NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization,
Nature of Business and Trade Name
A
summary of significant accounting policies of Bigfoot Project Investments, Inc. (the “Company”), a company organized
in the state of Nevada, is presented to assist in understanding the Company’s financial statements. The accounting policies
presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been
consistently applied in the preparation of the companying financial statements. These financial statements and notes are representations
of the Company’s management who are responsible for their integrity and objectivity.
The
Company was incorporated in the State of Nevada on November 30, 2011. The Company’s administrative office is located at
570 El Camino Real NR-150, Redwood City, CA and its fiscal year ends July 31. Since inception, the Company has been engaged in
organizational efforts and obtaining initial financing. The Company was established as an entertainment investment company.
The
Company’s mission is to create exciting and interesting proprietary investment projects, entertainment properties surrounding
the mythology, research, and potential capture of the creature known as Bigfoot. The Company will perform research in determining
the existences of an elusive creature commonly known as Bigfoot. For the past six years the research team, that has joined the
company, has performed research on expeditions throughout the United States and Canada.
The
Company’s competitive advantage is the in-house developed knowledge base and the advanced level of maturity of their projects
developed and currently owned by our current officers and shareholders. The Company will capitalize on the current stock pile
of these projects through contract agreements which will allow the Company to continue creation of media properties and the establishment
of physical locations, partnerships, and strategic alliances with organizations to augment investment markets to create revenue
as a stand-alone enterprise.
Basis
of Presentation
The
accompanying unaudited interim financial statements have been prepared on the same basis as the annual audited financial statements
and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial
information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial
statements. In the opinion of management such unaudited information includes all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of this interim information. Operating results and cash flows for interim periods
are not necessarily indicative of the results that can be expected for the entire year. The information included in this report
should be read in conjunction with our audited financial statements and notes thereto included in our 10-K for the year ended
July 31, 2017 filed with the SEC on November 15, 2017.
Accounts
receivable
The
Company routinely assesses the recoverability of receivables to determine their collectability by considering factors such as
historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect
a customer’s ability to pay. The Company determines its allowance for doubtful accounts by considering such factors as the
length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its
obligations to the Company and the condition of the general economy and the industry as a whole.
The Company has evaluated its accounts receivable history and determined that an allowance for doubtful accounts
of $75,500 is required for the nine months ended April 30, 2018.
Fair
value of financial instruments
The
carrying value of cash, accounts receivable, accounts payable and accrued expenses, and debt approximate their fair values because
of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit
risks arising from these financial instruments.
Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in
the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on
the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use
of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are
considered observable and the last unobservable.
|
●
|
Level
1 -
|
Quoted
prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions
in active exchange markets involving identical assets.
|
|
●
|
Level
2 -
|
Quoted
prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities
that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable
in active markets. These are typically obtained from readily-available pricing sources for comparable instruments.
|
|
●
|
Level
3 -
|
Unobservable
inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s
own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best
information available in the circumstances.
|
The
following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded
at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of
July 31, 2017:
|
|
Amount
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
Embedded
conversion
derivative liability
|
|
$
|
262,722
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
262,722
|
|
Total
|
|
$
|
262,722
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
262,722
|
|
The
following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded
at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of
April 30, 2018:
|
|
Amount
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
Embedded
conversion
derivative liability
|
|
$
|
156,246
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
156,246
|
|
Total
|
|
$
|
156,246
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
156,246
|
|
The
following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial
instruments, measured at fair value on a recurring basis using significant unobservable inputs:
Balance
at July 31, 2017
|
|
$
|
262,722
|
|
Fair
value of derivative liability at issuance charged to debt discount
|
|
|
55,614
|
|
Reclass
to equity due to conversion
|
|
|
(202,901
|
)
|
Unrealized
derivative loss included in other expense
|
|
|
40,811
|
|
Balance
at April 30, 2018
|
|
$
|
156,246
|
|
The
Company evaluated its convertible notes to determine if the embedded component of those contracts qualify as derivatives to be
separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The Company determined that due to the variable
number of common stock that the notes convert to, the embedded conversion option were required to be bifurcated and accounted
for as a derivative liability. The fair value of the derivative liability is calculated at the time of issuance and the Company
records a derivative liability for the calculated value. Changes in the fair value of the derivative liability are recorded in
other income (expense) in the statements of operations. Upon conversion of a derivative instrument, the instrument is marked to
fair value at the conversion date and then that fair value is reclassified to equity.
The
Company’s derivative instruments were valued using the Lattice model which was based on a probability weighted discounted
cash flow model. Assumptions used in the valuation include the following: a) underlying stock price ranging from $0.0026 to $0.0002;
b) projected discount on the conversion price ranging from 35% to 62% with the notes effectively converting at discounts in the
range of 49.5% to 72.45%; c) projected volatility of 293% to 663%; d) probabilities related to default and redemption of the notes
during the term of the notes.
