Item
1. Financial Statements.
VIVA ENTERTAINMENT GROUP INC.
|
Condensed Balance Sheets
|
|
|
|
July 31,
2017
|
|
October 31,
2016
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
40,615
|
|
|
$
|
385
|
|
Total Current Assets
|
|
|
40,615
|
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
Software, net of amortization of $12,303 and $7,131
|
|
|
56,250
|
|
|
|
61,422
|
|
Total Other Assets
|
|
|
56,250
|
|
|
|
61,422
|
|
Total Assets
|
|
$
|
96,865
|
|
|
$
|
61,807
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts Payable and Accrued Liabilities
|
|
$
|
263,549
|
|
|
$
|
189,024
|
|
Accrued Interest
|
|
|
71,743
|
|
|
|
43,426
|
|
Accrued Salary and Wages
|
|
|
384,936
|
|
|
|
148,242
|
|
Notes Payable
|
|
|
51,850
|
|
|
|
100,000
|
|
Related Party Payable
|
|
|
112,070
|
|
|
|
—
|
|
Convertible Notes Payable, net of discount
|
|
|
316,072
|
|
|
|
367,323
|
|
Derivative Liability
|
|
|
1,444,670
|
|
|
|
1,248,689
|
|
Total Current Liabilities
|
|
|
2,644,890
|
|
|
|
2,096,704
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock (6,900,000,000 shares authorized, par value 0.00001, 3,912,154,060 and 130,166,696 shares issued and outstanding at July 31, 2017 and October 31, 2016, respectively)
|
|
|
39,122
|
|
|
|
1,302
|
|
Stock issuable
|
|
|
3,079,200
|
|
|
|
512,400
|
|
Additional paid-in capital
|
|
|
14,461,362
|
|
|
|
2,204,879
|
|
Accumulated deficit
|
|
|
(20,127,709
|
)
|
|
|
(4,753,478
|
)
|
Total Stockholders’ Deficit
|
|
|
(2,548,025
|
)
|
|
|
(2,034,897
|
)
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
96,865
|
|
|
$
|
61,807
|
|
|
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of These Financial Statements
|
VIVA ENTERTAINMENT GROUP INC.
Condensed Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended July 31, 2017
|
|
For the Three Months Ended July 31, 2016
|
|
For the Nine Months Ended July 31, 2017
|
|
For the Nine Months Ended July 31, 2016
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
Total Revenues
|
|
|
3,000
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting services
|
|
|
3,032,214
|
|
|
|
791,355
|
|
|
|
3,064,519
|
|
|
|
1,771,912
|
|
General and administrative
|
|
|
268,816
|
|
|
|
360,346
|
|
|
|
526,354
|
|
|
|
410,821
|
|
Wages
|
|
|
98,096
|
|
|
|
221,538
|
|
|
|
9,307,374
|
|
|
|
311,525
|
|
Total operating expenses
|
|
|
3,399,126
|
|
|
|
1,373,239
|
|
|
|
12,898,247
|
|
|
|
2,494,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
3,396,126
|
|
|
|
1,373,239
|
|
|
|
12,895,247
|
|
|
|
2,494,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement of debt
|
|
|
(300,323
|
)
|
|
|
—
|
|
|
|
(289,313
|
)
|
|
|
—
|
|
Gain/(Loss) on change in derivative liability
|
|
|
(855,689
|
)
|
|
|
72,940
|
|
|
|
(1,106,617
|
)
|
|
|
72,940
|
|
Interest expense
|
|
|
(196,155
|
)
|
|
|
(693,366
|
)
|
|
|
(1,083,053
|
)
|
|
|
(706,224
|
)
|
Total other expense
|
|
|
(1,352,167
|
)
|
|
|
(620,426
|
)
|
|
|
(2,478,983
|
)
|
|
|
(633,284
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(4,748,293
|
)
|
|
$
|
(1,993,665
|
)
|
|
$
|
(15,374,230
|
)
|
|
$
|
(3,127,542
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share – Basic and Diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding
|
|
|
2,686,505,096
|
|
|
|
122,264,196
|
|
|
|
1,221,450,275
|
|
|
|
92,786,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of These Financial Statements
|
VIVA ENTERTAINMENT GROUP INC.
