilities in the normal course of business.
Because of recent events, the Company cannot state with
certainty of its ability to continue. The accompanying consolidated
financial statements for December 31, 2019 and 2018 have been
prepared assuming that we will continue as a going concern, which
contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.
The Company
has suffered losses from operations and has a working capital
deficit, which raise substantial doubt about its ability to
continue as a going concern. Management is taking steps to raise
additional funds to address its operating and financial cash
requirements to continue operations in the next twelve months.
Management has devoted a significant amount of time in attempting
to raise capital from additional debt and equity financing. Due to
its nominal revenues, the Company’s ability to continue as a going
concern is dependent upon raising additional funds through debt
F-11
Table
of Contents
and equity financing and generating
revenue, including through the recent acquisition of Service 800
and PathUX or through a merger transaction with a well-capitalized
entity. There are no assurances the Company will receive the
necessary funding or generate revenue necessary to fund operations.
If we are unable to obtain additional funds, or if the funds cannot
be obtained on terms favorable to us, we will be required to delay,
scale back or eliminate our plans to continue to develop and expand
our operations or in the extreme situation, cease operations
altogether.
NOTE
4 - PROPERTY, SOFTWARE AND COMPUTER EQUIPMENT
Property and equipment at December 31, 2019 and December 31,
2018 consisted of the following:
|
|
|
2019
|
|
|
2018
|
|
Office
and computer equipment
|
$
|
788,918
|
|
$
|
-
|
|
Furniture and fixtures
|
|
102,297
|
|
|
-
|
|
Software
|
|
1,213,043
|
|
|
-
|
|
Vehicles
|
|
27,172
|
|
|
-
|
|
Total
property, software and computer equipment
|
|
2,131,429
|
|
|
-
|
|
Less:
accumulated depreciation
|
|
(280,901)
|
|
|
-
|
|
|
$
|
1,009,757
|
|
$
|
-
|
Depreciation expense for the year ended December 31, 2019 was
$189,749, compared to $0 for the year in 2018.
NOTE
5 – INTANGIBLE ASSETS
Intangible Assets of the Company at December 31, 2019 and December
31, 2018 are summarized as follows:
|
|
December 31, 2019
|
|
|
December
31, 2018
|
|
|
Cost
|
Accumulated
|
Impairment of
|
Net
|
|
Net
|
|
|
|
Amortization
|
Asset
|
|
|
|
|
|
|
|
|
|
|
|
|
Tradename-Trademarks
|
$547,300
|
$45,608
|
$-
|
$501,692
|
|
$-
|
|
Assembled
Workforce
|
405,546
|
33,796
|
-
|
371,751
|
|
-
|
|
IP/Technology
|
176,000
|
29,333
|
-
|
146,667
|
|
-
|
|
Customer Base
|
1,972,000
|
164,333
|
358,462
|
1,449,205
|
|
-
|
|
Non-Competition
agreements
|
226,100
|
94,208
|
-
|
131,892
|
|
-
|
|
Customer Relationships
- PathUX
|
1,901,017
|
178,220
|
-
|
1,722,796
|
|
-
|
|
Customer Relationships
- CCS
|
535,877
|
-
|
-
|
535,877
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
|
$5,763,840
|
$545,499
|
$358,462
|
$4,859,879
|
|
$-
|
|
|
|
|
|
|
|
|
Amortization expense for the year ended December 31, 2019 was
$545,499 respectively, compared to $0 for the year 2018. The
Company also recorded an impairment charge regarding the final
valuation of the Service 800, Inc. initial valuation of
$358,462.
As of
December 31, 2019, future amortization expense is expected to
be:
|
|
|
|
Fiscal years ended December
31,
|
|
|
|
Amortization
|
|
2021
|
$850,763
|
|
2022
|
850,763
|
|
2023
|
822,007
|
|
2024
|
822,007
|
|
2025
|
822,007
|
|
Thereafter
|
692,332
|
|
Total
|
$4,859,879
|
F-12
Table
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Goodwill
The
carrying value of Goodwill for the years 2018 and 2019 is as
follows:
|
|
|
|
|
Service 800, Inc
|
|
Balance, December 31, 2017
|
$
-
|
|
Arising from Acquisition
|
-
|
|
Balance, December 31, 2018
|
$
-
|
|
Arising from Acquisition
|
1,299,144
|
|
Balance, December 31, 2019
|
$
1,299,144
|
NOTE 6. OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
|
|
|
December 31,
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Accrued
interest - notes
|
|
$
|
149,873
|
|
|
$
|
29,709
|
|
|
Accrued
interest – internal revenue service
|
|
|
-
|
|
|
|
610,000
|
|
|
Total other current liabilities
|
|
$
|
149,873
|
|
|
$
|
639,709
|
|
NOTE
7. SHORT AND LONG TERM BORROWINGS
|
Short-term and Long-term borrowings, consist of the following:
|
|
December
31,
|
|
|
December
31,
|
|
|
Short term debt;
|
|
2019
|
|
|
2018
|
|
|
Convertible Promissory Notes, bearing an annual interest rate of
15% secured, due 02/14/2019
|
|
|
50,000
|
|
|
|
50,000
|
|
|
Convertible Promissory Notes, bearing an annual interest rate of
12% secured, due 08/27/2019
|
|
|
199,181
|
|
|
|
250,000
|
|
|
Convertible Promissory Notes, bearing an annual interest rate of 8%
secured, due 08/07/2020
|
|
|
1,467,869
|
|
|
|
-
|
|
|
Total
short term debt
|
|
|
1,712,050
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
term debt;
|
|
|
|
|
|
|
|
|
|
Convertible Promissory Notes, bearing an annual interest rate of
5.0%, due 12/31/22
|
|
|
350,000
|
|
|
|
-
|
|
|
Senior
Secured Redeemable Debenture, bearing an annual interest rate of
16%, due 12/31/2021
|
|
|
900,000
|
|
|
|
|
-
|
|
Convertible Promissory Notes, bearing an annual interest rate of
15% secured, due 08/07/2020
|
|
|
-
|
|
|
|
717,391
|
|
|
Total
short-term and long-term borrowings, before debt discount
|
|
|
2,957,050
|
|
|
|
1,017,391
|
|
|
Less
debt discount
|
|
|
(594,202
|
)
|
|
|
(792,777
|
)
|
|
Total
short-term and long-term borrowings, net
|
|
$
|
2,372,848
|
|
|
$
|
224,614
|
|
|
Short-term and Long-term borrowings, acquisition related, consist
of the following:
|
|
|
|
|
|
|
|
|
|
Short-term borrowings – net of discount – acquisition
related
|
|
|
1,591,914
|
|
|
|
81,136
|
|
|
Long-term borrowings – net of discount – acquisition
related
|
|
|
1,869,785
|
|
|
|
143,478
|
|
|
Total
short-term and long-term borrowings – acquisition related
|
|
$
|
3,461,699
|
|
|
$
|
224,614
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
short-term and long-term borrowings – net of discount
|
|
|
2,372,848
|
|
|
|
224,614
|
|
|
Total
short-term and long-term borrowings – Acquisition related
|
|
|
3,461,699
|
|
|
|
-
|
|
|
Total
short-term and long-term borrowings
|
|
$
|
5,834,547
|
|
|
$
|
224,614
|
|
On August
7, 2018, we entered into a securities purchase agreement (“SPA”)
with Discover Growth Fund, LLC (“Discover”), pursuant to which we
issued a senior secured redeemable convertible debenture in the
principal amount of
F-13
Table
of Contents
$2,717,391 (of which $217,391 was
retained by Discover as an original issue discount) (the
“Debenture”), in exchange for $500,000 cash consideration and a
promissory note issued to BYOC in the amount of $2,000,000 (the
“Note”).
Pursuant to the terms of the SPA, we
issued to Discover a warrant to purchase up to 16,666,667 shares of
our common stock, exercisable beginning on the six (6) month
anniversary from the date of issuance for a period of three (3)
years at an exercise price of $0.15 per share (the “Warrant”).
The Debenture
is subject to interest at a rate of 8.0% per annum and can be
converted into shares of the Company’s common stock at a price
equal to the lower of (i) $0.15 per share of common stock, and (ii)
if there has never been a trigger event (as defined in the
Debenture), (A) the average of the 5 lowest individual trades of
the shares of common stock, less $0.01 per share, or following any
such trigger event, (B) 60% of the foregoing. However, at no time
can the debenture be converted at a price below $0.001 per
share.
During the
first quarter 2019 Discover Growth Fund LLC issued the additional
$2,000,000 to the Company and converted $1,060,486 of the aggregate
debt. During the current quarter Discover Growth Fund LLC converted
$61,000 of their outstanding debt and interest.
On September 14, 2018, the Company issued a short-term convertible
note payable for $50,000. The note was originally due on
February 14, 2019 and bears interest at a rate of 15% per annum.
The note is convertible into shares of common stock at $0.10
per share. The company is currently negotiating an extension with
the noteholder, and has paid $5,000 for accrued interest during the
third quarter. This note is currently past due and is being
negotiated to cure, nevertheless this note has no default
provisions.
On November
27, 2018, the Company received funding in conjunction with a
convertible promissory note and a security purchase agreement dated
November 27, 2018, in the amount of $250,000. The lender was Auctus
Fund LLC. The notes have a maturity of August 27, 2019 and interest
rate of 12% per annum and are convertible at a price of 60% of the
lowest trading price on the primary trading market on which the
Company’s Common Stock is then listed for the twenty-five (25)
trading days immediately prior to conversion. The note may be
prepaid, but carries a penalty in association with the remittance
amount, as there is an accretion component to satisfy the note with
cash. The Company is currently negotiating an extension with the
noteholder as it is currently past due. As a result of a default
provision, the interest rate has increased to 24%. The Company
during 2019 issued 112,829,802 shares of its common stock which
reduced the principal by 50,819 and paid interest of $25,035.
