U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarter ended: June 30, 2020

 

Or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from ___________ to____________

 

Commission File Number: 000-52490 

 

Beyond Commerce, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

98-0512515

(State or Other Jurisdiction of

 

(I.R.S. Employer

Incorporation or Organization)

 

Identification No.)

 

 

 

3773 Howard Hughes Pkwy, Suite 500

                                                                      Las Vegas, Nevada 89169

(Address of Principal Executive Offices)

 

        (702) 675-8022 

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

None

 

None

 

None

 

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 requirement for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically a every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,”


1


“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

Emerging growth company

 

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 12(b)-2 of the Exchange Act). Yes No

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At August 13, 2020, the registrant had 2,987,681,061 shares of common stock outstanding. 

 

 

 


2


 

 

Table of Contents

 

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)4 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS32 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.36 

ITEM 4. CONTROLS AND PROCEDURES36 

PART II – OTHER INFORMATION38 

ITEM 1. LEGAL PROCEEDINGS.38 

ITEM 1A. RISK FACTORS.38 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.38 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.39 

ITEM 4. MINE SAFETY DISCLOSURES.39 

ITEM 5. OTHER INFORMATION.40 

ITEM 6. EXHIBITS.41 

SIGNATURES42 


3


Table Of Contents


 PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

 

 

 

Beyond Commerce, Inc.

 

 

 

 

PICTURE 516  

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE- AND SIX-MONTH PERIODS ENDED

June 30, 2020 & 2019


4


Table Of Contents


 

 

BEYOND COMMERCE, INC.

 

TABLE OF CONTENTS

 

 

 

 

 

Page

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2020 & DECEMBER 31, 2019 (Unaudited)

6

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE-AND SIX-MONTH PERIODS ENDED JUNE 30, 2020 & 2019 (Unaudited)

7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 & 2019 (Unaudited)

8

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 & 2019 (Unaudited)

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

11


5


Table Of Contents


BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash & cash equivalents

 

$

302,702

 

 

$

585,339

 

Accounts receivable, net

 

 

1,140,659

 

 

 

1,347,813

 

Assets held for sale, current

 

 

-

 

 

 

113,470

 

Other current assets

 

 

70,446

 

 

 

24,229

 

Total current assets

 

 

1,513,807

 

 

 

2,070,851

 

Assets held for sale, long-term

 

 

 

 

 

2,695,085 

 

Property, equipment, and software - net

 

 

46,923

 

 

 

37,468

 

Intangible asset- net

 

 

2,898,331

 

 

 

3,137,083

 

Goodwill

 

 

1,299,144

 

 

 

1,299,144

 

 

 

 

 

 

 

 

 

 

 

 

$

5,758,205

 

 

 

9,239,631

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 $

726,356

 

 

 $

597,777

 

Other current liabilities

 

 

409,344

 

 

 

149,873

 

Accrued payroll & related items

 

 

1,053,301

 

 

 

1,015,180

 

Derivative liability

 

 

424,748

 

 

 

1,433,403

 

Short-term borrowings – net of discount

 

 

3,253,249

 

 

 

2,714,762

 

Liabilities of assets held for sale, current

 

 

-

 

 

 

2,109,850

 

Short-term borrowings- related party

 

 

54,000

 

 

 

54,000

 

Total current liabilities

 

 

5,920,998

 

 

 

8,074,845

 

 

 

 

 

 

 

 

 

 

Long-term borrowings – net of discount

 

 

3,172,909

 

 

 

3,119,785

 

Liabilities of assets held for sale, long-term

 

 

-

 

 

 

1,048,795

 

Total liabilities

 

 

9,093,907

 

 

 

12,243,425

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mezzanine Equity:

 

 

 

 

 

 

 

 

Preferred stock series A, $0.001 par value of 249,999,900 shares authorized and 249,999,900 and 249,999,900 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, 3,000,000,000 shares authorized, 2,517,681,061 and 1,495,004,678 issued and outstanding as of June 30, 2020 and at December 31, 2019, respectively.

 

 

2,517,680

 

 

 

1,495,004

 

Additional paid in capital

 

 

44,580,576

 

 

 

43,347,152

 

Accumulated deficit

 

 

(50,787,793)

 

 

 

(48,227,200)

 

Deficit attributable to Beyond Commerce, Inc stockholder

 

 

(3,439,537)

 

 

 

(3,135,044)

 

Equity attributable to noncontrolling interest

 

 

103,835

 

 

 

131,250

 

Total stockholders' deficit

 

 

(3,335,702)

 

 

 

(3,003,794)

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$

5,758,205

 

 

$

9,239,631

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


6


Table Of Contents


BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE & SIX-MONTH ENDED JUNE 30,

UNAUDITED

 

 

 

For the three months ended

June 30,
2020

 

 

For the three months ended June 30,
2019

 

 

For the six months ended June 30,
2020

 

 

For the six months ended June 30,
2019

Revenues

 

$

782,009

 

 

$    1,213,928

 

$

2,029,599

 

 

$

 

       1,677,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

248,017

 

 

 

343,030

 

 

 

670,437

 

 

 

455,084

 

Selling, general and administrative

 

 

348,117

 

 

 

324,643

 

 

 

652,152

 

 

 

445,686

 

Payroll expense

 

 

588,057

 

 

 

665,647

 

 

 

1,257,166

 