|
Condensed Statements of Cash Flows
|
For the Nine Months Ended July 31, 2017 and 2016
|
(Unaudited)
|
|
|
|
2017
|
|
2016
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(15,374,230
|
)
|
|
$
|
(3,127,542
|
)
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
5,172
|
|
|
|
3,349
|
|
Amortization of debt discount
|
|
|
1,052,477
|
|
|
|
95,728
|
|
Shares previously retired
|
|
|
(444
|
)
|
|
|
—
|
|
Derivative expense
|
|
|
1,106,617
|
|
|
|
(519,620
|
)
|
Loss on settlement of debt
|
|
|
289,313
|
|
|
|
—
|
|
Penalties incurred on unpaid debt
|
|
|
(190,212
|
)
|
|
|
—
|
|
Loss on forgiveness of debt
|
|
|
33,764
|
|
|
|
—
|
|
Common stock issued and payable for services
|
|
|
12,279,796
|
|
|
|
1,916,161
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
197,618
|
|
|
|
39,116
|
|
Accrued expenses
|
|
|
205,029
|
|
|
|
45,189
|
|
Other assets
|
|
|
—
|
|
|
|
(69,270
|
)
|
Net Cash Used in Operating Activities
|
|
|
(395,100
|
)
|
|
|
(577,559
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
Effect of reverse merger
|
|
|
—
|
|
|
|
(171,504
|
)
|
Net Cash Used in Investing Activities
|
|
|
—
|
|
|
|
(171,504
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
|
Net proceeds from issuance of related party payable
|
|
|
102,070
|
|
|
|
—
|
|
Proceeds from sale of common stock
|
|
|
12,000
|
|
|
|
—
|
|
Proceeds from issuance of convertible notes
|
|
|
321,260
|
|
|
|
763,430
|
|
Net Cash From Financing Activities
|
|
|
435,330
|
|
|
|
763,430
|
|
Increase in Cash
|
|
|
40,230
|
|
|
|
14,367
|
|
Cash - Beginning of Period
|
|
|
385
|
|
|
|
—
|
|
Cash - End of Period
|
|
$
|
40,615
|
|
|
$
|
14,367
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
Stock issued on conversion of debt, interest and penalties
|
|
$
|
1,100,060
|
|
|
$
|
—
|
|
Derivative adjustment from debt extinguishment
|
|
|
10,590
|
|
|
|
—
|
|
Derivative settlement
|
|
|
1,459,101
|
|
|
|
—
|
|
Discount from derivative issuance
|
|
|
559,055
|
|
|
|
—
|
|
Stock issued for debt discount
|
|
|
—
|
|
|
|
100,000
|
|
Beneficial Conversion Feature
|
|
|
—
|
|
|
|
35,000
|
|
Stock issued for debt discount - derivative
|
|
|
—
|
|
|
|
1,119,560
|
|
Cash paid for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of These Financial Statements
|
VIVA
ENTERTAINMENT GROUP INC.
Notes
to Financial Statements
NOTE
1 – NATURE OF OPERATIONS
Description
of Business and History
The
Company was incorporated on October 26, 2009 in the State of Nevada. The Company originally engaged in the development of a website
and also the design and development of a catalogue to sell over the counter and prescription medications, and supplements. In
2012, the Company undertook a change in focus to the natural resources sector where it was engaged in the acquisition and exploration
of base metals and mineral mining properties.
On
April 5, 2016, the Company completed the purchase of Viva Entertainment Group, Inc. (“Viva Entertainment”), a Delaware
corporation, from EMS Find, Inc. (“EMS”) pursuant to a stock purchase agreement. Viva Entertainment’s Chief
Executive Officer, Johnny Falcones, was appointed as the Company’s sole director, President and Chief Executive Officer
to manage the development and marketing of Viva Entertainment’s over the top (IPTV/OTT) application for connected TV’s,
desktop computers, tablets, and smart phones.
Pursuant
to the stock purchase agreement, the Company and EMS agreed to transfer control of Viva Entertainment to the Company through the
purchase of all outstanding shares of stock of Viva Entertainment by the Company in exchange for the issuance to EMS of a 10%
promissory note in the principal amount of $100,000, due six months from the Closing (the “EMS Note”), and the issuance
of 22,000,000 shares of common stock to Johnny Falcones. For accounting purposes, the transaction was treated as a reverse merger
since the acquired entity now forms the basis for operations and the transaction resulted in a change in control, with the acquired
company electing to become the successor issuer for reporting purposes. The accompanying financial statements have been prepared
to reflect the assets, liabilities and operations of Viva Entertainment Group, Inc. exclusive of Black River Petroleum since all
predecessor operations were discontinued. As part of the transaction, stock payable and amounts due to former officers were forgiven,
with the balances recorded as Contributed Capital. For equity purposes, additional paid-in capital and retained deficit shown
are those of Viva, exclusive of Black River Petroleum. Viva had no operations prior to the quarter ended April 30, 2016.
In
management’s opinion, all adjustments necessary for a fair statement of the results for the presented periods have been
made. All adjustments made were of a normal recurring nature.
Viva
Entertainment Group Inc. (the “Company”) develops and markets Viva Entertainment’s over the top (IPTV/OTT) application
for connected TV’s, desktop computers, tablets, and smart phones. The Company is based in Briarwood, New York.