On December
31, 2019, Beyond Commerce, Inc., a Nevada corporation (the
“Company”), entered into a securities purchase agreement (the
“Securities Purchase Agreement”) with TCA Special Situations Credit
Strategies ICAV, an Irish collective asset vehicle (the “Buyer” or
“TCA ICAV”), and TCA Beyond Commerce, LLC, a Wyoming limited
liability company (“TCA Beyond Commerce”), pursuant to which the
Buyer purchased from the Company a senior secured redeemable
debenture having an initial principal amount of $900,000 and an
interest rate of 16% per annum (the “Initial Debenture”). The
Initial Debenture, and any future debentures that may be purchased
by Buyer pursuant to the Securities Purchase Agreement (the
“Additional Debentures”), is secured through an unconditional and
continuing security interest in all of the assets and properties,
including after acquired assets, of the Company and each of its
subsidiaries, which are acting as guarantors with respect to the
Company’s obligations under the Initial Debenture and any
Additional Debentures, pursuant to that certain Security Agreement,
dated December 31, 2019, entered into by the Company and TCA Beyond
Commerce in favor of the Buyer (the “Security Agreement”).In
addition, Geordan Pursglove, the Company’s CEO, delivered a
personal guaranty with respect to the Company’s obligations under
the Securities Purchase Agreement. The maturity date on this
security is December 31, 2021.
TCA
Beyond Commerce entered into a Membership Interest Purchase
Agreement (the “Membership Interest Purchase Agreement”), whereby
TCA Beyond Commerce acquired 100% of the authorized and issued
membership interests of CCS from its sole member (the “CCS
Seller”). TCA Beyond Commerce acquired the membership interests for
a purchase price $525,000 (the “CCS Purchase Price”), with $175,000
to be paid in cash and the remaining $350,000 to be paid through
TCA Beyond Commerce’s issuance of a convertible promissory note
with an original principal of $350,000 and a conversion feature
that provides the CCS Seller with the right to convert outstanding
principal and accrued interest into shares of the Company’s common
stock at a price based on the 10-day trailing average price of the
Company’s stock. The cash maturity date is December 31, 2022.
NOTE
8. ACQUISITION RELATED SHORT AND LONG TERM
BORROWINGS
F-14
Table
of Contents
|
Short-term and Long-term borrowings, acquisition
related, consist of the following:
|
|
December
31,
|
|
|
December
31,
|
|
Short term debt; acquisition related;
|
|
2019
|
|
|
2018
|
|
Short
term note – Jean Mork Bredeson Cash deficit holdback
|
|
|
210,000
|
|
|
|
-
|
|
Short
Term note – Jean Mork Bredeson Purchase allocation
|
|
|
1,381,914
|
|
|
|
-
|
|
Total
short-term debt, acquisition related
|
|
|
1,591,914
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Long
term debt; acquisition related;
|
|
|
|
|
|
|
|
|
Promissory Note – Jean Mork Bredeson, interest rate of 5.5%,
due 2/28/2022
|
|
|
2,100,000
|
|
|
|
-
|
|
Total
short-term and long-term borrowings, before debt discount
|
|
|
3,361,914
|
|
|
|
-
|
|
Less
debt discount
|
|
|
230,215
|
|
|
|
-
|
|
Total
short-term and long-term borrowings, acquisition related
|
|
$
|
3,461,699
|
|
|
$
|
-
|
Effective
February 28, 2019 as a component of the closing of the business
combination between Beyond Commerce, Inc. and Service 800, Jean
Mork Bredeson, Founder and President of Service 800, the Company
issued a $2,100,000 three year 5.5% promissory note. Interest only
payments are required during the first year of the note. The
$2,100,000 promissory note is personally guaranteed by George
Pursglove which in turn will be Geordan Pursglove since the passing
of the former CEO.
As a component of the Service 800 transaction, in lieu of the
entire cash payment of $2,100,000 being made to Ms. Bredeson, a
$210,000 amount was held out until May 30, 2019 and continues to be
outstanding. This note does not carry any interest obligations.
Also, as all cash and accounts receivables at the effective date of
the closing were to be retained by Ms. Bredeson this allocation of
cash is to be distributed quarterly on a non interest basis as
true-ups are derived, which amounted to $1,381,914 as of December
31, 2019.
NOTE
9. COMMON STOCK, WARRANTS AND PAID IN
CAPITAL
Common
Stock
As of December 31, 2019, our authorized capital stock consisted of
2,030,000,000 shares of common stock, par value $0.001 per share.
As of December 31, 2018, there were 1,017,450,000 issued and
outstanding shares of common stock.
On March 5, 2018, the Company’s board of directors increased the
authorized shares by 10,000,000 bringing the total authorized to
1,010,000,000. Subsequently on March 26, 2018, the Company’s board
of directors increased the authorized shares by another 40,000,000,
on August 9, 2018 increased another 50,000,000 and on February 11,
2019 increased another 800,000,000 shares, bringing the total
authorized to 1,900,000,000. On August 26, 2019, the Company filed
an amendment to its Articles of Incorporations to increase the
number of shares of authorized Common Stock to
2,030,000,000.
During the year ended December 31, 2019 the Company issued
396,729,678 shares valued at $1,463,417 for the conversion of
certain debt and accrued interest into shares of our stock. Also,
during these twelve months the Company issued 70,000,000 shares
valued at $427,000, which was based on the stock price for our
stock on the date of the close, in relation to the acquisition of
PathUX and 10,825,000 shares valued at $303,925 for services
provided in lieu of cash.
On March 27, 2020, the Company submitted for filing an amendment to
its Articles of Incorporation to increase the number of shares of
authorized Common Stock to 3,000,000,000.
Holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders, including the
election of directors. Except as otherwise required by law, the
holders of our common stock possess all voting power. Generally,
all matters to be voted on by stockholders must be approved by a
majority (or, in the case of election of directors, by a plurality)
of the votes entitled to be cast by all shares of our common stock
that are present in person or represented by proxy. A vote by
the holders of a majority of our outstanding shares is required to
effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our Articles of
Incorporation. Our Articles of Incorporation do not provide for
cumulative voting in the election of directors. Holders of our
common stock have no pre-emptive rights, no conversion rights and
there are no redemption provisions applicable to our common
stock.
F-15
Table
of Contents
Preferred Stock
We are
authorized to issue up to 250,000,000 shares of our “blank check”
preferred stock, par value of $0.001. Effective July 27, 2017, we
designated 250,000,000 of our “blank check” preferred shares as
Series A Preferred Stock, all of which are issued and outstanding.
Each share of Series A Preferred Stock entitles its holder to (i)
cumulative, non-participating dividends in preference and priority
to any declaration or payment of a dividend on any of the Company’s
common stock, at a rate of 12% per annum, and (ii) three times (3x)
voting preference over common stock. As of December 31, 2019
and 2018, there were 249,999,900 and 250,000,000 issued and
outstanding shares of Series A preferred stock.
Following cancellation of 100 shares of Series A preferred stock,
such 100 shares of preferred stock were returned to treasury,
increasing the number of shares of authorized undesignated
preferred stock from 0 to 100. The Board designated 51 of such 100
shares as Series B Preferred. Each share of Series B Preferred
carries approximately 1% of the voting power, but these shares do
not have any economic rights. The Board issued 20 shares of the
Series B Preferred to Geordan Pursglove; the remaining 31 shares of
Series B Preferred are authorized but unused. There are 49 shares
of authorized but undesignated preferred stock. The value of this
transaction is $293,000 based on an independent valuation of the
transaction. The value of this transaction is $293,000 based on an
independent valuation of the transaction.
Warrants
The Company entered into an agreement in 2018 in conjunction with
convertible notes payable to issue seven (7) warrants to purchase
shares of the Company’s common stock which have an exercise price
of $0.15 or 65% of the three lowest trading days within a 20-day
market price timeframe, whichever is lower. The warrants also
contain certain cashless exercise features. The issuance of these
warrants is predicated on the completion of the funding
requirements within the terms of the security agreement, however,
these funding requirements were never met. The Company is currently
negotiating a settlement with respect to any warrants.
Pursuant to the terms of the Discover Growth Fund SPA, we issued to
Discover warrant to purchase up to 16,666,667 shares of our common
stock upon the subsequent funding of the remaining $2,000,000 which
occurred on February 28, 2019, exercisable beginning on the nine
(9) month anniversary from the date of issuance for a period of
three (3) years at an exercise price of $0.15 per share (the
“Warrant”). In determining the appropriate fair value, the Company
uses the Black-Scholes option-pricing model, and based on the
relative fair value of the warrant and cash received, we recorded a
debt discount on the note principle of $696,850. Management used
the following inputs to value the Discover Warrants by Expected
Term – 3 years, Exercise Price - $0.15, Expected Volatility-
388.94%, Expected dividends – None, and Risk-Free Rate
– 2.54%
As of December 31, 2019, no warrants have vested.
2008
Equity Incentive Stock Option Plan
During the years ended December 31, 2019 and 2018, the Company did
not issue any stock options. This Company’s existing stock plan
expired on September 11, 2018.
Dividends
The Company anticipates that all future earnings will be retained
to finance future growth. The payment of dividends, if
any, in the future to the Company’s common stockholders is within
the discretion of the Board of Directors of the Company and will
depend upon the Company’s earnings, its capital requirements and
financial condition and other relevant factors. The
Company has not paid a dividend on its common stock and does not
anticipate paying any dividends on its common stock in the
foreseeable future but instead intends to retain all earnings, if
any, for use in the Company’s business operations.