 

 

942,368

 

Professional Fees

 

 

213,582

 

 

 

363,871

 

 

 

463,741

 

 

 

493,162

 

Depreciation and amortization

 

 

124,206

 

 

 

160,296

 

 

 

247,646

 

 

 

213,887

 

Total operating expenses

 

 

1,521,979

 

 

 

1,857,487

 

 

 

3,291,142

 

 

 

2,550,187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(739,970)

 

 

 

(643,559)

 

 

 

(1,261,543)

 

 

 

(872,345)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(646,354)

 

 

 

(190,163)

 

 

 

(903,747)

 

 

 

(405,574)

 

Amortization of debt discount

 

 

(249,823)

 

 

 

(419,410)

 

 

 

(548,651)

 

 

 

(988,867)

 

Derivative related expenses

 

 

(1,130,476)

 

 

 

(464,501)

 

 

 

(1,252,075)

 

 

 

(1,586,500)

 

Change in derivative liability

 

 

623,399

 

 

 

(3,461,569)

 

 

 

1,027,308

 

 

 

(5,079,981)

 

Total non-operating income (expense)

 

 

(1,403,254)

 

 

 

(4,535,643)

 

 

 

(1,677,165)

 

 

 

(8,060,859)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income tax

 

 

(2,143,224)

 

 

 

(5,179,202)

 

 

 

(2,938,708)

 

 

 

(8,933,204)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operation, net of tax

 

 

-

 

 

 

11,194

 

 

 

350,700

 

 

 

11,194

 

Provision for income tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net loss

 

$

(2,143,224)

 

 

$

(5,168,008)

 

 

$

(2,588,008)

 

 

$

(8,922,010)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts Attributable to Noncontrolling and Controlling Interest

 

 

 

 

 

 

Consolidated net income (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 Noncontrolling interest

$

 

(7,215)

 

 

$

-

 

 

$

(27,415)

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net loss, controlling interest

$

 

(2,136,009)

 

 

$

(5,168,008)

 

 

$

(2,560,593)

 

 

$

(8,922,010)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share-basic and diluted

 

$

(0.00)

 

 

$

(0.01)

 

 

$

(0.00)

 

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of capital outstanding –(basic and diluted)

 

 

1,906,073,735

 

 

 

1,140,710,865

 

 

 

1,725,314,701

 

 

 

1,092,248,763

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.


7


Table Of Contents


BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30,

(Unaudited)

   

 

 

 

 

 

  

 

2020

 

 

2019

Net loss

$

(2,588,008)

 

$

(8,922,010)

Income from discontinued operations 

 

350,700

 

 

11,194

Cash flows from operating activities: 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Stock issued for services

 

 

 

303,925

Loss on derivative

 

1,812,208

 

 

1,775,356

Amortization of debt discount

 

548,651

 

 

988,867

Depreciation and amortization

 

247,647

 

 

213,887

Change in derivative liability

 

(1,027,308)

 

 

5,079,918

Changes in assets and liabilities:

 

 

 

 

 

(Increase) decrease in accounts receivable

 

207,154

 

 

200,932

(Increase) decrease in other current assets

 

(48,337)

 

 

15,619

Increase (decrease) in accounts payable

 

129,190

 

 

(341,910)

Increase (decrease) in payroll liabilities

 

38,121

 

 

371,549

Increase (decrease) in other current liabilities

 

285,194

 

 

366,205

Net cash provided by (used in) in operating activities.

$

(746,188)

 

$

41,144

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Acquisition of property and equipment

 

(16,230)

 

 

(2,209,074)

Cash acquired in acquisition

 

-

 

 

195,039

Net cash used in investing activities

$

(16,230)

 

 

(2,014,035)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Repayment of Convertible Notes

 

(40,000)

 

 

-

Cash receipts from notes payable

 

519,781

 

 

2,000,000

Net cash provided (used in) by financing activities

 

479,781

 

 

2,000,000

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(282,637)

 

 

27,109

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning balance

 

585,339

 

 

79,890

Cash and cash equivalents, ending balance

$

302,702

 

$

106,999

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

$

1,022,676

 

$

1,248,393

Notes issued in relation to Service 800 acquisition

$

-

 

$

2,000,000

Purchase Price holdback note on Service 800 acquisition

$

-

 

$

210,000

Purchase price allocation note on Service 800 acquisition

$

-

 

$

1,233,828

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


8


Table Of Contents


 

BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ DEFICIT

(Unaudited)

 

 

Preferred Stock

Common Stock

Additional

Accumulated

Stockholders'

 

Par Value

Shares

Shares

Par Value

Paid in Capital

Deficit

Equity

Balance, December 31, 2018

$ 1,017,450   

$ 250,000,000   

1,017,450,000   

$ 250,000   

$ 27,599,349   

$ (42,762,860)  

$ (13,895,881)  

Extinguishment of derivative liabilities on conversion

-   

-   

-   

-   

3,872,545   

-   

3,872,545   

Warrants issued with debt

-   

-   

-   

-   

696,850   

-   

696,850   

Common stock issued for debt conversion

62,472   

-   

62,472,003   

-   

998,014   

-   

1,060,486   

Common stock issued for interest conversion

5,508   

-   

5,507,873   

-   

90,399   

-   

95,907   

      Net loss

 

 

 

 

 

(3,754,002)  