Going
Concern
These financial statements have been
prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations
for the next fiscal year. Realization value may be substantially different from carrying values as shown and these financial
statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern. As of July 31, 2017,
the Company has a working capital deficiency and has an accumulated deficit of $20,127,709. The continuation of Viva
Entertainment Group as a going concern is dependent upon the continued financial support from its shareholders, the ability of
the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These
factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States for interim information Regulation S-K. Accordingly, they do not include all of the information and footnotes required by
accounting principles generally accepted in the United States for complete financial statements. In the opinion of management,
all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included.
These financial statements should be read in conjunction with out audited financial statements for the year ended October 31, 2016.
Use
of Estimates
The preparation of financial statements
in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue
and expenses in the reporting period. We regularly evaluate our estimates and assumptions related to the useful life and recoverability
of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances. We base our estimates and assumptions
on current facts, historical experience and various other factors 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 and the accrual of costs
and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely
from our estimates. To the extent there are material differences between our estimates and the actual results, our future results
of operations will be affected.
Loss
Per Common Share
The Company reports net loss per share
in accordance with provisions of the FASB. The provisions require dual presentation of basic and diluted loss per share.
Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss per share utilizes the average market
price per share when applying the treasury stock method in determining common stock equivalents. During a period of net loss, all potentially dilutive securities are anti-dilutive. Accordingly, for the three
and nine months ended July 31, 2017 and 2016, potentially dilutive securities have been excluded from the computations since they
would be anti-dilutive. However, these dilutive securities could potentially dilute earnings per share in the future.
Fair
Value of Financial Instruments
Pursuant to ASC No. 820, “Fair
Value Measurements and Disclosures”, the Company is required to estimate the fair value of all financial instruments included
on its balance sheet as of July 31, 2017 and October 31, 2016. The Company’s financial instruments consist of cash and derivative
liabilities. The Company considers the carrying value of such amounts in the financial statements to approximate their
fair value due to the short-term nature of these financial instruments.
The Company adopted ASC No. 820-10 (ASC
820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities. ASC 820-10 defines
fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of
America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting
pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.
ASC
820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair
value, except for the fair value of leased property as defined in SFAS 13. ASC 820-10 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources
(observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, that are developed based
on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad
levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are
described below:
|
•
|
Level
1
|
Unadjusted quoted
prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
•
|
Level
2
|
Inputs other than
quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including
quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities
in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest
rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
•
|
Level
3
|
Inputs that are
both significant to the fair value measurement and unobservable. These inputs rely on management's own assumptions about the
assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs are developed based
on the best information available in the circumstances and July include the Company's own data.)
|
The
following presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring
basis as of July 31, 2017 and October 31, 2016:
July
31, 2017:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Convertible Notes Payable, net
|
|
$
|
316,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
316,072
|
|
Derivative Liability
|
|
|
1,444,670
|
|
|
|
|
|
|
|
|
|
|
|
1,444,670
|
|
Total
|
|
$
|
1,760,742
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,760,742
|
|
October
31, 2016:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Convertible Notes Payable, net
|
|
$
|
367,323
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
367,323
|
|
Derivative Liability
|
|
|
1,248,689
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,248,689
|
|
Total
|
|
$
|
1,616,012
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,616,012
|
|
Derivative
Financial Instruments
Fair
value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity
instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company
uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible
debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.
If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments
as derivative financial instruments.
Once
determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease
in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair
value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.
Cash
and Cash Equivalents
For
purposes of the Condensed Statements of Cash Flows, the Company considers liquid investments with an original maturity of
three months or less to be cash equivalents. As of July 31, 2017 and October 31, 2016, the Company had no cash
equivalents.
NOTE
3 – RELATED PARTY TRANSACTIONS
In connection with the acquisition
of Viva Entertainment and the resignation of our former officers and directors, the Company received forgiveness of stock payable
of $3,390,000 and amounts due to former CEO of $132,854. These amounts were written off prior to closing and have therefore not
been included in Equity. However, the former CEO funded an additional $30,000 to the Company for working capital during the year
ended October 31, 2016.
The detail composition of $384,936 in
accrued wages with related parties as of July 31, 2017 is as follows: Johnny Falcones $126,840, Alberto Gomez $152,548 and John
Sepulveda $105,548. This accrual covered services rendered by the employees for the period from April, 2016 through July 31, 2017
less payments made to such employees during the period.
Stock payable includes $1,929,200
to officers and directors of the company due to unissued shares earned on employment agreements.
In addition, John Sepulveda funded $10,000
to the Company for working capital during the year ended October 31, 2016 which remains outstanding together with advances, net
of $102,070 from the spouse of the company’s Chief Executive Officer as of July 31, 2017.