NOTE
10. RELATED PARTIES
On May 2, 2017, the Pursglove judgement was reduced by $262,453
through the issuance of 250,000,000 shares of Series A Convertible
12% Cumulative Preferred stock. The Company also authorized and
issued 206,250,000 shares of BCI’s Series A Convertible 12%
Cumulative Preferred stock at a price of ($.001 par value) per
share to The 2GP Group LLC an entity controlled by Geordan
Pursglove, President, CEO and Director. The Series A Convertible
12% Cumulative Preferred stock include a three times (3x) voting
preference.
F-16
Table
of Contents
On May 8,
2019, the Company issued a short-term convertible note payable for
$54,000. The note had a sixty- day term which was due on July
8, 2019 and bears interest at a rate of 15% per annum. The
company is currently negotiating an extension with the noteholder
as it is currently past due, however the note has no default
provisions.
NOTE
11. INCOME TAXES
A reconciliation of the statutory income tax rates and the
Company’s effective tax rate is as follows:
|
|
|
December
31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Statutory U.S. federal rate
|
|
|
(21.00
|
)%
|
|
|
(21.00
|
)%
|
|
Permanent differences
|
|
|
6.0
|
%
|
|
|
6.0
|
%
|
|
Valuation allowance
|
|
|
15.00
|
%
|
|
|
15.00
|
%
|
|
Provision for income tax expense(benefit)
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
|
2019
|
|
|
2018
|
|
|
Deferred tax
assets:
|
|
|
|
|
|
|
|
Net operating
loss carry-forwards
|
|
$
|
5,507,812
|
|
|
$
|
5,569,969
|
|
|
Accrued
expenses
|
|
|
0
|
|
|
|
1,997,776
|
|
|
|
|
Total deferred tax
assets
|
|
$
|
5,507,812
|
|
|
$
|
7,567,745
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
(5,507,812
|
)
|
|
|
(7,567,745
|
)
|
|
Net deferred tax
asset
|
|
$
|
-
|
|
|
$
|
-
|
|
At December 31, 2019, the Company had estimated U.S. federal net
operating losses of approximately $26,227,700 for income tax
purposes which will expire between 2028 and 2029. For
financial reporting purposes, the entire amount of the net deferred
tax assets has been offset by a valuation allowance due to
uncertainty regarding the realization of the assets. The net
change in the total valuation allowance for the year ended December
31, 2019 was a decrease of $2,059,933 mainly attributable to timing
differences in accruals and NOL utilization in the current year.
The Company follows FASC 740-10-25 P which requires a company
to evaluate whether a tax position taken by the company will “more
likely than not” be sustained upon examination by the appropriate
tax authority. The Company has analyzed filing positions in
all of the federal and state jurisdictions where it is required to
file income tax returns, as well as all open tax years in these
jurisdictions. The Company believes that its income tax filing
positions and deductions would be sustained on audit and does not
anticipate any adjustments that would result in a material change
to its financial position. Therefore, no reserves for
uncertain income tax positions have been recorded.
The Company may not be able to utilize the net operating loss
carryforwards for its US income taxes in future periods should it
experience a change in ownership as defined in Section 382 of the
Internal Revenue Code (“IRC”). Under section 382, should the
Company experience a more than 50% change in its ownership over a 3
year period, the Company would be limited based on a formula as
defined in the IRC to the amount per year it could utilize in that
year of the net operating loss carryforwards. As of
December 31, 2019, the Company had not performed an analysis to
determine if the Company was subject to the provisions of Section
382. The Company is subject to U.S. federal income tax including
state and local jurisdictions. Currently, no federal or state
income tax returns are under examination by the respective taxing
jurisdictions.
The Company's accounting policy is to recognize interest and
penalties related to uncertain tax positions in income tax expense.
The Company has not accrued interest for any periods in which there
are uncertain tax positions.
F-17
Table
of Contents
NOTE 12. COMMITMENTS AND CONTINGENCIES
Legal Matters
A complaint against us, dated February 5, 2020, has been filed in
Hennepin County, Minnesota, by Jean Mork Bredeson, the former
President and former owner of Service 800, making certain claims
related to the Company’s acquisition of Service 800, seeking in
excess of $1.6 million in damages. The Company believes these
claims to be unfounded and the Company is continuing to vigorously
defend itself against this lawsuit. On March 16, 2020, the Company
and Service 800 filed an answer, counterclaim and third-party claim
against Ms. Bredeson and defendants Allen Bredeson and Jeff
Schwedinger, former employees of Service 800.
In 2008 the Company filed suit against its former co-founder,
President, Chief Executive Officer George Pursglove for breach of
confidentiality and non-compete while employed and also
postemployment, breach of fiduciary duty and other matters, and the
Company was seeking to enforce certain non-compete agreements.
The former CEO subsequently counter-sued the Company for
breach of contract, breach of implied covenant of good faith and
fair dealing and other matters. The former CEO was seeking to
be awarded $75,000 in cash plus at least 3.3 million shares of
stock of the Company. On July 28, 2011, the Company received
a jury verdict ordering and adjudging in Case Number
2:08-cv-00496-KJD-LRL where BOOMj.com was the Plaintiff and the
former CEO was the Defendant & Counterclaimant, that a judgment
be entered in favor of the Defendant and Counterclaimant against
the Plaintiff, BOOMj.com, in the amount of $20,775 for damages as
to the claim for failure to pay wages, $3,000,000 for damages as to
the conversion claim, and $3,000,000 for punitive damages. This
debt was forgiven during the third quarter in the amount of
$8,360,224 as the estate believed there was no future value on
holding this judgement against the Company and felt that the
elimination of this significant liability may provide better
avenues of funding going forward. The Company recorded this as an
adjustment to Additional Paid in Capital as this was a liability
assumed in previous years.
In addition to the above, from time to time, we may be involved in
litigation in the ordinary course of business. Other than as set
forth above, we are not currently involved in any litigation that
we believe could have a material adverse effect on our financial
condition or results of operations. Other than as set forth above,
to our knowledge, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the
knowledge of our executive officers or any of our subsidiaries,
threatened against or affecting our Company, our common stock, any
of our subsidiaries or any of our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision
could have a material adverse effect.
Operating Lease
We currently
lease virtual office space at 3773 Howard Hughes Parkway, Suite:
500 Las Vegas, NV 89169. We pay an annual fee of $120 for
this lease. During 2019, we intend to move the Company’s
headquarters to Florida. There is also a location in Minnesota for
Service 800, Inc. on February 20, 2020 the company moved Service
800, Inc. to 110 Cheshire Lane, Minnetonka Minnesota 55305. Service
800 leases 3,210 square feet of office space under an operating
lease agreement with Carlson Center East LLC. The lease, which
expires June 30, 2023, requires base monthly rents of $4,160, plus
operating expenses.
Tax
Lien
Gain on
disposal
NOTE
13. NET INCOME (LOSS) PER SHARE OF COMMON STOCK
The Company follows ASC 260-10, which requires presentation of
basic and diluted Earnings per Share (“EPS”) on the face of the
income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of
the basic EPS computation to the numerator and denominator of the
diluted EPS computation. In the accompanying consolidated financial
statements, basic net income (loss) per share of common stock is
computed by dividing the net income (loss) by the weighted average
number of shares of common stock outstanding during the year.
Basic net income (loss) per common share is based upon the
weighted average number of common shares outstanding during the
period. Dilution is computed by applying the treasury stock method.
Under this method, options and warrants are assumed to be exercised
at the beginning of the period (or at the time of issuance, if
later), and as if funds obtained thereby were used to purchase
common stock at the average market price during the period.
F-18
Table
of Contents
Convertible debt that is convertible into 2,603,664,933 and
39,834,276 shares of the Company’s common stock are not included in
the computation, along with 249,999,900 and 250,000,000 of the
Company’s preferred stock, for the years ended December 31, 2019
and 2018, respectively. Additionally, there are 16,666,667 and zero
warrants that are exercisable into shares of stock as of December
31, 2019 and December 31, 2018, respectively, and there is an
outstanding issue with Iliad, a former noteholder that claims
warrants as being issued and outstanding that could result in
1,308,286 shares being issued. The Company is currently in
negotiations over the issue. As warrants are exercisable above the
current market rate, they would be excluded from any dilute share
calculations.
The following is a reconciliation of the numerator and denominator
of the basic and diluted earnings per share computations for the
years ended December 31, 2019 and 2018:
|
|
|
Years ended
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Net
(loss)
|
$
|
(5,464,521)
|
|
$
|
(4,296,240)
|
|
Weighted average shares used for basic earnings per share
|
|
1,251,780,336
|
|
|
1,008,065,890
|
|
Incremental diluted shares
|
|
-
|
|
|
-
|
|
Weighted average shares used for diluted earnings per share
|
|
1,251,780,336
|
|
|
1,008,065,890
|
|
Net
income (loss) per share:
|
|
|
|
|
|
|
Basic
|
$
|
(0.00)
|
|
$
|
(0.00)
|
|
Diluted
|
$
|
(0.00)
|
|
$
|
(0.00)
|
NOTE
14. PROFORMA ACQUISITION FINANCIAL INFORMATION
Description of the
Transactions
Service 800,
Inc.