(3,754,002)  

Balance, March 31, 2019

$ 1,085,430   

-   

1,085,429,876   

$ 250,000   

$ 33,257,157   

$ (46,516,682)  

$ (11,924,095)  

 

   

Common stock issued for debt conversion

64,842   

-

64,482,327   

-   

12,538   

-   

77,020   

Common stock issued for interest

12,536   

-

12,537,673   

-   

2,442   

-   

14,980   

Stock issued for acquisition

70,000   

-

70,000,000   

-   

357,000   

-   

427,000   

Stock Issued for services

10,825   

-

10,825,000   

-   

293,100   

-   

303,925   

Extinguishment of derivative liabilities on conversion

-   

-   

-   

-   

464,501   

-   

464,501   

      Net loss

 

 

 

 

 

(5,168,008)  

(5,168,008)  

Balance, June 30, 2019

$1,243,274   

250,000,000   

1,243,274,876   

$ 250,000   

$ 34,386,738   

$ (51,684,690)  

$ (15,804,677)  

 


9


Table Of Contents


 

 

Series A&B Preferred Stock

 

                   Commonn Stock

Non-Controlling

 

Additional

Accumulated

Stockholders'

 

 

Shares

Par Value

Shares

Par Value

 Interest

 

Paid in Capital

Deficit

Deficit

Balance, December 31, 2019

249,999,920 

 $ 250,000

 1,495,004,678

 $ 1,495,004

 $ 131,250 

 $ -

 $ 43,347,152

 $ (48,227,200)

 $ (3,003,794)

Common stock issued for debt conversion

 

 -

  -

132,910,000

 132,910

 

 

  -

  

  132,910 

Extinguishment of derivative liabilities on conversion

 -

  -

 -

  -

 

 

  132,005

  

  132,005 

Net loss

 

 -

  -

 -

  -

  (20,200)

 

  -

  (424,584)

  (444,784)

Balance, March 31, 2020

 249,999,920

 $ 250,000

1,627,914,678

$ 1,627,914

 $ 111,050 

 

 $ 43,479,157

 $ (48,651,784)

 $ (3,183,663)

Common stock issued for debt conversion

 

 -

  -

889,766,383

 889,766

 

 

  -

  

  889,766 

Extinguishment of derivative liabilities on conversion

 -

  -

 -

  -

 

 

  1,101,419

  

  1,101,419 

Net loss

 

 -

  -

 -

  -

  (7,215)

 

  -

  (2,136,009)

  (2,143,224)

Balance, June 30, 2020

 249,999,250

 $ 250,000

 2,517,681,061

 $ 2,517,680

 $ 103,835 

 

 $ 44,580,576

 $ (50,787,793)

 $ (3,335,702)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 


10


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

 

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 condensed consolidated financial statements and the notes thereto for the periods ended June 30, 2020 and 2019 included herein include the accounts of the Company, its wholly-owned subsidiaries Service 800 Inc., Path UX and IDriveYourCar (which have been discontinued) and Customer Centered Strategies, LLC, which the Company has an 80% investment interest. These financial statements have been prepared by management and are unaudited.

 

 

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).  These condensed consolidated financial statements should be read in conjunction with the financial statements and the notes thereto for the fiscal year ended December 31, 2019.

 


11


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

NOTE 2. SELECTED ACCOUNTING POLICIES

 

Interim Financial Statements

 

These unaudited condensed consolidated financial statements as of and for the six (6) months ended June 30, 2020 and 2019, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America.

 

These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2019 and 2018, respectively, which are included in the Company’s December 31, 2019 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on April 14 , 2020. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the six (6) months ended June 30, 2020 are not necessarily indicative of results for the entire year ending December 31, 2020.

  

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, 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 six months or less at the time of purchase. The Company’s cash management system is currently integrated within several banking institution. 

 

 Fair Value of Financial Instruments


12


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

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.

 

 

 

June 30, 2020 Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair
Value

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Liabilities

 

$

 

 

 

$

-   

 

 

$

424,748

 

 

$

424,748   

 

Total

 

$

 

 

 

$

-   

 

 

$

424,748   

 

 

$

424,748   

 

 

 

 

December 31, 2019 Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair
Value

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Liabilities

 

$

 

 

 

$

-   

 

 

$

1,433,403

 

 

$

1,433,403   

 

Total

 

$

 

 

 

$

-   

 

 

$

1,433,403   

 

 

$

1,433,403   

 

 

Derivative liability as of December 31, 2019

$1,433,403  

Change in derivative liability during the period

(1,008,655) 

Balance at June 30, 2020

$424,748  


13


Table Of Contents


 

 

 

 

BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

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.

 


14


Table Of Contents


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 six months ended June 30, 2020:

 

 

June 30, 2020

Derivative Liability

Expected term

4 months to 1 year

Exercise price

$ 0.00015-$0.001

Expected volatility

184%-236 %

Expected dividends

None

Risk-free rate

0.12% to 0.20 %

 

 


15


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

Reclassifications

 

We may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows.

 

  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.

   

 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. 


16


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

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 June 30, 2020 and 2019 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 and equity financing and generating revenue, including through the recent acquisition of Service 800 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 – DISCONTINUED OPERATIONS

 

PathUX, LLC

 

 On April 24, 2020 the Company entered into a Settlement and Release Agreement whereby, effective as of April 1, 2020, the purchase agreement between the former shareholders of PathUX and IDriveYourCar dated May 31, 2019 was effectively unwound, withall assets and liabilities returned to such former shareholders.