The
Company has considered the provisions of ASC 480,
Distinguishing Liabilities from Equity
, as the conversion feature embedded
in each debenture could result in the note principal being converted to a variable number of the Company’s common shares.
Both
notes are currently in default and the Company is researching options to satisfy the notes.
Basic
and Diluted Earnings per Share
Basic
earnings per share are based on the weighted-average number of shares of common stock outstanding.
The
FASB ASC Topic 260, “Earnings per Share”, requires the Company to include additional shares in the computation of
earnings per share, assuming dilution.
Diluted
earnings per share are based on the assumption that all dilutive options were converted or exercised. Dilution is computed by
applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if
funds obtained thereby were used to purchase common stock at the average market price during the period. The Company does not
have diluted effects on common stock as there was no warrant or option issued.
Basic
and diluted earnings per share are the same as there was no dilutive effect of outstanding stock options for the three and nine
months ended April 30, 2018 and April 30, 2017.
The
following is a reconciliation of basic and diluted earnings per share for the three and nine months ended April 30, 2018 and 2017:
|
|
Three
Months Ended
|
|
|
Three
Months Ended
|
|
|
Nine
Months
Ended
|
|
|
Nine
Months
Ended
|
|
|
|
April
30, 2018
|
|
|
April
30, 2017
|
|
|
April
30, 2018
|
|
|
April
30, 2017
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) available to common shareholders
|
|
$
|
(124,108
|
)
|
|
$
|
(98,131
|
)
|
|
$
|
(5,673,592
|
)
|
|
$
|
(1,141,930
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares – basic and diluted
|
|
|
612,063,461
|
|
|
|
217,317,000
|
|
|
|
397,384,200
|
|
|
|
213,940,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) per share – basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
(0.01
|
)
|
|
|
(0.00
|
)
|
NOTE
2 - GOING CONCERN
The
Company’s financial statements are prepared using accounting principles generally accepted in the United States of American
applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course
of business. However, the Company does not have significant cash or other current assets, nor does it have an established source
of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These conditions raise substantial
doubt about our ability to continue as a going concern.
Under
the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither
the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations.
Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge
its liabilities in the normal course of business.
The
ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described
in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any
adjustments that may be necessary if the Company is unable to continue as a going concern.
Historically,
the Company has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operation
and growth. Management may raise additional capital by future public or private offerings of the Company’s stock or through
loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s
failure to do so could have a material and adverse effect upon it and its shareholders.
NOTE
3 – ADVANCE FROM SHAREHOLDERS
In
the nine months ended April 30, 2018, additional advances from shareholders were received in the amount of $174,376. The
Company made payments on these advances amounting to $138,727. These advances bear no interest and are due on demand. The
total advances from shareholders as of July 31, 2017 were $60,322 and as of April 30, 2018 were $95,971.
NOTE
4 – NOTE PAYABLE – RELATED PARTY
In
January 2013, Bigfoot Project Investments, Inc. executed a promissory note in the amount of $484,029 as part of the asset transfer
agreement for the transfer of all assets held by Searching for Bigfoot, Inc. In August 2013, the Company increased the balance
of the promissory note by $489 to add an asset that was not included in the original transfer the terms of the note are that the
unpaid principle and the accrued interest are payable in full on January 31, 2018. During the six months ended January 31, 2018,
the holder of the note has agreed to allow the note to be renewed for another year.
The
interest rate stated on the note is 4.0% (four percent). Monthly payments are not required in the note; however, the note does
contain a prepayment clause that allows for payments to be made prior to the due date with no detrimental effects. As of April
30, 2018, and July 31, 2017, the outstanding balance on the note was $472,370.
Interest
expense for the nine months ended April 30, 2018 and 2017 was $14,171 and $9,680.
NOTE
5 - CAPITAL STOCK
The
holders of the Company’s common stock are entitled to receive dividends out of assets or funds legally available for the
payment of dividends at such times and in such amounts as the board from time to time may determine. Holders of common stock are
entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of
the election of directors then standing for election. The common stock is not entitled to pre-emptive rights and is not subject
to conversion or redemption. Upon liquidation, dissolution or winding up of the company, the assets legally available for distribution
to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any,
on any outstanding payment of other claims of creditors.
On
November 28, 2017 the Board discussed and agreed to increase the authorized shares from 400,000,000 to 500,000,000 for the purpose
of securing additional resources for anticipated operations. On November 29, 2017 an amendment to the Articles of Incorporation
was filed with the Nevada Secretary of State to increase the authorized shares.