On March 4,
2019 Jean Mork Bredeson, Founder and President of Service 800,
Inc., received $1,890,000 in cash, a short term cash hold back of
$210,000 and $2,100,000 in a three year 5.5% promissory note. The
$2,100,000 promissory note is personally guaranteed by Geordan
Pursglove Beyond Commerce’s President, CEO. On July 18, 2018 Jean
Mork Bredeson received 2,000,000 shares of Beyond Commerce’s
restricted common stock, and directed the issuance of 3,000,000
additional shares to three other individuals as part of the
business combination as follows: On July 18, 2018 Allen Bredeson,
Vice President of Marketing and Client Relations, received
1,000,000 shares of Beyond Commerce’s restricted common stock.
Derick White, Vice President of Sales received 1,000,000 shares of
Beyond Commerce’s restricted common stock, and Jeff Schwendinger,
Vice President of Operations received 1,000,000 shares of Beyond
Commerce’s restricted common stock. The effective date of this
business combination between Beyond Commerce and Service 800, is
February 28, 2019, when Beyond Commerce received 100% of Service
800 stock, assets consisting of the company’s website, customer
lists, current customer base, and customer’s in the company’s
pipeline and proprietary software.
This acquisition combined resources and
customer base to support more productivity and help in the
development of new product lines. Beyond Commerce started
consolidating Service 800 Inc for financial reporting purposes as
of March 1, 2019. From the date of acquisition to
December 31, 2019, Service 800 reported revenue of $ 4,099,925.
The
fair value of the purchase consideration issued to Service 800 Inc.
was allocated to the net tangible assets acquired. The Company
accounted for the Acquisition as the purchase of
a business under GAAP under
the acquisition method of accounting, and the
assets and liabilities acquired were recorded as the acquisition date,
at their respective fair values and consolidated with those of the
Company. The fair value of the net assets acquired was
approximately $3,881,241. The excess of the aggregate fair value of
the net tangible assets has been allocated to goodwill of
$1,299,144. The company wrote down the asset value of Service 800,
Inc. by approximately $635,000 mainly attributable to the value of
the shares of stock issued to certain employees of Service 800,
Inc. as the belief this was not considered an essential component
of the transaction and not valued accordingly.
The following table
summarizes the estimated fair values of the assets acquired and
liabilities assumed based on external evaluations at the date of
acquisition:
F-19
Table
of Contents
|
Value of
considered paid:
|
|
|
|
|
Cash
at Closing
|
|
$
|
2,100,000
|
|
Promissory Note - discounted
|
|
|
1,781,241
|
|
Assets acquired
|
|
|
3,881,241
|
|
Assets Acquired:
|
|
|
|
|
|
Prepaid expenses
|
|
$
|
28,316
|
|
|
Property, plant and equipment
|
|
|
47,484
|
|
|
Intangible assets
|
|
|
2,921,400
|
|
|
Goodwill
|
|
|
1,299,144
|
|
|
Assets acquired
|
|
$
|
4,296,344
|
|
|
|
|
|
|
|
|
Liabilities
Assumed:
|
|
|
|
|
|
Accounts payable
|
|
$
|
121,958
|
|
|
Other current liabilities
|
|
|
293,145
|
|
|
Liabilities
assumed
|
|
$
|
415,103
|
|
|
|
|
|
|
|
|
Net assets
acquired
|
|
$
|
3,881,241
|
|
|
Fair value of
consideration given
|
|
$
|
3,881,241
|
|
PathUX,
LLC
On May 31,
2019, Robert Bisson, Christian Schine, and Ryan Rich, the three
members of PathUX, LLC, received an aggregate of 70,000,000 shares
of Beyond Commerce’s restricted common stock, valued at $427,000.
The $427,000 is reflected as deposit on the acquisition of PathUX
to be held in escrow pending the following alternatives, which
would encompass the return of these shares:
i.Ninety
(90) days after closing, Beyond Commerce, Inc. at the discretion of
the former PathUX LLC members shall owe $1,000,000 to the three
former members. The payment due date may be extended at the
discretion of the Company for an additional ninety (90) days, for a
total of one hundred eighty (180) days, through incremental cash
payment aggregating $300,000 of additional monetary
compensation.
ii.Company
will also during this time period, and once again at the discretion
of the former members, issue a $2,000,000 convertible promissory
note, which carries a two year quarterly amortizing payment
requirement of $317,068.40 starting on December 30, 2019, and an
8.0% interest rate. This note is fully amortized on June 30,
2021.
These acquisition liabilities are presented on the Company’s
financials as follow:
|
Short-term contingent acquisition liability
|
|
|
$ 1,951,205
|
|
Long-term contingent acquisition liability
|
|
|
1,048,795
|
|
Total contingent acquisition liability
|
|
|
$ 3,000,000
|
On June 4,
2019, Robert Bisson, received 31,500,000 shares of Beyond
Commerce’s restricted common stock, Christian Schine received
31,500,000 shares of Beyond Commerce’s restricted common stock, and
Ryan Rich, received 7,000,000 shares of Beyond Commerce’s
restricted common stock. The business combination between Beyond
Commerce and PathUX LLC, became effective May 31, 2019, when Beyond
Commerce received 100% of PathUX’s membership interests. PathUX’s
assets consist of the company’s website, customer lists, current
customer base, and customer’s in the company’s pipeline and
proprietary software. Beyond Commerce has not paid any
additional funds to the previous owners of PathUX as the extension
period has expired, therefore the Company has forfeited the
70,000,000 shares valued at $427,000.
F-20
Table
of Contents
The
following table summarizes the estimated fair values of the assets
acquired and liabilities assumed based on internal company
evaluations at the date of acquisition:
|
Assets Acquired:
|
|
|
|
|
|
Cash
|
|
$
|
9,066
|
|
|
Accounts
receivable
|
|
|
16,326
|
|
|
Proprietary
Software
|
|
|
1,063,441
|
|
|
Intangible
asset – customer list
|
|
|
2,070,110
|
|
|
Assets acquired
|
|
$
|
3,158,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
5,705
|
|
|
Other current
liabilities
|
|
|
153,238
|
|
|
Liabilities assumed
|
|
$
|
158,943
|
|
|
|
|
|
|
|
|
Net
assets acquired
|
|
$
|
3,000,000
|
|
|
Fair
value of consideration given
|
|
$
|
3,000,000
|
|
Customer Centered Strategies, LLC. (CCS)
On December 31, 2019 TCA Beyond Commerce, a joint venture which is
80% owned by Beyond Commerce entered into a Membership Interest
Purchase, whereby TCA Beyond Commerce acquired 100% of the
authorized and issued membership interests of CCS from its sole
member. TCA Beyond Commerce acquired the membership interests for a
purchase price $525,000 (the “CCS Purchase Price”), with $175,000
to be paid in cash and the remaining $350,000 to be paid through
TCA Beyond Commerce’s issuance of a convertible promissory note
with an original principal of $350,000 and a conversion feature
that provides the CCS with the right to convert outstanding
principal and accrued interest into shares of the Company’s common
stock at a price based on the 10-day trailing average price of the
Company’s stock.
In
addition to the CCS purchase price, the CCS and Service 800, Inc.,
entered into an employment agreement whereby the CCS will be
employed by Service 800 as Vice President of Operations and
Technologies for a period of six months.
The
following table summarizes the estimated fair values of the assets
acquired and liabilities assumed based on internal company
evaluations at the date of acquisition:
|
Assets Acquired:
|
|
|
|
|
|
Cash
|
|
$
|
37,597
|
|
|
Accounts
receivable
|
|
|
155,626
|
|
|
Prepaid
expense
|
|
|
2,500
|
|
|
Intangible
asset – customer list
|
|
|
535,877
|
|
|
Assets acquired
|
|
$
|
731,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
37,817
|
|
|
Other current
liabilities
|
|
|
37,534
|
|
|
Liabilities assumed
|
|
$
|
75,350
|
|
|
|
|
|
|
|
|
Net
assets acquired
|
|
$
|
656,250
|
|
|
Fair
value of consideration given:
|
|
|
|
|
|
Cash
|
|
$
|
175,000
|
|
|
Convertible note – 5%
|
|
|
350,000
|
|
|
Minority interest
|
|
|
131,250
|
|
|
Total
|
|
$
|
626,250
|
|
F-21
Table
of Contents
The following unaudited pro forma consolidated results of
operations have been prepared as if the acquisition of Service 800
Inc, and PathUX, and Customer Centered Strategies occurred on
January 1, 2018:
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Net
Revenues
|
|
$
|
7,312,278
|
|
|
$
|
6,632,611
|
|
|
Net
(loss) income from operations
|
|
|
(5,859,912)
|
|
|
|
(3,699,574)
|
|
|
Net
(loss) income per share from operations
|
|
|
(0.01)
|
|
|
|
(0.00)
|
|
|
Weighted average number of shares – basic and diluted
|
|
|
1,176,847,590
|
|
|
|
1,004,144,021
|
|
NOTE 15. Abandonment of BoomJ
Inc.
The Company
during the fourth quarter of 2019 abandoned the BoomJ Inc. entity
as there was believed to no future value to the organization.
Abandonment occurs either when a business terminates its operations
or when the asset is no longer profitable to operate. The
gain on this entity’s is the write off on Accounts Payable and
Accrued Liabilities for a total of $3,239,608.
NOTE 16. SUBSEQUENT EVENTS
Impact of Disease Outbreak and Management’s Plans
On March 11, 2020, the World Health Organization declared the
outbreak of a respiratory disease caused by a new coronavirus as a
“pandemic”. First identified in late 2019 and known now as
COVID-19, the outbreak has impacted thousands of individuals
worldwide. In response, many countries have implemented measures to
combat the outbreak which have impacted global business operations,
including drastic reductions or stoppages in international flights
by all major international airline carriers which are serviced by
the Company.