 

Furthermore, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Robert Bisson on June 4, 2019, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Christian Schine on June 4, 2019, and the 7,000,000 shares of Beyond Commerce’s restricted common stock issued to Ryan Rich  on June 4, 2019, were released from any further claims. As Beyond Commerce had not paid any additional funds to the previous owners of PathUX and the extension period had expired, the Company has forfeited the 70,000,000 shares valued at $427,000 which were reflected in the December 31, 2019 financial statements.

  


17


Table Of Contents


Income (loss) from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of the PathUX business which is presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019, are as follows:

 

 

 

Three months ended June 30,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Total net sales

 

$

-

 

 

$

71,043

 

Cost of sales

 

 

-

 

 

 

55,428

 

Operating, selling, general and administrative expenses

 

 

-

 

 

 

4,421

 

Amortization of software

 

 

-

 

 

 

-

 

Income (loss) from discontinued operations

 

 

-

 

 

 

11,194

 

Gain on sale of discontinued operations

 

 

-

 

 

 

-

 

Income tax provision

 

 

-

 

 

 

-

 

Discontinued operations, net of tax

 

 

-

 

 

 

11,194

 

 

 

 

 

Six months ended June 30,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Total net sales

 

$

219,867

 

 

$

71,043

 

Cost of sales

 

 

147,829

 

 

 

55,428

 

Operating, selling, general and administrative expenses

 

 

91,134

 

 

 

4,421

 

Amortization of software

 

 

134,686

 

 

 

-

 

Income (loss) from discontinued operations

 

 

(153,781)

 

 

 

11,194

 

Gain on sale of discontinued operations

 

 

504,482

 

 

 

-

 

Income tax provision

 

 

-

 

 

 

-

 

Discontinued operations, net of tax

 

 

350,700

 

 

 

11,194

 

 

The following table presents the amounts reported in the Consolidated Condensed Balance Sheets as held for sale related to the PathUX Assets as of December 31, 2019. As the sale was finalized shortly after close of the first quarter 2020, the current balance sheet no longer reflects these operations.

 

 

 

 

 

December 31,

 

 

 

 

 

2019

 

Current assets

 

 

 

 

 

Cash & cash equivalents

 

 

 

$

    95,470

 

Accounts receivable - net

 

 

 

 

    18,000

 

Total current assets

 

 

 

 

113,470

 

Proprietary Software, net

 

 

 

 

972,289

 

Intangible asset

 

 

 

 

1,722,796

 

Assets held for sale

 

 

 

$

2,808,555

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

$

159,255

 

Contingent acquisition liability - short term

 

 

 

 

1,951,205

 

Contingent acquisition liability - long term

 

 

 

 

1,048,795

 

Liabilities of assets held for sale

 

 

 

$

3,159,255

 


18


Table Of Contents


NOTE 5 - PROPERTY, SOFTWARE AND COMPUTER EQUIPMENT

 

Property and equipment at June 30, 2020 and December 31, 2019 consisted of the following:

 

 

 

June 30,

2020

 

 

December 31,

2019

Office and computer equipment

$

25,003

 

$

22,214

Furniture and fixtures

 

17,888

 

 

4,448

Software

 

20,822

 

 

20,822

Total property, software and computer equipment

 

63,713

 

 

47,484

Less: accumulated depreciation

 

(16,790)

 

 

(10,016)

 

$

46,923

 

$

37,468

 

Depreciation expense for the three and six month periods ended June 30, 2020 was $3,769 and $6,774, respectively compared to $ 9,014 and $10,016 for the same periods in 2019, respectively.

 

NOTE 6 – INTANGIBLE ASSETS

 

Intangible net assets of the Company at June 30, 2020 and December 31, 2019 are summarized as follows:

 

 

 

     June 30,             December 31,

 

 

2020

 

 

2019

Tradename-Trademarks

 

$

474,327

 

 

$

501,692

Assembled Workforce

 

 

351,473

 

 

 

371,751

IP/Technology

 

 

129,067

 

 

 

146,667

Customer Base

 

 

1,368,527

 

 

 

1,449,205

Non-Competition agreements

 

 

75,367

 

 

 

131,892

Customer Relationships - CCS

 

 

499,570

 

 

 

535,876

Total intangible assets

 

$

2,898,331

 

 

$

3,137,083

 

Amortization expense for the three and six month periods ended June 30, 2020 was $120,436 and $240,872, respectively compared to $103,371 and $137,987 for the same periods in 2019, respectively.