NOTE
4 – CONVERTIBLE NOTES PAYABLE
|
|
Principal
Balance
|
|
Loan
Discount
|
|
Accrued
Interest
|
October
31, 2016
|
|
$
|
975,100
|
|
|
$
|
(607,777
|
)
|
|
$
|
43,426
|
|
Issued
in the year
|
|
$
|
321,260
|
|
|
|
(663,242
|
)
|
|
|
—
|
|
Converted
into stock or repaid
|
|
|
(709,896
|
)
|
|
|
—
|
|
|
|
(375,888
|
)
|
Amortization
of debt discount
|
|
|
—
|
|
|
|
1,052,477
|
|
|
|
—
|
|
Interest
accrued
|
|
|
—
|
|
|
|
—
|
|
|
|
404,205
|
|
July
31, 2017
|
|
$
|
586,464
|
|
|
$
|
(218,542
|
)
|
|
$
|
71,743
|
|
The
Company evaluated the terms of the conversion features of its convertible debentures in accordance with ASC Topic No. 815 - 40,
Derivatives and Hedging - Contracts in Entity's Own Stock
and determined they are indexed to the Company's common stock
and the conversion features meet the definition of a liability, and therefore bifurcated the conversion features and accounted
for them as a separate derivative liability.
The
following table summarized the convertible notes and activity in the nine months ended July 31, 2017:
For Nine Months Ended: July 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holders
|
|
Agreement Date
|
|
Maturity
|
|
Original Amount
|
|
Rate
|
|
Beginning
Balance
|
|
Borrowings
|
|
Repayments
|
|
Conversion
|
|
Assignments
|
|
Ending
Balance
|
Essex Global #1
|
|
4/6/2016
|
|
3/30/2017
|
|
$
|
145,000
|
|
|
|
10
|
%
|
|
|
145,000
|
|
|
|
16,218
|
|
|
|
—
|
|
|
|
(62,034
|
)
|
|
|
(99,184
|
)
|
|
|
—
|
|
EMS Find, Inc.
|
|
2/27/2017
|
|
3/31/2018
|
|
$
|
100,000
|
|
|
|
10
|
%
|
|
|
100,000
|
|
|
|
77,718
|
|
|
|
—
|
|
|
|
(69,923
|
)
|
|
|
(53,795
|
)
|
|
|
54,001
|
|
LG Capital #1
|
|
5/3/2016
|
|
5/3/2017
|
|
$
|
78,750
|
|
|
|
10
|
%
|
|
|
78,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(77,940
|
)
|
|
|
—
|
|
|
|
810
|
|
Cerberus #1
|
|
5/3/2016
|
|
5/3/2017
|
|
$
|
78,750
|
|
|
|
10
|
%
|
|
|
78,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(39,745
|
)
|
|
|
—
|
|
|
|
39,005
|
|
Green Tree #1
|
|
5/23/2016
|
|
5/23/2017
|
|
$
|
50,000
|
|
|
|
12
|
%
|
|
|
50,000
|
|
|
|
19,158
|
|
|
|
—
|
|
|
|
(69,158
|
)
|
|
|
—
|
|
|
|
—
|
|
LG Capital #2
|
|
6/3/2016
|
|
6/3/2017
|
|
$
|
78,750
|
|
|
|
10
|
%
|
|
|
78,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(26,575
|
)
|
|
|
—
|
|
|
|
52,175
|
|
Cerberus #2
|
|
6/8/2016
|
|
6/8/2017
|
|
$
|
78,750
|
|
|
|
10
|
%
|
|
|
78,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
78,750
|
|
Collision Capital, LLC #1
|
|
7/1/2016
|
|
7/1/2017
|
|
$
|
110,000
|
|
|
|
12
|
%
|
|
|
110,000
|
|
|
|
92,523
|
|
|
|
—
|
|
|
|
(172,523
|
)
|
|
|
—
|
|
|
|
30,000
|
|
Green Tree #2
|
|
7/1/2016
|
|
7/1/2017
|
|
$
|
50,000
|
|
|
|
12
|
%
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,112
|
)
|
|
|
(10,000
|
)
|
|
|
29,888
|
|
Essex Global #2
|
|
7/19/2016
|
|
7/19/2017
|
|
$
|
37,100
|
|
|
|
10
|
%
|
|
|
37,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(37,100
|
)
|
|
|
—
|
|
|
|
—
|
|
DBL Group, Inc.