Majority of the states within the United States have issued a stay
at home order to its residents and have required closure of all
in-store retail restaurants. Accordingly, the Company’s revenues
associated with our business model has drastically declined through
date of the financial statements and its results of operations,
cash flows and financial condition have been negatively impacted by
the pandemic.
The impact of the disease outbreak, as of the date of the financial
statements, remains highly fluid and uncertain. The Company
is unable to predict, with any sort of certainty, the timing for
the end of international travel restrictions, along with the
subsequent recovery and resumption of normal operations of its
airline customer base. Similarly, the Company is unable to
predict the timing for resumption of normal purchasing activity
related to its freshly prepared meals business with its largest
customer. Accordingly, the financial impact on the results of
operations, cash flows and financial condition cannot be reasonably
estimated at this time. No impairments were recorded as of
the balance sheet date; however, due to significant uncertainty
surrounding the situation, management's judgment regarding this
could change in the future.
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles, which contemplate continuation of the Company as a
going concern. The Company has sustained operating losses in 2020
through the date of the financial statements as its revenue has
significantly decreased for reasons described above.
Management
believes the following actions being taken to revise the Company's
operations during the pandemic provide the opportunity for the
Company to continue as a going concern:
The
Company continues to maintain the business working with customers
to fit their needs - We are also offering COVID19 type services. We
have clients in the medical field and are offering to do survey
work for them in regards to their response for the COVID
outbreak so they can document how they are doing as a company. We
are in touch with our customers daily, we have even discussed
switching them from phone calls to web surveys until this has
passed. Along with the above the Company is applying for the
Paycheck Protection funds to assist in maintaining our employee
bas
F-22
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ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
TEM
9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
Our management, with the participation of our President
(“Certifying Officers”), has evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) as of the end of the fiscal
period covered by this Annual Report on Form 10-K. Based upon such
evaluation, the Certifying Officers have concluded that, as of the
end of such period, December 31, 2019, the Company’s disclosure
controls and procedures were not effective to ensure that
information required to be disclosed by us in the reports we file
or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules
and forms and is accumulated and communicated to management,
including our Certifying Officers, to allow timely decisions
regarding such disclosure.
Management’s report on internal control over financial
reporting
Management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for
the Company. The Company maintains processes designed by, or under
the supervision of the Company’s management, including but not
limited to the Company’s Chief Executive Officer and its Chief
Accounting Officer, or persons performing similar functions, and
effected by the Company’s board of directors, management and other
personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles including policies and procedures
that: (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and
disposition of the assets of the Company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures
of the issuer are being made only in accordance with authorization
of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
The Company has an Audit Committee that meets periodically with
management to review the manner in which they are performing their
responsibilities and to discuss auditing, internal accounting
controls and financial reporting matters.
Management has conducted an evaluation of the Company’s internal
control over financial reporting using the Internal
Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission as a basis to evaluate
effectiveness and determined that internal control over financial
reporting was not effective as of the end of the fiscal year ended
December 31, 2019. Based upon that evaluation, the Company’s
President concluded that the Company’s internal control over
financial reporting is not effective due to the material weakness
noted below. A material weakness is a control deficiency, or
combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a
material misstatement of the Company’s annual or interim financial
statements will not be prevented or detected on a timely basis. The
following material weakness has been identified. The Company
downsized its workforce in 2019 and at December 31, 2019 did not
have sufficient people with complex accounting expertise on certain
matters to support its internal control over financial reporting
which impacted its financial close process.
This annual report does not include an attestation report of the
Company’s registered public accounting firm regarding internal
control over financial reporting. Our internal control over
financial reporting was not subject to attestation by the Company’s
registered public accounting firm pursuant to temporary rules of
the SEC that permit the
36
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Company to provide only management’s report in
this annual report.
Changes in internal controls over financial reporting
There were no significant changes in the Company's internal control
over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) during the year ended December 31, 2018, that have
materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.
ITEM 9B.
OTHER INFORMATION
For the fourth quarter ended December 31, 2019, all items required
to be disclosed under Form 8-K were reported.
PART
III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
Information concerning our officers and directors follows.
MANAGEMENT
Executive Officers
and Directors
Set
forth below is certain information with respect to the individuals
who are our directors and executive officers as of the date of this
prospectus:
|
Name
|
|
Age
|
|
Position(s)
|
|
Date of
Appointment
|
|
|
|
|
|
|
|
|
|
Geordan Pursglove
|
|
32
|
|
Chief Executive
Officer, Secretary, Treasurer, and Chairman of the Board of
Directors
|
|
March 18, 2019
|
|
Peter M. Stazzone
|
|
67
|
|
Independent
Director
|
|
July 27, 2018
|
|
Robert E.
Honeyman
|
|
67
|
|
Independent
Director
|
|
July 27, 2018
|
|
Frederic S. Maxik
|
|
58
|
|
Independent
Director
|
|
July 30, 2018
|
Geordan Pursglove. Mr. Pursglove was appointed as President
on March 18, 2019. Prior to this Mr. Pursglove served as the
managing director of The 2GP Group LLC. During his time as the
Managing Director of The 2GP Group Mr. Pursglove had built multiple
businesses, in Sports, Sales, Marketing and Logistics. Prior to
forming The 2GP Group Mr. Pursglove attended Broward College from
2007 to 2011, Mr. Pursglove has spent time at the multiple
companies which his father co-founded, George D. Pursglove. He has
spent years becoming familiar with all aspects of the
businesses.
Peter M. Stazzone. Mr. Stazzone was appointed to
serve as a member of our Board of Directors on July 27, 2018.
Mr. Stazzone is an accomplished business leader and an
experienced board member in both the public and nonprofit sectors.
He has served on the board of the Italian Association, a
non-profit, since 2013, where he acts as Board Treasurer. Mr.
Stazzone served on the board of COMPTEL from 2013 to 2016, where he
oversaw the audit committee. He earned his Master of Business
Administration from DePaul University with a Master of Business
Administration, Finance and received earned his Bachelor of
Science, Accounting from the University of Illinois. He also is a
member of the American Institute of Certified Public Accountants
(AICPA).
We believe Mr. Stazzone is qualified to
serve on the board of directors because of his extensive audit
experience and as a director in both public companies and
non-profit organizations.
Robert E. Honeyman. Mr. Honeyman was appointed
to serve as a member of our Board of Directors on July 27, 2018.
He currently serves as a technology business consultant for
the Michigan Small Business Development Center, a position he has
held since 2015. He advises startup and early stage technology
companies based in Michigan. Prior to this, he served as Chief
Financial Officer and Senior Vice President of Finance for Advanced
Predictive Analytics from 2009 to 2015. Mr. Honeyman was Corporate
Controller and then Chief Financial Officer for DataCore Software
Corporation from
37
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1999 through 2009. As Corporate Controller, he
created the legal structure for DataCore’s international presence,
opening subsidiaries in Europe, Asia, and North America. He led the
due diligence efforts for five rounds of venture capital financing.
Mr. Honeyman also negotiated receivables-based loan agreements that
helped the company bridge and survive the tech crash of 2000-2003.
As CFO, Mr. Honeyman was a member of the executive management with
Board level responsibilities. Mr. Honeyman earned both a
bachelor’s degree in economics and an MBA in Finance from the
University of Michigan in Ann Arbor, MI.
We believe Mr. Honeyman is qualified to
serve on the board of directors because of his extensive experience
in advising early stage technology companies.
Frederic S. Maxik. Mr. Maxik was appointed to serve
as a member of our Board of Directors on July 30, 2018. He
currently serves as Chief Technology Officer of Lighting Science
Group Corp., a position he has held since January 2010 and from
June 2004 to October 2007. Mr. Maxik served as Lighting
Science Group Corp.’s Chief Scientific Officer from October 2007
and 2010 and as a director of their board from August 2004 to
October 2007. He has served as a member of their Board since
June 2014. After graduating from Bard College with a Bachelor
of Arts degree in physics and philosophy, Mr. Maxik began his
career with Sansui Electric Co., Ltd., in 1983 in Tokyo, Japan
where he became vice president of product development. In 1990, he
served as vice president of product development for Onkyo
Corporation in Osaka, Japan. In 1993, Mr. Maxik formed a product
development consulting firm. In 2002, he formed an environmental
products company, which developed the intellectual property that
eventually became the principal asset of Lighting Science, Inc. Mr.
Maxik’s research and innovation has resulted in the issuance of 175
U.S. patents in the field of solid state lighting. Mr. Maxik is
also a member of the expert advisory committee for Pegasus Capital
Advisors, L.P.
We believe Mr. Maxik is qualified to
serve on the board of directors because of his extensive experience
in innovative product development and lighting
technology.
Board
Composition
Corporate
Governance and Director Independence
Our
business and affairs are managed under the direction of our Board
of Directors, which consist of four members. The Company’s common
stock is currently listed for quotation on the OTCPink Marketplace
operated by OTC Markets Group Inc. In determining
whether any of its directors are independent, the Company has
applied the definition for “Independent Directors” set out in
Nasdaq Listing Rule 5605(a)(2), as the OTC Markets Group, Inc. does
not provide such a definition.
Under Nasdaq rules, independent directors must comprise a majority
of a listed company’s Board of Directors within a specified period
after completion of this offering. In addition, Nasdaq rules
require that, subject to specified exceptions, each member of a
listed company’s audit, compensation and nominating and governance
committees be independent, subject to certain phase-ins for
newly-public companies. Under Nasdaq rules, a director will only
qualify as an “independent director” if, in the opinion of that
company’s Board of Directors, that person does not have a
relationship that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director.