 

NOTE 7.  OTHER CURRENT LIABILITIES

 

Other current liabilities consist of the following:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Accrued interest - notes

 

$

409,344

 

 

$

149,873

 

Total other current liabilities

 

$

409,344

 

 

$

149,873

 

 


19


Table Of Contents


NOTE 8.  SHORT- AND LONG-TERM BORROWINGS

 

 Short-term and Long-term borrowings, consist of the following:

 

June 30,

 

 

December 31,

 

 Short term debt;

 

2020

 

 

2019

 

Convertible Promissory Notes, bearing an annual interest rate of 15% secured, due 02/14/2019

 

 

10,000

 

 

 

50,000

 

Convertible Promissory Notes, bearing an annual interest rate of 12% secured, due 08/27/2019

 

 

149,247

 

 

 

199,181

 

Short-Term Note – Jean Mork Bredeson cash deficit holdback, 15%, past due

 

 

210,000

 

 

 

210,000

 

Short-Term Note – Jean Mork Bredeson purchase allocation, 15%, past due

 

 

1,401,695

 

 

 

1,381,914

 

Funding from the Payroll Protection Program, annual interest of 1%, due 04/24/2022

 

 

500,000

 

 

 

-

 

Convertible Promissory Notes, bearing an annual interest rate of 8% secured, due 08/07/2020

 

 

1,054,420

 

 

 

1,467,869

 

Total short-term debt

 

 

3,325,362

 

 

 

3,308,964

 

 

 

 

 

 

 

 

 

 

Long term debt;

 

 

 

 

 

 

 

 

Convertible Promissory Notes, bearing an annual interest rate of 5.0%, due 12/31/22

 

 

350,000

 

 

 

350,000

 

Promissory Note – Jean Mork Bredeson, interest rate 5.5%, due 2/28/2022

 

 

2,100,000

 

 

 

2,100,000

 

Senior Secured Redeemable Debenture, bearing an annual interest rate of 16%, due 12/31/2021

 

 

900,000

 

 

 

900,000

 

Total short-term and long-term borrowings, before debt discount

 

 

6,675,362

 

 

 

6,658,964

 

Less debt discount

 

 

(249,204)

 

 

 

(824,417)

 

Total short-term and long-term borrowings, net

 

$

6,426,158

 

 

$

5,834,547

 

 

Short-term and Long-term borrowings, consist of the following:

 

 

 

 

 

 

 

 

Short-term borrowings – net of discount

 

 

$

3,253,249

 

 

2,714,762

 

Long-term borrowings – net of discount 

 

 

 

3,172,909

 

 

3,119,785

 

Total Short-Term and long term borrowings – net of discount

 

 

$

6,426,158

 

 

5,834,547

 


20


Table Of Contents


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 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 fiscal year 2019, Discover Growth Fund LLC issued the additional $2,000,000 to the Company and converted $1,249,522 of the aggregate debt. During the six months ended June 30, 2020, Discover Growth Fund LLC converted $413,449 of their outstanding debt.

  

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 $40,000 of the outstanding debt, leaving a remaining principal balance due of $10,000. 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. Additionally , If the stock price falls below par value , additional shares will be issued at the lower conversion rate so that stocks continue to be issued at par value. 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

 

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 Chief Executive Officer.

 

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 to be withheld 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 $1,401,695 as of June 30, 2020. Although holdbacks did not initially include interest obligations, we agreed to begin accruing interest at 10% in June 2019, and then 15% in October 2019 if we past an agreed repayment date.  

 

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


21


Table Of Contents


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 of $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.

 

On April 24, 2020 the Company through its Service 800 Inc subsidiary, received $500,000 in funding in conjunction with a promissory note under the Payroll Protection Program is made pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). After sixty (60) days from the date the Loan is funded, but not more than twenty-four (24) weeks from the date the Loan is funded, Borrower shall apply to Bank for loan forgiveness. If the SBA confirms full and complete forgiveness of the unpaid balance of the Loan, and reimburses Bank for the total outstanding balance, principal and interest, Borrower’s obligations under the Loan will be deemed fully satisfied and paid in full. If the SBA does not confirm forgiveness of the Loan, or only partly confirms forgiveness of the Loan, or Borrower fails to apply for loan forgiveness, Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the Loan, including principal and interest, and in such case, Bank will establish the terms for repayment of the Loan Balance in a separate documentation to be provided to Borrower, which letter will set forth the Loan Balance, the amount of each monthly payment, the interest rate (not in excess of a fixed rate of one per cent (1.00% per annum), the term of the Loan, and the maturity date of two (2) years from the funding date of the Loan. No principal or interest payments will be due prior to the end of the Deferment Period. Because we anticipate the note being forgiven within the next year it is classified as short term


22


Table Of Contents


NOTE 9.  COMMON STOCK, WARRANTS AND PAID IN CAPITAL

 

Common Stock

 

As of June 30, 2020, our authorized capital stock consisted of 3,000,000,000 shares of common stock, par value $0.001 per share after filing an amendment to our Articles of Incorporation on March 27, 2020. As of June 30, 2020, there were 2,517,681,061 issued and outstanding shares of common stock.

 

 

During the six months ended June 30, 2020 the Company issued 1,022,676,383 shares valued at $1,022,676 for the conversion of certain debt and accrued interest into shares of our stock.

 

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.

 

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 June 30, 2020, and December 31, 2019, there were 249,999,900 and 249,999,900 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 on October 2, 2019, 20 shares of the Series B Preferred to Geordan Pursglove. An additional 13 shares of Series B Preferred was issued to Geordan Pursglove on August 4, 2020. The remaining 18 shares of Series B Preferred are authorized but unused. There are 49 shares of authorized but undesignated preferred stock. The value of the October 2, 2019 transaction is $293,000 based on an independent valuation of the transaction.

 


23


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

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 June 30, 2020, these warrants have vested.

 

 

 NOTE 10. 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 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. In February of 2020 the Company moved its Service 800, Inc. subsidiary 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 in February 2021, requires base monthly rents of $4,160, plus operating expenses.