|
|
8/1/2016
|
|
8/1/2017
|
|
|
25,000
|
|
|
|
8
|
%
|
|
|
25,000
|
|
|
|
20,000
|
|
|
|
—
|
|
|
|
(24,960
|
)
|
|
|
(20,000
|
)
|
|
|
40
|
|
Robert Rico
|
|
8/1/2016
|
|
8/1/2017
|
|
$
|
25,000
|
|
|
|
8
|
%
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,000
|
)
|
|
|
—
|
|
CrossOver Promotions
|
|
8/2/2016
|
|
8/2/2017
|
|
$
|
35,000
|
|
|
|
8
|
%
|
|
|
35,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(35,000
|
)
|
|
|
—
|
|
Hector Cruz
|
|
8/5/2016
|
|
8/5/2017
|
|
$
|
25,000
|
|
|
|
8
|
%
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,000
|
)
|
|
|
10,000
|
|
Collision Capital, LLC #2
|
|
8/4/2016
|
|
8/4/2017
|
|
$
|
25,000
|
|
|
|
12
|
%
|
|
|
25,000
|
|
|
|
10,499
|
|
|
|
—
|
|
|
|
(35,499
|
)
|
|
|
—
|
|
|
|
—
|
|
Crown Bridge Partners
|
|
9/7/2016
|
|
9/7/2017
|
|
$
|
45,000
|
|
|
|
8
|
%
|
|
|
45,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(45,000
|
)
|
|
|
—
|
|
|
|
—
|
|
Mercedes Benitez
|
|
8/15/2016
|
|
8/15/2017
|
|
$
|
13,000
|
|
|
|
8
|
%
|
|
|
13,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,000
|
)
|
|
|
—
|
|
Green Tree #3
|
|
8/4/2016
|
|
8/4/2017
|
|
$
|
25,000
|
|
|
|
12
|
%
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,000
|
|
Green Tree #4
|
|
9/12/2016
|
|
9/12/2017
|
|
$
|
50,000
|
|
|
|
12
|
%
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(42,500
|
)
|
|
|
—
|
|
|
|
7,500
|
|
John Sepulveda
|
|
8/15/2016
|
|
On demand
|
|
$
|
10,000
|
|
|
|
8
|
%
|
|
|
10,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,000
|
|
J. Soleil
|
|
11/10/2016
|
|
On demand
|
|
$
|
21,280
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
125,190
|
|
|
|
(23,120
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
102,070
|
|
GPL Ventures
|
|
1/25/2017
|
|
7/25/2017
|
|
$
|
35,000
|
|
|
|
12
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
(33,764
|
)
|
|
|
(1,236
|
)
|
|
|
35,000
|
|
|
|
—
|
|
Power Up Lending Group
|
|
1/3/2017
|
|
11/10/2017
|
|
$
|
28,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
42,000
|
|
|
|
—
|
|
|
|
(42,000
|
)
|
|
|
—
|
|
|
|
—
|
|
Educational Group
|
|
1/26/2017
|
|
1/26/2018
|
|
$
|
20,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
51,500
|
|
|
|
—
|
|
|
|
(71,500
|
)
|
|
|
20,000
|
|
|
|
—
|
|
Macro Services
|
|
1/26/2017
|
|
1/26/2018
|
|
$
|
10,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
26,050
|
|
|
|
—
|
|
|
|
(36,050
|
)
|
|
|
10,000
|
|
|
|
—
|
|
L&H
|
|
1/2/2017
|
|
1/2/2018
|
|
$
|
34,184
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
1,000
|
|
|
|
—
|
|
|
|
(45,184
|
)
|
|
|
44,184
|
|
|
|
—
|
|
Emerald Coast
|
|
1/27/2017
|
|
1/27/2018
|
|
$
|
15,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,000
|
)
|
|
|
15,000
|
|
|
|
—
|
|
GreenTree #5
|
|
10/28/2016
|
|
10/28/2017
|
|
$
|
15,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,000
|
)
|
|
|
15,000
|
|
|
|
—
|
|
Ke Li
|
|
10/28/2016
|
|
10/28/2017
|
|
$
|
10,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,000
|
)
|
|
|
10,000
|
|
|
|
—
|
|
Williams Holding Corp
|
|
3/1/2017
|
|
3/1/2018
|
|
$
|
25,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9,950
|
)
|
|
|
25,000
|
|
|
|
15,050
|
|
Biz Development #1
|
|
3/20/2017
|
|
3/20/2018
|
|
$
|
28,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
12,300
|
|
|
|
—
|
|
|
|
(27,465
|
)
|
|
|
28,000
|
|
|
|
12,836
|
|
Howard Schraub (Global)
|
|
3/27/2017
|
|
3/27/2018
|
|
$
|
53,795
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
8,890
|
|
|
|
—
|
|
|
|
(62,685
|
)
|
|
|
53,795
|
|
|
|
—
|
|
George Harrison
|
|
3/15/2017
|
|
3/15/2018
|
|
$
|
5,000
|
|
|
|
12
|
%
|
|
|
—
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,000
|
|
Chonillo Law Group
|
|
5/2/2017
|
|
11/2/2017
|
|
$
|
50,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
Biz Development #2
|
|
5/5/2017
|
|
10/5/2017
|
|
$
|
32,500
|
|
|
|
12
|
%
|
|
|
—
|
|
|
|
32,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,500
|
|
Collision Capital #3
|
|
5/22/2017
|
|
5/22/2018
|
|
$
|
40,000
|
|
|
|
15
|
%
|
|
|
—
|
|
|
|
40,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40,000
|
|
GreenTree #6
|
|
5/22/2017
|
|
5/22/2018
|
|
$
|
40,000
|
|
|
|
15
|
%
|
|
|
—
|
|
|
|
40,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40,000
|
|
Integrated Ventures (EMS)
|
|
7/5/2017
|
|
7/5/2018
|
|
$
|
50,000
|
|
|
|
10
|
%
|
|
|
—
|
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
Howard Schraub #2
|
|
7/24/2017
|
|
7/24/2018
|
|
$
|
45,760
|
|
|
|
10
|
%
|
|
|
—
|
|
|
|
45,760
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45,760
|
|
Howard Schraub #3
|
|
7/24/2017
|
|
7/24/2018
|
|
$
|
20,000
|
|
|
|
8
|
%