Audit committee members must also satisfy the independence criteria
set forth in Rule 10A-3 under the Exchange Act. In order to be
considered independent for purposes of Rule 10A-3, a member of an
audit committee may not, other than in his or her capacity as a
member of the audit committee, the board of directors, or any other
board committee (1) accept, directly or indirectly, any consulting,
advisory, or other compensatory fee from the listed company or any
of its subsidiaries or (2) be an affiliated person of the listed
company or any of its subsidiaries.
Our
Board of Directors has undertaken a review of its composition, the
composition of its proposed committees and the independence of each
director. Based upon information requested from and provided by
each director concerning his or her background, employment and
affiliations, including family relationships, our Board of
Directors has determined that Messrs. Fred Maxik, Robert E.
Honeyman and Peter M. Stazzone do not have any relationships that
would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director and that each of
these directors is “independent” as that term is defined under the
applicable rules and regulations of the SEC and the listing
requirements and rules of Nasdaq. In making this determination, our
Board of Directors considered the current and prior relationships
that each non-employee director has with our Company and all other
facts and circumstances our board of directors deemed relevant in
determining their independence, including the beneficial ownership
of our capital stock by each non-employee director.
38
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In
making this determination, our Board of Directors considered the
current and prior relationships that each non-employee director has
with our company and all other facts and circumstances our Board of
Directors deemed relevant in determining their independence,
including the beneficial ownership of our capital stock by each
non-employee director.
Family
Relationships
Geordan Pursglove, managing member of The 2GP Group LLC, which
holds 206,250,000 shares of Series A Preferred Stock, is the
President, CEO and Director of the Company, as well as the son of
Former CEO George Pursglove.
Board
Committees
Our
Board of Directors will consist of an audit committee, a
compensation committee and a nominating and corporate governance
committee. Our Board of Directors may establish other committees to
facilitate the management of our business. The expected composition
and functions of the audit committee, compensation committee and
nominating and corporate governance committee are described below.
Members will serve on committees until their resignation or until
otherwise determined by our Board of Directors.
Audit
Committee
Our
audit committee consist of Messrs. Maxik, Honeyman and Stazzone,
with Mr. Stazzone serving as the chairman. Our Board of Directors
has determined that Mr. Stazzone is an “audit committee financial
expert” within the meaning of the SEC regulations. Our Board of
Directors has also determined that each member of our audit
committee can read and understand fundamental financial statements
in accordance with applicable requirements. In arriving at these
determinations, the Board of Directors has examined each audit
committee member’s scope of experience and the nature of their
employment in the corporate finance sector. The functions of this
committee include:
|
|
●
|
selecting a qualified
firm to serve as the independent registered public accounting firm
to audit our financial statements;
|
|
|
|
|
|
|
●
|
helping to ensure the
independence and performance of the independent registered public
accounting firm;
|
|
|
|
|
|
|
●
|
discussing the scope
and results of the audit with the independent registered public
accounting firm, and reviewing, with management and the independent
accountants, our interim and year-end operating results;
|
|
|
|
|
|
|
●
|
developing procedures
for employees to submit concerns anonymously about questionable
accounting or audit matters;
|
|
|
|
|
|
|
●
|
reviewing our
policies on risk assessment and risk management;
|
|
|
|
|
|
|
●
|
reviewing related
party transactions;
|
|
|
|
|
|
|
●
|
obtaining and
reviewing a report by the independent registered public accounting
firm at least annually, that describes our internal quality-control
procedures, any material issues with such procedures, and any steps
taken to deal with such issues when required by applicable law;
and
|
|
|
|
|
|
|
●
|
approving (or, as
permitted, pre-approving) all audit and all permissible non-audit
services, other than de minimis non-audit services, to be performed
by the independent registered public accounting firm.
|
Compensation
Committee
Our
compensation committee consist of Messrs. Maxik, Honeyman and
Stazzone, with Mr. Honeyman serving as the chairman. The functions
of the compensation committee will include:
39
Table
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|
|
●
|
reviewing and
approving, or recommending that our Board of Directors approve, the
compensation of our executive officers;
|
|
|
|
|
|
|
●
|
reviewing and
recommending that our Board of Directors approve the compensation
of our directors;
|
|
|
|
|
|
|
●
|
reviewing and
approving, or recommending that our Board of Directors approve, the
terms of compensatory arrangements with our executive officers;
|
|
|
|
|
|
|
●
|
administering our
stock and equity incentive plans;
|
|
|
|
|
|
|
●
|
selecting independent
compensation consultants and assessing conflict of interest
compensation advisers;
|
|
|
|
|
|
|
●
|
reviewing and
approving, or recommending that our Board of Directors approve,
incentive compensation and equity plans; and
|
|
|
|
|
|
|
●
|
reviewing and
establishing general policies relating to compensation and benefits
of our employees and reviewing our overall compensation
philosophy.
|
Nominating and
Corporate Governance Committee
Our
nominating and corporate governance committee consist of Messrs.
Maxik, Honeyman and Stazzone, with Mr. Honeyman serving as the
chairman. The functions of the nominating and governance committee
will include:
|
|
●
|
identifying and
recommending candidates for membership on our Board of
Directors;
|
|
|
|
|
|
|
●
|
including nominees
recommended by stockholders;
|
|
|
|
|
|
|
●
|
reviewing and
recommending the composition of our committees;
|
|
|
|
|
|
|
●
|
overseeing our code
of business conduct and ethics, corporate governance guidelines and
reporting; and
|
|
|
|
|
|
|
●
|
making
recommendations to our Board of Directors concerning governance
matters.
|
The
nominating and corporate governance committee also annually reviews
the nominating and corporate governance committee charter and the
committee’s performance.
Board Leadership
Structure and Role in Risk Oversight
Due
to the small size and early stage of the Company, we have not
adopted a formal policy on whether the Chairman and Chief Executive
Officer positions should be separate or combined.
Our
board of directors is primarily responsible for overseeing our risk
management processes on behalf of our company. The board of
directors receives and reviews periodic reports from management,
auditors, legal counsel, and others, as considered appropriate
regarding our company’s assessment of risks. The board of directors
focuses on the most significant risks facing our company and our
company’s general risk management strategy, and also ensures that
risks undertaken by our Company are consistent with the board’s
appetite for risk. While the board oversees our company’s risk
management, management is responsible for day-to-day risk
management processes. We believe this division of responsibilities
is the most effective approach for addressing the risks facing our
company and that our board leadership structure supports this
approach.
Code of
Ethics
Our board of directors intends to adopt a code of ethics that our
officers, directors and any person who may perform similar
functions will be subject to.
Involvement in
Certain Legal Proceedings
40
Table
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To
our knowledge, our directors and executive officers have not been
involved in any of the following events during the past ten
years:
|
|
1.
|
any bankruptcy
petition filed by or against such person or any business of which
such person was a general partner or executive officer either at
the time of the bankruptcy or within two years prior to that
time;
|
|
|
|
|
|
|
2.
|
any conviction in a
criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
|
|
|
|
|
|
3.
|
being subject to any
order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from or otherwise limiting his
involvement in any type of business, securities or banking
activities or to be associated with any person practicing in
banking or securities activities;
|
|
|
|
|
|
|
4.
|
being found by a
court of competent jurisdiction in a civil action, the SEC or the
Commodity Futures Trading Commission to have violated a Federal or
state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated;
|
|
|
|
|
|
|
5.
|
being subject of, or
a party to, any Federal or state judicial or administrative order,
judgment decree, or finding, not subsequently reversed, suspended
or vacated, relating to an alleged violation of any Federal or
state securities or commodities law or regulation, any law or
regulation respecting financial institutions or insurance
companies, or any law or regulation prohibiting mail or wire fraud
or fraud in connection with any business entity; or
|
|
|
|
|
|
|
6.
|
being subject of or
party to any sanction or order, not subsequently reversed,
suspended, or vacated, of any self-regulatory organization, any
registered entity or any equivalent exchange, association, entity
or organization that has disciplinary authority over its members or
persons associated with a member.
|
ITEM 11. EXECUTIVE
COMPENSATION
The
following table sets forth the compensation for our fiscal years
ended December 31, 2019 and 2018 earned by or awarded to, as
applicable, our principal executive officer, principal financial
officer and our other most highly compensated executive officers as
of December 31, 2019.
|
Name and Principal
Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock Awards ($)
|
|
|
Option Awards ($)
|
|
|
All
Other Compensation ($)
|
|
|
Total Compensation ($)
|
|
|
George D.
Pursglove
|
|
|
2019
|
|
|
$
|
360,000*
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
30,000*
|
|
|
Chief Executive
Officer and Chairman
|
|
|
2018
|
|
|
$
|
360,000*
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
360,000*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geordan
Pursglove
|
|
|
2019
|
|
|
$
|
330,000*
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
330,000*
|
|
|
Chief Executive
Officer and Chairman
|
|
|
2018
|
|
|
$
|
0*
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0*
|
|
|
|
*
|
Represents accrued
but unpaid salaries during fiscal years 2019 and 2018.
|
There were no other salaries paid in 2019 and 2018 to any other
officer. No executive officer received total annual salary and
bonus compensation in excess of $100,000.