 


24


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

NOTE 11.  RELATED PARTIES

 

As of June 30, 2020, 206,249,900 shares of BCI’s Series A Convertible 12% Cumulative Preferred stock are held by 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. 

 

During the fourth quarter 2019 the Company canceled 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. On October 2, 2019, the Board issued 20 shares of the Series B Preferred to Geordan Pursglove. An additional 13 shares of Series B Preferred was issued to Geordan Pursglove on August 4, 2020. The remaining 18 shares of Series B Preferred are authorized but unused. There are 49 shares of authorized but undesignated preferred stock. The value of the 2019 transaction is $293,000 based on an independent valuation of the transaction.

 

On May 8, 2019, the Company issued a short-term convertible note payable to a board member 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.


25


Table Of Contents


NOTE 12.  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.

 

Convertible debt that is convertible into 2,998,335,175 and 1,864,741,994 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 six months ended June 30, 2020 and 2019, respectively. These shares are not included as they would be antidilutive. Additionally, there are 16,666,667 and 16,666,667 warrants that are exercisable into shares of stock as of June 30, 2020 and 2019, and there is an outstanding issue with Iliad, a former noteholder that claims warrants as being issued and outstanding that could result in 154,150,198 and 16,723,842 shares being issued as of June 30, 2020 and 2019. The Company is currently in negotiations over the issue. As warrants are exercisable above the current market rate, they would be excluded from any dilutive share calculations.  

 

The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the three and six-month period ended June 30, 2020 and 2019:

 

 

 

Six-month period ended June 30,

 

 

Three-month period ended June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

Loss from continuing operations

$

                (2,938,708)

 

$

                (8,933,204)

 

$

                (2,938,708)

 

$

                (2,938,708)

Income from discontinued operations

 

                    350,700

 

 

                      11,194

 

 

-

 

 

                      11,914

Consolidated net loss

$

                (2,588,008)

 

$

                (8,922,010)

 

$

                (2,136,009)

 

$

                (5,168,008)

Weighted average shares used for diluted earnings per share

 

          1,725,314,701

 

 

          1,092,248,763

 

 

          1,906,073,735

 

 

          1,140,710,865

Incremental Diluted Shares

 

-*

 

 

-*

 

 

-*

 

 

-*

Weighted Average shares used for diluted earnings per share

 

          1,725,314,701

 

 

          1,092,248,763

 

 

          1,906,073,735

 

 

          1,140,710,865

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted: continuing operations

$

(0.00)

 

$

                         (0.01)

 

$

(0.00)

 

$

                         (0.01)

Basic and Diluted: discontinued operations

$

0.00

 

$

                         0.00

 

 

-

 

$

0.00

Total Basic and Diluted

$

(0.00)

 

$

                         (0.01)

 

$

(0.00)

 

$

                         (0.01)

 

 

*The shares associated with convertible debt, preferred stock, stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e., reduce the net loss per common share).   


26


Table Of Contents


BEYOND COMMERCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

 

NOTE 13. 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 the estate of George Pursglove whose executor is 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 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:

 

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

 


27


Table Of Contents


PathUX, LLC

 

On April 24, 2020 the Company entered into a Settlement and Release Agreement whereby, effective as of April 1, 2020, the purchase agreement between the former shareholders of PathUX and IDriveYourCar dated May 31, 2019 was effectively unwound, with all assets and liabilities returned to such former shareholders.

 

Furthermore, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Robert Bisson on June 4, 2019, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Christian Schine on June 4, 2019, and the 7,000,000 shares of Beyond Commerce’s restricted common stock issued to Ryan Rich  on June 4, 2019, were released from any further claims. As Beyond Commerce had not paid any additional funds to the previous owners of PathUX and the extension period had expired, the Company has forfeited the 70,000,000 shares valued at $427,000 which were reflected in the December 31, 2019 financial statements.

 

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   

 


28


Table Of Contents


The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Service 800, Inc. and Customer Centered Strategies occurred on January 1, 2019:

 

 

 

Six Months ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

Net Revenues

 

$

2,029,599

 

 

 

$     2,519,869

 

Net (loss) income from operations

 

 

(2,560,593)

 

 

 

(8,928,913)

 

Net (loss) income per share from operations

 

 

(0.00)

 

 

 

(0.01)

 

Weighted average number of shares – basic and diluted

 

 

 

 

 

 

 

1,092,248,763

 

 

NOTE 14.  SUBSEQUENT EVENTS

 

Issuance of Additional Shares

 

In July 2020, 4,700,000 shares were issued to Auctus for conversion of principal and interest of $470,000.

 

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. 

 

Majority of the states within the United States have issued a stay at home order to its residents. 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 the restrictions. 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 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 regarding 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 Service 800 was approved for $500,000 from the Paycheck Protection funds to assist in maintaining our employee base.


29


Table Of Contents


 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof.  When used in the Filings, the words “may”, “will”, “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management are intended to identify forward-looking statements.  Such statements reflect the current view of the Company with respect to future events and we caution you that these statements are not guarantees of future performance or events and are subject to risks, assumptions, and other factors.  

 

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.

