The accompanying notes are an integral part
of these financial statements.
AppSoft Technologies (the “Company”)
was organized under the laws of the State of Nevada March 24, 2015. The Company’s fiscal year end is December
31
st
. The Company develops, publishes and markets mobile software applications for smartphones and tablet devices (“Apps”).
We currently own a portfolio comprising over 400 Apps titles including games designed to appeal to a broad cross section of consumers
and legal-related Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines
and digests of court decisions rendered by federal courts. Consumers download our Apps through direct-to-consumer digital storefronts,
such as the Apple App Store and Google Play Store.
We currently generate revenue from sales,
or downloads, of our Apps and from advertisements published on our ad supported game titles.
The accompanying financial statements have
been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the
normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated
of $608,759 and cash used in operations of $8,180 at March 31, 2018.
The Company’s ability to continue as
a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing
to meet its obligations and repay its liabilities arising from normal business operations when they come due. These
circumstances raise substantial doubt about the Company’s ability to continue as a going concern for the 12 months from the
date when these financial statements were issued. The accompanying financial statements do not include any adjustments that might
arise because of this uncertainty.
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation - The financial
statements included herein were prepared under Generally Accepted Accounting Principles (GAAP).
All adjustments have been made which in the
opinion of management are necessary, normal, and recurring in nature for presentation.
Interim filings should be read in conjunction
with the Company’s annual report as of December 31, 2017.
Cash and Cash Equivalents - For purposes
of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to
be cash equivalents.
Management’s Use of Estimates - The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates. The financial statements above
reflect all of the costs of doing business.
Revenue Recognition - The Company
applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company
recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The
Company considers revenue realized or realizable and earned when all the following criteria are met:
|
(i)
|
persuasive evidence of an arrangement exists,
|
|
(ii)
|
the services have been rendered and all required milestones
achieved,
|
|
(iii)
|
the sales price is fixed or determinable, and
|
Emerging Growth Company Critical Accounting Policy Disclosure:
We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging
growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended
transition period. (See ASU 2014-09)
Comprehensive Income (Loss) - The Company reports
Comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification
which establishes standards for the reporting and display of comprehensive income and its components in the financial statements.
There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES—CONT’D
Net Income per Common Share - Net loss
per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic
net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding
during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of
shares of common stock and potentially outstanding shares of common stock during each period. There was a total of
19,459,000 upon conversion of preferred stock and 20,000 upon conversion for an outstanding note payable as of March 31,
2018.
Deferred Taxes - The Company accounts for
income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and
liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and
are measured using the enacted tax rates and laws that will be in effect when the differences are expected to
reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more
likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the
statements of operations in the period that includes the enactment date.
Fair Value of Financial Instruments - The
carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the
short-term maturity of these instruments.
Accounts Receivable - Accounts deemed
uncollectible are written off in the year they become uncollectible. As of March 31, 2018, and March 31, 2017 the balance in
Accounts Receivable was $0.
Impairment of Long-Lived Assets - The
Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB
Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure
requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected
cash flows. If so, it is impaired and is written down to fair value, which is determined based on either discounted future
cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were
recognized during the periods ended March 31, 2018 or March 31, 2017.
Stock-Based Compensation - The Company
accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB
Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure
the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the
award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service
in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity
instruments for which employees do not render the requisite service.
Fair Value for Financial Assets and
Financial Liabilities - The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for
disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards
Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To
increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes
a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad
levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value
hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
|
Level 3
|
Pricing inputs that are generally unobservable inputs and not corroborated by market data.
|
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES—CONT’D
The carrying amounts of the Company’s
financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity
of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s
best estimate of interest rates that would be available to the Company for similar financial arrangement at March 31, 2018 or March
31, 2017.
The Company does not have any assets or liabilities
measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments
for assets and liabilities measured at fair value at April 30, 2015, nor gains or losses are reported in the statement of operations
that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting
date for the periods ended March 31, 2018 or March 31, 2017.
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02,
Leases
, amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases
on their balance sheets and making targeted changes to lessor accounting. The new standard requires a modified retrospective transition
approach for all leases existing at, or entered after, the date of initial application, with an option to use certain transition
relief. The guidance will be effective in the first quarter of 2019 and allows for early adoption. The Company does not expect
there to be a material impact from adopting this new guidance.
In June 2016, the FASB issued ASU 2016-13, Financial
Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most
financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition
of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019
and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company does not expect
there to be a material impact from adopting this new guidance.
In August 2016, the FASB issued ASU 2016-15,
Statement
of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)
,
that clarifies how certain cash receipts and cash payments should be classified on the statement of cash flows. This ASU addresses
eight specific cash flow issues with the objective of reducing the existing diversity in practice. The guidance is effective
for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted.