41
Table
of Contents
Summary of
Employment Agreements and Material Terms
George Pursglove. On June 1, 2017, we entered
into an employment agreement with Mr. Pursglove pursuant to which
he shall serve as the Company’s Chief Executive Officer and
Chairman. The agreement provides for annual base salary of
$360,000, payable for a period of three (3) years and provides for
other benefits as defined in the agreement. Mr. Pursglove’s
employment agreement further provides for the payment of severance
under certain conditions. If the Company terminates his
employment other than for “cause” or if Mr. Pursglove terminates
his employment for “reasonable basis,” Mr. Pursglove shall be
entitled to receive (i) his then in-effect base salary, bonuses and
incentive compensation, benefits and other compensation that he
would otherwise be entitled to receive through the remainder of his
term under the agreement; (ii) any bonuses and incentive
compensation for any preceding year or for the current year that
have been earned, but not been paid as of the effective date of
termination; and (iii) payment of all other accrued but unpaid
payment and benefits as of the effective date of termination.
Other than as set forth herein, we have not entered into any
employment or consulting agreements with any of our current
officers, directors or employees.
Outstanding Equity Awards at Fiscal Year End
As of the Company’s fiscal years ended December 31, 2019 and 2018,
the Company had no outstanding equity awards.
Director Compensation
The
Company plans to appoint additional directors and may reimburse its
directors for expenses incurred in connection with attending board
meetings. The Company has not paid any director's fees or other
cash compensation for services rendered as a director since our
inception to the date of this filing. The Company has no formal
plan for compensating its directors for their service in their
capacity as directors.
Compensation Committee Interlocks and Insider
Participation
The board of directors conducts reviews with regards to the
compensation of the directors and the Chief Executive Officer once
a year. To make its recommendations on such compensation, the
board of directors does take into account the types of compensation
and the amounts paid to officers of comparable publicly traded
companies.
ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Certain
Relationships and Related Party Transactions
On
July 27, 2017, we authorized the issuance of 250,000,000 shares of
Series A Preferred Stock to Mr. George Pursglove, further reducing
the July Judgment by $250,000.
On
August 15, 2017, Mr. Pursglove directed the issuance of (i)
206,250,000 shares of Series A Preferred Stock, valued at
approximately $206,250, to The 2GP Group, LLC, an entity controlled
by Geordan Pursglove, President, and (ii) 43,750,000 shares of
Series A Preferred Stock, valued at approximately $43,750, to Fiona
Oakley, an unrelated third party. As discussed elsewhere in
this Form 10-K, each share of Series A Preferred Stock entitles its
holder to (i) cumulative, non-participating dividends in preference
and priority to any declaration or payment of a dividend on any of
the Company’s common stock, at a rate of 12% per annum, and (ii)
three times (3x) voting preference over common stock.
On December 31, 2019 the Company canceled 100 shares of Series A
preferred stock which were owned by Mr. Pursglove through the
entity The 2GP Group LLC, Such 100 shares of preferred stock were
returned to treasurey, increasing the number of shares of
authorized undesignated preferred stock from 0 to 100. The Board
designated 51 of such 100 shares as Series B Preferred. Each share
of Series B Preferred carries approximately 1% of the voting power,
but these shares do not have any economic rights. The Board issued
20 shares of the Series B Preferred to Geordan Pursglove; the
remaining 31 shares of Series B Preferred are authorized but
unused. There are 49 shares of authorized but undesignated
preferred stock. The value of this transaction is $293,000 based on
an independent valuation of the transaction.
42
Table
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Other than the foregoing, we have not engaged in any transaction
within the past two completed fiscal years and the current fiscal
year, and do not plan to engage in any transaction with a related
person or a person with a direct or indirect material interest in
an amount that exceeds the lesser of (i) $120,000 or (ii) one
percent of the average of our total assets at year-end for the last
two completed fiscal years.
ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The
following table sets forth certain information with respect to the
beneficial ownership of our voting securities by (i) any person or
group owning more than 5% of any class of voting securities; (ii)
our director and chief executive officer; (iii) our chief financial
officer; and (iv) all executive officers and directors as a group
as of April 8, 2020. Unless otherwise indicated, the address of all
listed stockholders is c/o Beyond Commerce, Inc., 3773 Howard
Hughes Parkway, Suite 500 Las Vegas, NV 89169.
|
Name of Beneficial Owner
|
Common Stock Beneficially Owned (1)
|
Percentage of
Common Stock Owned (1)
|
Series A Preferred Stock Beneficially Owned (1)
|
Series A Percentage of Preferred Stock Owned (1)
|
Series B Preferred Stock Beneficially Owned (1)
|
Percentage of Series B Preferred Stock Owned (1)
|
Percentage of Voting Power (2)
|
|
Directors and Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geordan Pursglove
|
-
|
-
|
-
|
-
|
20
|
100%
|
28.98
|
|
Peter
Stazzone
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Frederic Maxik
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Robert Honeyman
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
All officers and directors (4 persons)
|
-
|
-
|
-
|
-
|
20
|
100%
|
28.98
|
|
|
|
|
|
|
|
|
|
|
The
2GP Group, LLC (3)
|
-
|
-
|
206,249,900
|
82.50
|
-
|
-
|
20.0
|
|
Fiona
Oakley(4)
|
1,556,632
|
*
|
43,750,000
|
17.50
|
-
|
-
|
4.18
|
|
Caledonian Bank Limited (5)
|
243,600,000
|
16.19
|
-
|
-
|
-
|
-
|
7.67
|
|
Eurolink Investment, Inc. (6)
|
96,000,000
|
6.38
|
-
|
-
|
-
|
-
|
3.02
|
|
Legion Trading LLC (7)
|
97,800,000
|
6.50
|
-
|
-
|
-
|
-
|
3.08
|
|
Universal Partners Corp. (8)
|
97,800,000
|
6.50
|
-
|
-
|
-
|
-
|
3.08
|
43
Table
of Contents
|
|
|
|
|
(1)
|
Applicable percentage ownership is based on 1,505,004,678 shares of
common stock outstanding 249,999,900 shares of Series A Preferred
Stock, and 20 shares of Series B Preferred Stock issued and
outstanding as of February 13, 2020. Under Rule 13d-3, a beneficial
owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which
includes the power to vote, or to direct the voting of shares; and
(ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to
be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by
a person if the person has the right to acquire the shares (for
example, upon exercise of an option) within 60 days of the date as
of which the information is provided. In computing the percentage
ownership of any person, the amount of shares outstanding is deemed
to include the number of shares beneficially owned by such person
(and only such person) by reason of these acquisition rights. As a
result, the percentage of outstanding shares of any person as shown
in this table does not necessarily reflect the person’s actual
ownership or voting power with respect to the number of shares of
common stock actually outstanding as of February 13, 2020.
|
|
|
(2)
|
Represents the number
of votes held on all matters submitted to a vote of our
stockholders. As of the date of this prospectus, we have
249,999,900 shares of Series A Preferred Stock issued and
outstanding, each entitled to three (3) votes per share, and 20
shares of Series B Preferred Stock issued and outstanding, each
entitled to three (3) votes per share. Each one (1) share of the
Series B Preferred Stock shall have voting rights equal to (x)
0.019607 multiplied by the total number of votes of issued and
outstanding shares of stock of the Company eligible to vote at the
time of the respective vote (the “Numerator”), divided by (y) 0.49,
minus (z) the Numerator.
|
|
|
|
|
|
|
(3)
|
The shares are held
by an entity controlled by Mr. Geordan Pursglove, President. Mr.
Geordan Pursglove, managing member, holds sole voting and
dispositive power over these shares. The address for The 2GP
Group, LLC is 222 Yamato Road, Suite 260, Boca Raton, FL 33431
|
|
|
|
|
|
|
(4)
|
The shares held by
Fiona Oakley were gifted to her by our President and Chief
Executive Officer.
|
|
|
|
|
|
|
(5)
|
The Caledonian Bank
Limited is controlled by Louise Cooper, who holds sole voting and
dispositive power over these shares. The address for this
holder is 69 Dr. Roy’s Dr., Grand Cayman KY1-1102, Cayman
Islands.
|
|
|
|
|
|
|
(6)
|
Eurolink Investments,
Inc. is controlled by Mariano Batz, who holds sole voting and
dispositive power over these shares. The address for Eurolink
Investments, Inc. is 25 Water Ln., P.O. Box 2059, Belize City,
Belize.
|
|
|
|
|
|
|
(7)
|
Legion Trading, LLC
is an entity controlled by Dorothy Godfrey, who holds sole voting
and dispositive power over these shares. The address for
Legion Trading, LLC is Hunkins Waterfront Plaza, P.O. Box 556,
Charleston West Indies, Nevis.
|
|
|
|
|
|
|
(8)
|
Universal Partners
Corp. is controlled by Lellia Sentcum, who holds sole voting and
dispositive power over these shares. The address for
Universal Partners Corp. is 66 Euphrates Ave., Belize City,
Belize.
|
|
|
|
|
(1)
|
Changes in
Control
There are currently no arrangements which would result in a change
in control of the Company.
ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES
Audit Fees
The aggregate
fees billed for the fiscal years ended December 31, 2018 and 2017
for professional services rendered by the principal accountant for
the audit of our annual financial statements and quarterly review
of the financial statements included in our Form 10-K or services
that are normally provided by the accountant in connection with
statutory
44
Table
of Contents
and regulatory filings or engagements
for those fiscal years were $121,000 and $66,000
respectively.
Tax Fees
For the
fiscal years ended December 31, 2019 and 2018, for professional
services related to tax compliance, tax advice, and tax planning
work by our principal accountants, we incurred expenses of $0 and
$0 respectively.
All Other Fees
Registration Statement and Acquisition audits of Service 800, Inc
which were completed for fiscal years ended December 31, 2019 and
2018 have fees associated with $ 50,000 and $43,000,
respectively.