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,085,100
|
|
|
|
766,306
|
|
|
|
(56,884
|
)
|
|
|
(1,049,138
|
)
|
|
|
5,000
|
|
|
|
750,384
|
|
NOTE
4 – CONVERTIBLE NOTES PAYABLE - CON’T
During the quarter ended July 31,
2017, the Company issued a total of $258,260 in new convertible debt, as follows:
Name
|
|
Date
|
|
Maturity Date
|
|
Amount
|
|
Rate
|
Chonillo Law Group
|
|
|
5/2/2017
|
|
|
|
11/2/2017
|
|
|
$
|
50,000
|
|
|
|
8
|
%
|
Biz Development #2
|
|
|
5/5/2017
|
|
|
|
10/5/2017
|
|
|
$
|
32,500
|
|
|
|
12
|
%
|
Collision Capital #3
|
|
|
5/22/2017
|
|
|
|
5/22/2018
|
|
|
$
|
40,000
|
|
|
|
15
|
%
|
GreenTree #6
|
|
|
5/22/2017
|
|
|
|
5/22/2018
|
|
|
$
|
40,000
|
|
|
|
15
|
%
|
Integrated Ventures (EMS)
|
|
|
7/5/2017
|
|
|
|
7/5/2018
|
|
|
$
|
50,000
|
|
|
|
10
|
%
|
Howard Schraub #2
|
|
|
7/24/2017
|
|
|
|
7/24/2018
|
|
|
$
|
45,760
|
|
|
|
10
|
%
|
The difference between the value of
the derivative on the date of issuance and the note amounts is recorded as interest expense.
ASC 815 requires assessment of the fair
market value of derivative liability at the end of each reporting period and recognition of any change in the fair market value
as other income or expense.
Changes
in Derivative Liabilities were as follows:
October 31, 2016
|
|
$
|
1,248,689
|
|
Issuance of derivative
|
|
|
559,055
|
|
Conversion into stock or assignment
|
|
|
(1,459,101
|
)
|
Extinguishment of debt
|
|
|
(10,590
|
)
|
Change in fair value
|
|
|
1,106,617
|
|
July 31, 2017
|
|
$
|
1,444,670
|
|
NOTE
5 – NOTES PAYABLE
Pursuant
to the Stock Purchase Agreement, the Company issued to EMS a promissory note in the principal amount of $100,000, due six months
from the Closing, which represents the purchase price paid by the Company for Viva Entertainment. All principal and interest was
converted into common stock during the quarter ended April 30, 2017.
NOTE 6
- COMMON STOCK
During the three months ended
July 31, 2017 the Company had the following common stock transactions:
|
·
|
44,350,000 shares previously issued on the conversion of notes payable were cancelled due to change in broker services.
These will be reissued during the period ended October 31, 2017.
|
|
·
|
2,685,261,047 shares issued on the conversion of debentures payable (see Note 4).
|
Each
of these issuances was made pursuant to an exemption from registration under Rule 144 of the Securities Act of 1933.
NOTE
7 – STOCK ISSUABLE
Common stock issuable consists
of shares payable under employment contracts with officers of the Company valued at $1,929,200 and a consulting contract valued
at $1,150,000. Common stock issuable was $3,079,200 and $512,400 as of July 31, 2017 and October 31, 2016.
Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
Cautionary Notice Regarding Forward Looking Statements
The information contained in Item
2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Actual results
may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set
forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking
statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual
results will not be different from expectations expressed in this report.
This filing contains a number of
forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies,
products, future results and events, and financial performance. All statements made in this filing other than statements of historical
fact, including statements addressing operating performance, events, or developments which management expects or anticipates will
or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products,
adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information,
are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,”
“estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements,
but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking.
These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results,
performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied
by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any
future events or circumstances.
Readers should not place undue reliance
on these forward-looking statements, which are based on management’s current expectations and projections about future events,
are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below),
and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the
results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences
include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K and in the press releases and other
communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors
which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Overview
Viva Entertainment Group Inc.