The Company does not expect there to be a material impact from adopting this new guidance.
In January 2017, the FASB issued ASU 2017-01,
Clarifying the Definition of a Business, which revises the definition of a business and assists in the evaluation of when a set
of transferred assets and activities is a business. ASU 2017-01 is effective for interim and annual reporting periods beginning
after December 15, 2017 and should be applied prospectively. Early adoption is permitted under certain circumstances. The Company
does not expect the adoption of this guidance will have a material impact on its financial statements.
In January 2017, the FASB issued ASU 2017-04,
Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step two of the goodwill
impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with
its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount
of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal
years beginning after December 15, 2019; early adoption is permitted. We currently anticipate that the adoption of ASU 2017-04
will not have a material impact on our financial statements.
In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation:
Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment
awarded require an entity to apply modification accounting. ASU 2017-09 is effective for interim and annual reporting periods beginning
after December 15, 2017, with early adoption permitted. The amendments in ASU 2017-09 are to be applied prospectively to an award
modified on or after the adoption date; consequently, the impact will be dependent on whether we modify any share-based payment
awards and the nature of such modifications. The adoption of this standard is not expected to have a material impact on our financial
statements.
NOTE D—SEGMENT REPORTING
The Company follows the guidance set forth
by section 280-10 of the FASB Accounting Standards Codification for reporting and disclosure on operating segments of the Company.
It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined
that it did not have any separately reportable operating segments as of March 31, 2018 and March 31, 2017.
NOTE E—CAPITAL STOCK
The Company is authorized to issue 1,000,000,000
Common Shares at $.0001 par value per share.
In March 2016, the Company issued the following
shares:
181,600 shares were purchased under a public
offering for $.50 per share for a total of $90,800.
In April 2016, the Company issued the following
shares:
70,900 shares were purchased under the public
offering for $.50 per share for a total of $35,450.
In June 2016, the Company issued the following
shares:
80,000 shares valued at
$.50 per share (total value is $40,000) as a part of the acquisition of Guuf gaming platform. Total platform purchase price was
$60,000.
1,600,000 shares were cancelled
as a part of the resignation of the Chief Operating Officer and Treasurer, Seth Ingram. The shares were originally issued at par.
165,000 shares were issued
to 3 different consultants at par for a total of $16.
In July and August 2016, the Company issued
the following shares:
55,000 shares issued to
2 different consultants at par for a total of $5.50.
106,000 shares purchased
at $.50 per share for a total of $53,000 in a private offering. Each security consists of one share of common stock and two common
stock purchase warrants, one of which entitles the holder to purchase one share of common stock at an exercise price of $0.25 per
share and one of which entitles the holder to purchase one share of common stock at an exercise price of $0.50 per share, in each
case at any time until the expiration of three years from the date of issuance. The stock purchase warrants (warrants) have been
valued using the Black Scholes Model. The “warrants” with an exercise price of $.25 have been valued at $.27 per share
for total of $28,620 and the “warrants” with an exercise price of $.50 have been valued at $.13 per share for a total
of $13,780. The total value of the warrants issued is $42,400. The Black Scholes valuation was based on the following assumptions:
a 3-year term, 40% volatility, and 3-year Treasury bill interest rate of .99%.
In October 2016, the Company issued the following
shares:
15,000 shares issued to
2 different consultants at par for a total of $1.50.
In May 2017, the Company issued the following
shares:
61,000 shares were purchased
at $.50 per share for a total of $30,500.
100,000 shares were issued to 2 different consultants
with a fair value per share of $.50. The total value of the services is $50,000.
In June 2017, the Company issued the following
shares:
5,000 shares of common
stock were issued to a consultant for services with a fair value per share of $.50. The total value of the services is $2,500.
In July 2017, the Company issued the following
shares:
40,000 shares of common
stock were issued to a consultant for services with a fair value per share of $.50. The total value of the services is $20,000.
NOTE E—CAPITAL STOCK—CONT’D
In August 2017, the Company issued the following
shares:
42,000 shares of common
stock were issued to a consultant for services with a fair value per share of $.50. The total value of the services is $21,000.
40,000 shares of common
stock were issued to a consultant for services with a fair value per share of $.50. The total value of the services is $20,000.
20,000 shares of common
stock were issued to a consultant for services with a fair value per share of $.50. The total value of the services is $10,000.
During the 3
rd
quarter ended September
30, 2017, Ventureo, LLC converted 54,100 Preferred Shares of stock into 541,000 common shares.
Total issued and outstanding shares of common
stock as of March 31, 2018 were 4,032,500 and as of December 31, 2017 were 4,032,500.