On
January 12, 2018 the Board discussed and agreed to increase the authorized shares from 500,000,000 to 4,000,000,000. Common stock
authorized was changed to 3,500,000,000 and a class of Preferred stock was added with 500,000,000 shares authorized. This change
was implemented for the purpose of securing additional resources and establishing the Preferred stock for merger/acquisition negotiations.
The
Board authorized stock compensation for Directors of the Company in the August 28, 2017 Directors meeting. The stock was issued
on September 13, 2017. Total number of shares issued for director compensation was twenty million (20,000,000) shares to CEO,
Tom Biscardi, ten million (10,000,000) shares to President, Tommy Biscardi, ten million (10,000,000) shares to CFO, Sara Reynolds
and ten million (10,000,000) shares to Director, William Marlette for a total of fifty million shares (50,000,000). The Board
also authorized stock compensation for the Company’s legal representative The Krueger Group in the amount of ten million
shares (10,000,000). The Company recorded $5,220,000 stock-based compensation during the three months ended October 31, 2017.
On
December 27, 2017, the Board voted to rescind the stock compensation issued on September 13, 2017. Consequently, 47,850,000 shares
issued as stock compensation were cancelled and the corresponding par value of $47,850 was reclassed to additional paid in capital.
During
the nine months ended April 30, 2018, EMA Financial converted 167,595,950 shares of common stock for a reduction in the principal
amount due of $41,225. The note went into default as of January 19, 2018. Penalties in the amount of $45,232 were assessed upon
default of the note. Balance of the note as of April 30, 2018 was $64,057.
During
the nine months ended April 30, 2018, Auctus Fund converted 213,769,199 shares of common stock for a principal amount due of $51,357
and settlement of unpaid interest of $6,486 and penalty of $5,000. The note went into default November 18, 2017, Auctus Fund assessed
penalties totaling $20,000 for default and sub-penny penalties. Balance of the note as of April 30, 2018 was $26,143.
During
the nine months ended April 30, 2018, Power Up Lending converted 332,337,719 shares of common stock for a principal amount due
of $24,290. The principal balance on the note as of April 30, 2018 is $35,710.
The
Company has 949,249,868 and 223,397,000 shares of common stock issued and outstanding as of April 30, 2018 and July 31, 2017,
respectively.
NOTE
6 – DISTRIBUTION AGREEMENTS
The
Company entered into a Distribution Agreement on September 2, 2011 with the Bosko Group providing them a non-exclusive right to
market the sales of its DVD’s. The Distribution Agreement requires the Company to pay the Bosko Group ten percent (10%)
of the selling price of the DVD’s sold. This agreement remained in effect for a period of 4 years and has been automatically
renewed for an additional 4 years with no limit on the number of times the agreement may be automatically renewed, unless either
party gives notice to the other of its desire to terminate the Agreement at least sixty (60) days before expiration of the original
or renewal term.
In
May 2017, the Company entered into two separate agreements (the “Re-Release”) with The Bosko Group LLC (the “Distributor”)
to provide distribution and promotional services to the Company. The terms of the agreements provide for the following.
a.
Compensation to the Company for the Re-Release will be based on projected gross sales range and royalties for six existing DVD
documentaries which will be offered into all distribution markets as a series with a new introduction narrated by Tom Biscardi.
b.
Compensation to the Company for the Distribution of new feature-length films is based on past performance of previous productions
with up-front funding and projected royalties over all distribution channels. The Company completed production of the first of
the new feature-length films in July 2017 and recognized revenues of $81,000 during the year ended July 31, 2017.
NOTE
7 – CONVERTIBLE NOTES
On
January 19, 2017, the Company issued a convertible promissory note in the amount of $62,500 to EMA Financial, LLC, a Delaware
limited liability company. This convertible note is due and payable on January 19, 2018, has an interest rate of 10% and is convertible
to common stock of the Company at a conversion price equal to the lower of: (i) the closing sale price of the common stock on
the principal market on the trading immediately preceding the closing date of this note, and (ii) 50% of either the lowest sale
price for the common stock on the principal market during the twenty-five (25) consecutive trading days immediately preceding
the conversion Date or the closing bid price. The note may be prepaid at 135% - 145% of outstanding principal balance. The note
became convertible on May 23, 2017 and the variable conversion feature was accounted for as a derivative liability in accordance
with ASC 815. During the nine months ended April 30, 2018, EMA Financial converted 167,595,950 shares of common stock for a reduction
in the principal amount due of $41,225. The note went into default as of January 19, 2018. Penalties in the amount of $45,232
were assessed upon default of the note. Balance of the note as of April 30, 2018 was $64,057.