PART IV
ITEM 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULES
45
Table
of Contents
|
3.6
|
|
Certificate of
Designation of Series A Convertible Preferred Stock filed with the
Secretary of State of the State of Nevada on July 27,
2017 (incorporated herein by reference to Exhibit 3.6 to
Form 10-12G filed with the Securities and Exchange Commission on
June 22, 2018)
|
|
3.7
|
|
Certificate of
Amendment filed with the Secretary of State of the State of Nevada
on March 5, 2018 (incorporated herein by reference to
Exhibit 3.7 to Form 10-12G filed with the Securities and Exchange
Commission on June 22, 2018)
|
|
3.8
|
|
Certificate of
Amendment filed with the Secretary of State of the State of Nevada
on March 28, 2018 (incorporated herein by reference to
Exhibit 3.8 to Form 10-12G filed with the Securities and Exchange
Commission on June 2, 2018)
|
|
3.9
|
|
Certificate of
Amendment filed with the Secretary of State of the State of Nevada
on August 9, 2018 (incorporated herein by reference to
Exhibit 3.9 to Form S-1 filed with the Securities and Exchange
Commission on October 9, 2018)
|
|
3.10
|
|
Certificate of
Correction to Certificate of Amendment filed with the Secretary of
State of the State of Nevada on August 10, 2018
(incorporated herein by reference to Exhibit 3.10 to Form S-1 filed
with the Securities and Exchange Commission on October 9, 2018)
|
|
3.11
|
|
Certificate of
Amendment filed with the Secretary of State of the State of Nevada
on September 27, 2018 (incorporated herein by reference to
Exhibit 3.1 to Form 8-K filed with the Securities and Exchange
Commission on September 27, 2018)
|
|
3.12
|
|
Certificate of
Amendment filed with the Secretary of State of the State of Nevada
on October 1, 2018 (incorporated herein by reference to
Exhibit 3.2 to Form 8-K filed with the Securities and Exchange
Commission on September 27, 2018)
|
|
3.13
|
|
Certificate of
Designation filed with the Secretary of State of the State of
Nevada on October 1, 2018 (incorporated herein by reference
to Exhibit 3.3 to Form 8-K filed with the Securities and Exchange
Commission on September 27, 2018)
|
|
4.1
|
|
Senior Secured
Redeemable Debenture, between Beyond Commerce, Inc. and TCA Special
Situation Credit Strategies ICAV, dated December 31,
2019 (incorporated herein by reference to Exhibit 4.1 to
Form 8-K filed with the Securities and Exchange Commission on
January 7, 2020)
|
|
4.2
|
|
Security Agreement,
between Beyond Commerce, Inc., TCA Beyond Commerce, Inc. and TCA
Special Situation Credit Strategies ICAV, dated December 31,
2019 (incorporated herein by reference to Exhibit 4.2 to
Form 8-K filed with the Securities and Exchange Commission on
January 7, 2020)
|
|
4.3
|
|
Convertible
Promissory Note, between TCA Beyond Commerce, LLC and Shannon
Gronemeyer, dated December 31, 2019 (incorporated herein
by reference to Exhibit 4.3 to Form 8-K filed with the Securities
and Exchange Commission on January 7, 2020)
|
|
10.1
|
|
Employment
Agreement by and between Beyond Commerce, Inc. and George
Pursglove, dated June 1, 2017 (incorporated herein by
reference to Exhibit 10.1 to Form 10-12G filed with the Securities
and Exchange Commission on June 22, 2018)
|
|
10.2
|
|
Securities Purchase
Agreement, by and between Beyond Commerce, Inc. and Iliad Research
and Trading, L.P., dated March 28, 2018 (incorporated
herein by reference to Exhibit 10.2 to Form 10-12G filed with the
Securities and Exchange Commission on June 22, 2018)
|
|
10.3
|
|
Form of Convertible
Promissory Note, dated March 28, 2018 (incorporated
herein by reference to Exhibit 10.3 to Form 10-12G filed with the
Securities and Exchange Commission on June 22, 2018)
|
|
10.4
|
|
Form of Warrant,
dated March 28, 2018 (incorporated herein by reference
to Exhibit 10.4 to Form 10-12G filed with the Securities and
Exchange Commission on June 22, 2018)
|
|
10.5
|
|
Stock Purchase
Agreement, by and between Service 800, Inc. and Beyond Commerce,
Inc., dated December 14, 2017 (incorporated herein by
reference to Exhibit 10.5 to Form 10-12G filed with the Securities
and Exchange Commission on June 22, 2018)
|
46
Table
of Contents
|
10.6
|
|
Convertible
Promissory Note, dated June 14, 2018 (incorporated
herein by reference to Exhibit 10.6 to Form 10-12G filed with the
Securities and Exchange Commission on June 22, 2018)
|
|
10.7
|
|
Form of Securities
Purchase Agreement, by and between Beyond Commerce, Inc. and
Discover Growth Fund, LLC, dated August 7, 2018
(incorporated herein by reference to Exhibit 10.7 to Form S-1 filed
with the Securities and Exchange Commission on October 9, 2018)
|
|
10.8
|
|
Form of Senior
Secured Redeemable Convertible Debenture, dated August 7,
2018 (incorporated herein by reference to Exhibit 10.8
to Form S-1 filed with the Securities and Exchange Commission on
October 9, 2018)
|
|
10.9
|
|
Form of Warrant,
dated August 7, 2018 (incorporated herein by reference
to Exhibit 10.9 to Form S-1 filed with the Securities and Exchange
Commission on October 9, 2018)
|
|
10.10
|
|
Form of Lender
Note, dated August 7, 2018 (incorporated herein by
reference to Exhibit 10.10 to Form S-1 filed with the Securities
and Exchange Commission on October 9, 2018)
|
|
10.11
|
|
Stock Purchase
Agreement, by and between Service 800, Inc. and Beyond Commerce,
Inc., dated December 14, 2017 (incorporated herein by
reference to Exhibit 10.5 to Form S-1/A filed with the Securities
and Exchange Commission on December 12, 2018)
|
|
10.12
|
|
Form of
Subordinated Convertible Promissory Note, by and between Beyond
Commerce, Inc and the individuals set forth on Exhibit A to the
Note (incorporated herein by reference to Exhibit 10.2 to
Form 8-K filed with the Securities and Exchange Commission on July
31, 2019)
|
|
10.13
|
|
Membership Unit
Purchase Agreement, among Path UX, LLC and Beyond Commerce, Inc.,
dated May 31, 2019 (incorporated herein by reference to
Exhibit 10.1 to Form 8-K filed with the Securities and Exchange
Commission on August 1, 2019)
|
|
10.13
|
|
Subordinated
Convertible Promissory Note, by and between Beyond Commerce, Inc.
and certain individuals, dated May 31, 2019
(incorporated herein by reference to Exhibit 10.2 to Form 8-K filed
with the Securities and Exchange Commission on August 1, 2019)
|
|
10.14
|
|
Security Agreement,
by and between Path UX, LLC and Beyond Commerce, Inc., dated May
31, 2019 (incorporated herein by reference to Exhibit
10.3 to Form 8-K filed with the Securities and Exchange Commission
on August 1, 2019)
|
|
10.15
|
|
Securities Purchase
Agreement, between Beyond Commerce, Inc., TCA Beyond Commerce, LLC
and TCA Special Situations Credit Strategies ICAV, dated December
31, 2019 (incorporated herein by reference to Exhibit
10.1 to Form 8-K filed with the Securities and Exchange Commission
on January 7, 2020)
|
|
10.16
|
|
Membership Interest
Purchase Agreement, between Customer Centered Strategies, LLC,
Shannon Gronemeyer and TCA Beyond Commerce, LLC, dated December 31,
2019 (incorporated herein by reference to Exhibit 10.2
to Form 8-K filed with the Securities and Exchange Commission on
January 7, 2020)
|
|
10.17
|
|
Amended and
Restated Limited Liability Company Agreement of TCA Beyond
Commerce, LLC, dated December 31, 2019 (incorporated
herein by reference to Exhibit 10.3 to Form 8-K filed with the
Securities and Exchange Commission on January 7, 2020)
|
|
31.1
|
*
|
Certification of
Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act.
|
|
32.1
|
*
|
Certification of
Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
101.INS
|
*
|
XBRL Instance
Document
|
|
101.SCH
|
*
|
XBRL Taxonomy
Extension Schema Document
|
|
101.CAL
|
*
|
XBRL Taxonomy
Extension Calculation Linkbase Document
|
|
101.DEF
|
*
|
XBRL Taxonomy
Extension Definition Linkbase Document
|
|
101.LAB
|
*
|
XBRL Taxonomy
Extension Label Linkbase Document
|
|
101.PRE
|
*
|
XBRL Taxonomy
Extension Presentation Linkbase Document
|
*Filed herewith
47
Table
of Contents
SIGNATURES
In
accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|
|
Beyond Commerce, Inc.
|
|
|
|
|
|
April
14, 2020
|
By:
|
/s/
Geordan Pursglove
|
|
|
|
Geordan Pursglove, President/CEO and Director
(Principal Executive,
Financial, and
Accounting Officer)
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons in the
capacities and on the date indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Geordan
Pursglove
|
|
President, CEO
|
|
April 14, 2020
|
|
Geordan Pursglove
|
|
(Principal Executive,
Financial and Accounting Officer)
|
|
|
|
/s/ Peter M.
Stazzone
|
|
Director
|
|
April 14, 2020
|
|
Peter M. Stazzone
|
|
|
|
|
|
/s/ Robert E.
Honeyman
|
|
Director
|
|
April 14, 2020
|
|
Robert E.
Honeyman
|
|
|
|
|
|
/s/ Frederic S.
Maxik
|
|
Director
|
|
April 14, 2020
|
|
Frederic S. Maxik
|
|
|
|
|
48