(the “Company”) is a business that develops and markets Viva Entertainment’s over the top (IPTV/OTT) application
for connected TV’s, desktop computers, tablets, and smart phones. The Company is based in Briarwood, New York.
We were incorporated in the State of
Nevada on October 26, 2009. From inception, we were originally engaged in the development of a website and also the design and
development of a catalogue to sell over the counter and prescription medications, and supplements. In 2012, we undertook a change
in our focus to the natural resources sector where it was engaged in the acquisition and exploration of base metals and mineral
mining properties. After an unsuccessful exploration program on our mineral properties we decided to enter the market for over
the top (IPTV/OTT) application for connected TV’s, desktop computers, tablets, and smart phones.
On April 5, 2016, we completed
the purchase from EMS Find, Inc. (“EMS”) of Viva Entertainment Group, Inc. (“Viva Entertainment”), a Delaware
corporation and a subsidiary of EMS, pursuant to a stock purchase agreement (“Stock Purchase Agreement”), and Viva
Entertainment’s Chief Executive Officer, Johnny Falcones, resigned from all positions at EMS and has been elected as our
sole director and President and Chief Executive Officer to manage the development and marketing of Viva Entertainment’s over
the top (IPTV/OTT) application for connected TV’s, desktop computers, tablets, and smart phones.
This purchase represents a new business
and industry which we operate in. Pursuant to the Stock Purchase Agreement, the Company and EMS agreed to transfer control of Viva
Entertainment to the Company through the purchase from the Seller by the Purchaser of all 800 outstanding shares of stock of Viva
Entertainment to the Company in exchange for the issuance to EMS of a 10% promissory note in the principal amount of $100,000,
due six months from the Closing (the “EMS Note”), which represents the purchase price paid by us for Viva Entertainment.
In connection with the closing, Alexander Stanbury, our former President and Chief Executive Officer, transferred to Johnny
Falcones 26,629,371 shares of restricted common stock of the Company from the shares of common stock owned by Mr. Stanbury in exchange
for payment of $93,625 from the $135,000 of financing arranged with Essex Global Investment Corp. for the acquisition of the Company
(the “Acquisition Financing Facility”).
On April 6, 2016, we closed on the $135,000
Acquisition Financing Facility pursuant to a securities purchase agreement, dated April 6, 2016 (the "Essex Securities Purchase
Agreement"), with Essex Global Investment Corp, a Nevada corporation ("Essex"), for the sale of a convertible promissory
note (the "Essex Note") in the principal amount of $145,000, with an original issue discount of $10,000.
The Essex Note, which is due on March
30, 2017, bears interest at the rate of 10% per annum. All principal and accrued interest on the Note was convertible at any time
into shares of our common stock at the election of Essex at a conversion price for each share of Common Stock equal to 55%
of
the lowest reported trading price of the Company’s common stock for the twenty prior trading days including the day upon
which the conversion notice is received us or our transfer agent. The conversion price discount will be decreased to 45% if the
Company experiences a DTC "chill" on its shares. If we are not current within ninety days from the date of the Note,
the conversion discount will increase by 20%, so that the conversion price would be 35% of the trading price as calculated above.
We have the right to prepay the Essex
Note during the first six months following the date of issuance of the Essex Note with a premium of up to 135% of all amounts owed
to Essex, including default interest, depending upon when the prepayment is effectuated. The Essex Note may not be redeemed after
180 days.
The Essex Note contains
default events which, if triggered and not timely cured, will result in default interest and penalties.
As
of July 31, 2017, the Essex Note was paid in full.
On April 8, 2016, in connection with
the purchase of Viva Entertainment Group, Inc., our Board of Directors authorized the issuance of an aggregate of 37,170,629 shares
of common stock, comprised of 22,000,000 issued to our Founder and Chief Executive Officer (5,000,000 of which are registered in
name of the wife of the CEO), 13,170,629 as common shares for consulting services to various consultants and 2,000,000 common shares
as consideration for an investor entering into a share purchase agreement. An additional 500,000 common shares was issued for general
corporate purposes.
Plan of Operation
As of July 31, 2017 we had a working
capital deficiency of $2,604,275, had small revenues from subscription in amount of $3,000, and have an accumulated deficit of
$20,127,709.
Our auditors have issued a going
concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business
for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any
material revenues or profits.
We have only four officers and directors.
They are responsible for our managerial and organizational structure which will include preparation of disclosure and accounting
controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, they will be responsible for the administration
of the controls. Should they not have sufficient experience, they may be incapable of creating and implementing the controls which
may cause us to be subject to sanctions and fines by the SEC which ultimately could cause you to lose your investment.
Limited Operating History
There is no historical financial information
about us upon which to base an evaluation of our performance. We have not generated any revenues to date. We cannot guarantee we
will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources.