 

 


30


Table Of Contents


RESULTS OF OPERATIONS FOR THE THREE- AND SIX-MONTH PERIODS

 

Through our Service 800 Inc subsidiary many of our clients; GE Healthcare, Audiology System, Inc 3M Healthcare, Johnson & Johnson Vision Care, Albany Molecular Research Inc., Sakura Finetek, Abbott Diagnostics, Biosense Webster, a Johnson & Johnson Company and Medtronic to name a few took the time during pandemic to begin strategic planning with Service 800 to grow their business with the company by renewals, expansion, and better ways to grow our programs with each and every one of them for the future. This select market segment continues to be a major source of revenue for the Company as we expand our services within this business segment. Renewals have been strong during the last three months and we anticipate revenue getting back in line with exceeding our expectations as we progress further into the year. All renewals that have taken place are on a minimum of a one to two-year term with an auto renewal taking place when the contract expires.  During the pandemic, it made our customers realize the value that Service 800 brings to the clients in the form of providing valuable information to not only help their growth within their own companies, it also helps them be better providers to their customers as well. We continue to look forward to growth into each division of these companies and expansion to exceed expectations that have been set. We value these customers and are looking for all of the positive growth we have set for the remainder of the year and moving onwards to future years to come. 

 

Three months ended June 30, 2020 and June 30, 2019.

 

 Revenue 

 

Revenue generated for the three months ended June 30, 2020 was $782,009 as we began reporting revenue being created from both the Service 800 acquisition and Customer Centered Strategies which were include for the entire quarter, however, our customer based growth was paused momentarily in response to the Covid-19 situation. This compares to compared to $1,213,928 revenue from the comparable three-month period in 2019.

 

Operating Expenses

 

 For three months end June 30, 2020, operating expenses were $1,521,979 and for the three months ended June 30,2019, operating expenses were $1,857,487. This significant decrease is mainly attributable to cost reduced in reaction to the Covid-19 issues, reduction in office rent and related expenses as many of our employees preferred to work from home and the reduction of certain officers’ salaries. There was a $95,013 decrease in cost of goods sold compared to $343,030 in the comparable period attributable to the decrease in revenue. Payroll decreased to $588,057 from $665,647 during the three months ended June 30, 2020 and 2019, respectively, due to the Service 800 employee right sizing, and general and administrative costs increased to $348,117 from $324,643 due to the Service expenses related to our office relation in Minnesota.

 

Non-operating income (expense)

 

The Company reported non-operating expense of $1,403,254 during the three months ended June 30, 2020, as compared to a loss of $4,535,643 during the three months ended June 30, 2019, attributable to the changes in the derivative liability and debt fees associated with our convertible notes.

 

Net Income (loss)

 

For three months end June 30, 2020, the Company incurred a net loss of $2,136,009 as compared to a net loss of $5,168,008 for three months end June 30 2019, which was primarily due to derivative-related income from the changes in liability and debt fees associated with our convertible notes.

  


31


Table Of Contents


Six months ended June 30, 2020 and June 30, 2019.

 

Revenue

 

Revenue generated for the six months ended June 30, 2020 was $2,029,599 as we began reporting revenue being created from both the Service 800 and Customer Centered Strategies acquisition which was closed in 2019 for the full six months, compared to $1,677,842 revenue from the comparable six month period in 2019.

 

Operating Expenses

 

For six months end June 30, 2020, operating expenses were $3,291,142 and for the six months ended June 30, 2019, operating expenses were $2,550,187. This significant increase is mainly attributable to the Service 800 and Customer Centered Strategies acquisitions and the related costs associated with these operations. There was a $215,353 increase in cost of goods sold compared to $455,084 in the comparable period. Payroll increased $314,798 from $942,368 to $1,257,166 during the six months ended June 30, 2020 and 2019, respectively, due to the Service 800 and PathUX employee addition, and general and administrative costs increased $108,332 once again due to the Service 800 and Customer Centered Strategies additions. The decrease in professional fees as the Company reduced these types of expenditures by $33,759 due to less utilization.

 

Non-operating income (expense)

 

The Company reported non-operating expense of $1,677,165 during the six months ended June 30, 2020, a decrease of $6,383,694 compared to $8,060,859 during the six months ended June 30, 2019, mainly attributable to the changes in the derivative liability and debt fees associated with our convertible notes, along with an increase in interest expense of $498,173 due to the increase in debt level.

 

Net Income (loss)

 

For six months end June 30, 2020, the Company incurred a net loss of $2,560,593 as compared to a net loss of $8,922,010 for six months end June 30, 2019, which was primarily due to a loss on derivative related income from the changes in liability and debt fees associated with our convertible notes. As of June 30, 2020, the Company had an accumulated deficit of $50,787,793 and as of December 31, 2019, the Company had an accumulated deficit of $48,227,200.

 

Purchase of Significant Equipment

 

We do not anticipate the purchase or sale of any plant or significant equipment during the next twelve (12) months.

 

Going Concern

 

There is substantial doubt about our ability to continue as a going concern.

 

As of June 30, 2020, we had an accumulated deficit of $50,787,793.  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, that 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. 

 


32


Table Of Contents


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.

 

We had total current assets of $1,513,807 and $2,070,851 as of June 30, 2020 and December 31, 2019, respectively.  Current assets would consist primarily of cash, accounts receivable and current assets held for sale of $0 and $113,470 as of June 30, 2020 and December 31, 2019, respectively. The Company had a $50,787, 793 accumulated deficit on its balance sheet as of June 30, 2020.