On
February 27, 2017, the Company issued a convertible promissory note in the amount of $62,500 to Auctus Fund LLC, a Delaware limited
liability company. This convertible note is due and payable on November 18, 2017 with interest of 10% per annum. This note is
convertible at the election of Auctus Fund, LLC after the 120 holding period has expired. In the event of default, the amount
of principal and interest not paid when due bear interest at the rate of 24% per annum and the note becomes immediately due and
payable. Should an event of default occur, the Company is liable to pay 150% of the then outstanding principal and interest. The
note agreement contains covenants requiring Auctus Fund’s written consent for certain activities not in existence or not
committed to by the Company on the issuance date of the note, as follows: dividend distributions in cash or shares, stock repurchases,
borrowings, sale of assets, certain advances and loans in excess of $100,000, and certain guarantees with respect to preservation
of existence of the Company and non-circumvention. This note became convertible on June 27, 2017 and the variable conversion feature
was accounted for as a derivative liability in accordance with ASC 815.
Outstanding
note principal and interest accrued thereon can be converted in whole, or in part, at any time by Auctus Fund, LLC after the issuance
date into an equivalent of the Company’s common stock at a conversion price equal to the lower of: (i) 50% multiplied by
the lowest trading price of the common stock during the previous twenty-five (25) trading day period prior to the date of the
note and (ii) 50% of the lowest trading price of the common stock during the twenty-five (25) trading day period prior to the
conversion date. The Company may prepay the amounts outstanding to Auctus Fund at any time up to the 120
th
day following
the issue date of this note by making a payment to the note holder of an amount in cash equal to 135% to 145%, multiplied by the
sum of: (w) the then outstanding principal amount of this note
plus
(x) accrued and unpaid interest on the unpaid principal
amount of this note
plus
(y) default interest, depending on the time of prepayment. This note became convertible on July
27, 2017 and the variable conversion feature was accounted for as a derivative liability in accordance with ASC 815. During the
nine months ended April 30, 2018, Auctus Fund converted 213,769,199 shares of common stock for a principal amount due of $51,357
and settlement of unpaid interest of $6,486 and penalty of $5,000. The note went into default November 18, 2017, Auctus Fund assessed
penalties totaling $20,000 for default and sub-penny penalties. Balance of the note as of April 30, 2018 was $26,143.
On
August 28, 2017, the Company issued a convertible promissory note in the amount of $60,000 to Power Up Lending Group LTD, a Virginia
corporation. This convertible note is due and payable on June 10, 2018, has an interest rate of 12% and is convertible to common
stock of the Company, beginning from 180 days following the date of the note, at a conversion price equal to 62% of the average
of the lowest trading price of the common stock during the fifteen (15) trading day period prior to the conversion date. The note
may be prepaid at any time up to 180
th
day following the issue date of the note for an amount equal to 115% - 140%
of outstanding balance plus unpaid interest. This note became convertible on February 24, 2018 and the variable conversion feature
was accounted for as a derivative liability in accordance with ASC 815.
During
the nine months ended April 30, 2018, Power Up Lending converted 332,337,719 shares of common stock for a principal amount due
of $24,290. The principal balance on the note as of April 30, 2018 is $35,710.
In
connection with the above notes, the Company paid deferred financing costs totaling to $20,000 that were recorded as a discount
to the notes. The Company also recognized a debt discount of $105,000 resulting from the embedded conversion option derivative
liability during the year ended April 30, 2017. During the nine months ended April 30, 2018, the Company recognized a debt discount
of $55,614 resulting from the embedded conversion option derivative liability. The debt discount is amortized over the term of
the note. During the nine months ended April 30, 2018 $151,876 was recorded as amortization of debt discount. Unamortized discount
as of April 30, 2018 amounted to $15,529.
NOTE
8 – ADVISORY AGREEMENTS
On
November 30, 2017, the Company entered into an Advisory Agreement with Veyo Partners LLC in which Veyo Partners is to provide
financial and other consulting services to the Company. Compensation for this agreement shall be a base fee in the form of common
stock equal to 8% of the outstanding fully diluted shares of the Company and a monthly fee of $10,000 per month which is deferred
until the advisors secure financing of no less than $300,000. No compensation amounts have been recognized from this agreement
due to the fact that the initial terms for compensation have not been met.
On
December 3, 2017, the Company signed a binding letter of intent (the “
Agreement
”) to purchase all of the equity
interests in East Glacier Park Enterprises LLC (“
East Glacier Park Enterprises
”). Under the Agreement, the
Company will acquire East Glacier Park Enterprises for a purchase price of six million ($6,000,000) dollars in the form of Convertible
Series A Preferred Stock.
On
February 9, 2018, the Company terminated the Agreement with East Glacier Park Enterprises.
NOTE
9 - SUBSEQUENT EVENTS
On
May 29, 2018, Auctus converted 54,479,100 shares of common stock for a principal amount of $1,776 and accrued interest of $403.
On various dates in May and June 2018, Power Up Lending Group converted 576,916,666 shares of common stock
for a principal amount of $34,615. As of June 22, 2018, the principal balance of this note is $1,095.