Results of Operations
Revenues
We had revenues from subscription in
amount of $3,000 for the three and nine months ended July 31, 2017, compared to zero revenues during the comparative periods in
2016.
Operating Expenses
For the three and nine months ended
July 31, 2017, we incurred operating expenses in the amounts of $3,399,126 and $12,898,247, respectively. We incurred operating
expenses in the amounts of $1,373,239 and $2,494,258, respectively during the three and nine months ended July 31, 2016. Our operating
expenses were comprised of: (i) consulting services expenses of $3,032,214 and $3,064,519 for the three and nine months ended
July 31, 2017, respectively (ii) general and administrative expenses of $268,816 and $526,354 for the three and nine months ended
July 31, 2017, respectively, and (iii) wage expenses of $98,096 and $9,307,374 for three and nine months ended July 31, 2017,
respectively. Comparatively, our operating expenses were comprised of: (i) consulting services expenses of $791,355 and $1,771,912
for the three and nine months ended July 31, 2016, respectively (ii) general and administrative expenses of $360,346 and $410,821
for the three and nine months ended July 31, 2016, respectively, and (iii) wage expenses of $221,538 and $311,525 for three and
nine months ended July 31, 2016, respectively.
Net Loss
Our net loss for the three and
nine months ended July 31, 2017 was $4,748,293 and $15,374,230, respectively, compared to net losses of $1,993,665 and
$3,127,542 for the three and nine months ended July 31, 2016. The increase in net loss was the result of the increase in
compensation and above mentioned costs. During the three and nine months ended July 31, 2017, we also incurred losses of
$855,689 and $1,106,617, respectively, on changes of the derivative liability, compared to gain of $72,940 on changes of the
derivative liability during the three and nine months ended July 31, 2016. In addition, we had interest expenses of $196,155
and $1,083,053 during the three and nine months ended July 31, 2017, compared to interest expenses of $693,366 and $706,224
during the three and nine months ended July 31, 2016.
Liquidity and Capital Resources
As of July 31, 2017, we had cash of
$40,615. As of October 31, 2016, we had cash of $385.
Net cash used in operating
activities was $395,100 and $577,559 for the nine months ended July 31, 2017 and 2016, respectively. The net cash used in
operations was principally attributable to net losses of $15,374,230 and $3,127,542 during the nine months ended July 31,
2017 and 2016, respectively, offset principally by amortization of debt discount of $1,052,477 and $95,728, amortization
expense of $5,172 and $3,349, common shares issued for services of $12,279,796 and $1,916,161, increase in accounts payable
by $197,618 and $39,116, and increase in accrued expenses by $205,029 and $45,189 in such same periods, respectively. Loss of
settlement of debt of $289,313 and -0-, in such same periods, respectively.
Cash flows used for investing activities
were $-0- during the nine months ended July 31, 2017, compared to net cash of $171,504 used in investing activities during the
nine months ended July 31, 2016, which was solely as a result of the effects of the reverse merger.
Cash flows provided by financing activities
were $435,330 and $763,430 for nine months ended July 31, 2017 and 2016, respectively. Positive cash flows from financing activities
during the nine months ended July 31, 2017 were due primarily to proceeds from related party payable of $102,070, proceeds from
sales of common stock and convertible notes in amount of $12,000 and $321,260, respectively. Positive cash flows from financing
activities during the nine months ended July 31, 2016 were solely due to proceeds from convertible notes in amount of $763,430.
We have small revenues from subscription
in amount of $3,000 for the three and nine months ended July 31, 2017, and have four salaried employees including Johnny Falcones,
our officer and director. We currently require very limited resources but intend to hire employees and consultants in the latter
part of 2017 for the Viva Entertainment operations. In due course, should we require capital for these operations, we will need
to raise additional capital. There is no guarantee that we will be able to raise further capital. At present, we have not made
any arrangements to raise additional capital but are diligently working on this.
If we need additional capital and cannot
raise it we will either have to suspend operations until we do raise the capital or cease operations entirely. Other than as described
in this paragraph, we have no other financing plans.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Recent Accounting Pronouncements
In March 2016, the FASB issued ASU 2016-09,
Stock Compensation,
which is intended to simplify the accounting for share-based payment award transactions. The new standard
will modify several aspects of the accounting and reporting for employee share-based payments and related tax accounting impacts,
including the presentation in the statements of operations and cash flows of certain tax benefits or deficiencies and employee
tax withholdings, as well as the accounting for award forfeitures over the vesting period. The guidance is effective for fiscal
years beginning after December 15, 2016, including interim periods within that year, and will be adopted by the Company in the
first quarter of fiscal 2017. The Company anticipates the new standard will result in an increase in the number of shares used
in the calculation of diluted earnings per share and will add volatility to the Company’s effective tax rate and income tax
expense.
Subsequent Events
None.