 

We had total current liabilities of $5,920,998 and $8,074,845 as of June 30, 2020 and December 31, 2019, respectively.  Current liabilities consisted primarily of the derivative liability, accounts payable, accrued payroll and payroll taxes, contingent acquisition liabilities, related party debt, convertible debt and interest, and the accrued interest, and current liabilities associated with the sale of PathUX of $0 and $2,109,850, respectively as of June 30, 2020 and December 31, 2019. The increase in our current liabilities is attributable to accrued interest, salary accruals and short-term debt incurred as part of the Service 800 and Customer Centered Strategies.

 

We had a working capital deficit of $4,407,191 and $6,003,994 as of June 30, 2020 and December 31, 2019, respectively.  The decrease of $1,596,803 for the period as of June 30, 2020 compared to December 31, 2019 was due to an increase in short term borrowings and disposal of discontinued operations.

 

Cash Flow from Operating Activities

 

For the six months ended June 30, 2020 and 2019, cash used in operating activities was $746,188 and cash provided by operations of $41,144 respectively. This decrease is attributable to the Service 800 and Customer Centered Strategies acquisitions.

  

Cash Flow from Investing Activities

 

For the six months ended June 30, 2020 and 2019, cash provided used in investing activities was $16,230 and $2,014,035 respectively, which represents cash used in the Service 800 and Customer Centered Strategies acquisition transactions.

 

Cash Flow from Financing Activities

 

For the six months ended June 30, 2020 and 2019, cash provided by financing activities was $479,781 and $2,000,000, respectively, which represents cash from the Discover Growth Fund LLC.

 

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.

 


33


Table Of Contents


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.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, we evaluate past judgments and our estimates, including those related to allowance for doubtful, allowance for inventory write-downs and write offs, deferred income taxes, provision for contractual obligations and our ability to continue as a going concern. We base our estimates on historical experience and on various other assumptions that we believe 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 apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Note 2 to the consolidated financial statements, presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. There were no significant changes in our critical accounting estimates during the six months ended June 30, 2020.

 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

We do not hold any derivative instruments and do not engage in any hedging activities. 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures.

 

We carried out an evaluation, under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2020. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.

 


34


Table Of Contents


As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.

 

Changes in internal controls over financial reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

Limitations on the Effectiveness of Controls

 

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its Principal Executive Officer and its Principal Financial Officer, do not expect that the Company’s disclosure controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

  


35


Table Of Contents


 

PART II – OTHER INFORMATION

ITEM 1. 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. Answers and Affirmative and Additional Defenses to Third Party Claims were filed by Mr. Bredeson on April 7, 2020 and by Mr. Schwedinger on April 9, 2020 and, on April 24, 2020, Ms. Bredeson filed a Motion to Dismiss. The Company is preparing its responses to such filings.  

 

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. 

ITEM 1A. RISK FACTORS.

 

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on April 15, 2020.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

Other than described below, there were no unregistered sales of equity securities that were not otherwise disclosed in a current report on Form 8-K.

 

On April 14, 2020, the Company issued 30,720,000 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.

 

On May 6, 2020, the Company issued 30,000,000 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.

 

On May 6, 2020, the Company issued 31,280,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On May 12,2020, the Company issued 32,930,000 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.

 

On May 13, 2020, the Company issued 30,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On May 19,2020, the Company issued 65,550,000 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.


36


Table Of Contents


On May 20, 2020, the Company issued 60,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On May 29,2020, the Company issued 70,116,383 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.

 

On June 2, 2020, the Company issued 90,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On June 8, 2020, the Company issued 72,670,000 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.

 

On June 10, 2020, the Company issued 100,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On June 15, 2020, the Company issued 76,500,000 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.

 

On June 17, 2020, the Company issued 100,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On June 25, 2020, the Company issued 100,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On July 6, 2020, the Company issued 100,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On July 9, 2020, the Company issued 130,622,200 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On July 15, 2020, the Company issued 137,140,300 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

On July 22, 2020, the Company issued 102,237,500 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.

 

Except where noted, all the securities discussed in this Part II, Item 2 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 


37


Table Of Contents


ITEM 5. OTHER INFORMATION.

 

There is no other information required to be disclosed under this item which was not previously disclosed. 


38


Table Of Contents


 

ITEM 6. EXHIBITS.

  

Exhibit Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.1

 

Rule 13a-14(a) Certification of Principal Executive Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

31.2

 

Rule 13a-14(a) Certification of Principal Financial Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

32.1*

 

Section 1350 Certification of Principal Executive Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

32.2*

 

Section 1350 Certification of Principal Financial Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.INS

 

XBRL Instance.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.XSD

 

XBRL Schema.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.PRE

 

XBRL Presentation.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.CAL

 

XBRL Calculation.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.DEF

 

XBRL Definition.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.LAB

 

XBRL Label.

 

 

 

 

 

 

 

X

 

* In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not deemed filed for purposes of Section 18 of the Exchange Act.


39


Table Of Contents


 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Beyond Commerce, Inc.

 

 

 

Dated: August 13, 2020

By:

/s/ Geordan Pursglove

 

 

Geordan Pursglove,
Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)

 

 


40

 

Beyond Commerce (PK) (USOTC:BYOC)
Historical Stock Chart
From Jan 2020 to Jan 2021 Click Here for more Beyond Commerce (PK) Charts.