Total issued and outstanding shares of preferred
stock as of March 31, 2018 were 1,945,900 and as of December 31, 2017 were 1,945,900.
The Company is authorized to issue 10,000,000
Series A Cumulative, Convertible Preferred Shares (Preferred Stock) at $.0001 par value per share. During the period
from inception (March 24, 2015) through September 30, 2016, the Company issued 2,000,000 shares of preferred stock at $.05 per
share to Ventureo, LLC in exchange for $50,000 in cash and Apps with a fair market value of $50,000 for a total of $100,000. The
shares of “Preferred Stock” are convertible, at the option of the holder, into shares of common stock at a conversion
price of $0.005 per share. The holder of the “Preferred Stock” may not convert any portion of the “Preferred
Stock” if, after giving effect to such
conversion, the holder would beneficially own in excess of 4.99%, except that the holder may, by written notice to the Company,
increase or decrease this percentage up to a maximum of 9.99%, provided that any such increase will not be effective until the
61
st
day after such notice is delivered to the Company. Upon a liquidation event, the Company shall first pay to the
holders of the “Preferred Stock” an amount per share equal to the Original Issue Price (i.e., $0.05 per share
of Series A Preferred Stock), plus all accrued and unpaid dividends on each share of Series A Preferred Stock (the “Series
A Preference Amount”). After full payment of the liquidation preference amount to the holders of the “Preferred Stock”,
the Company will then distribute the remaining assets to holders of common stock, other junior preferred shares (if any) and the
“Preferred Stock” on an as-if-converted-basis. The Series A Preferred Stock ranks senior to the Company’s common
stock and senior to any other shares of preferred stock the Company may issue in the future.
Ventureo. LLC also paid $408 in expense incurred
on behalf of AppSoft, Inc. and this amount is considered an additional capital contribution.
Capital Contributions
Brian Kupchik, President and CEO made a capital
contribution of $1,350 in cash in October and November 2017 and $100 in cash in January 2018.
NOTE F—RELATED PARTY TRANSACTIONS
The Company has paid $18,740 and $15,000 in
management fees during 2017 and 2016, respectively (included in the Outside Services Expense line item on the Statement of Operations)
to Brian Kupchik, President and CEO.
NOTE G—OTHER ASSET/PHONE APPS AND
GAMING PLATFORM
Phone Apps
As a part of the Preferred Stock
transaction (refer to Note E above), the Company acquired Phone Apps valued at $50,000. These Phone Apps are generating Sales
Revenue. The Company will amortize the Phone Apps over 5 years. Management has determined that 5 years is a relatively short
period. Monthly amortization is $833.34. Accumulated Amortization as of March 31, 2018 is $27,500. Amortization for Phone
Apps for the periods ended March 31, 2017 and 2018 was $2,500 and $2,500.
NOTE G—OTHER ASSET/PHONE APPS AND
GAMING PLATFORM—CONT’D
eSports Tournament Platform Assets
In June 2016, AppSoft Technologies, Inc.
(the “Company”) acquired certain assets comprising an eSports tournament platform for competitive gamers from
Guuf LLC (“Guuf”). The Company acquired the assets for a total purchase price of $60,000 (refer to Note J below).
On October 1, 2016, the Company began amortizing the Phone Apps over 5 years. Management has determined that 5 years is a
relatively short period. Monthly amortization is $1,000. Accumulated Amortization as of March 31, 2018 is $15,000.
Amortization for the eSports platform for the periods ended March 31, 2017 and 2018 was $3,000 and $3,000.
NOTE H—INCOME TAX
The Company provides for income taxes under
(now included under Accounting Standards Codification (ASC), 740), Accounting for Income Taxes. ASC 740 requires the use of an
asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences
between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are
expected to reverse.
ASC 740 requires the reduction of deferred
tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all
the deferred tax assets will not be realized. For Federal income tax purposes, the Company has net operating loss carry forwards
that expire through 2030. The net operating loss carry forward as of March 31, 2018 is approximately $608,000 and as of March 31,
2017 is $345,000 approximately. The total deferred tax asset is approximately $127,000 and $72,000 for the periods March 31, 2018
and March 31, 2017, respectively.
No tax benefit has been reported in the financial
statements because after evaluating our own potential tax uncertainties, the Company has determined that there are no material
uncertain tax positions that have a greater than 50% likelihood of reversal if the Company were to be audited.
The Company is not obligated to pay State
Income Taxes because it is a Nevada corporation. The Company does not currently have any tax returns open for examination.
NOTE I—NOTES PAYABLE
The following demand Notes Payable were issued
in 2016, from an unrelated party and bear 2% interest per year:
Date Issued
|
|
Principal Amount
|
|
June 2016
|
|
$
|
5,000
|
|
July 2016
|
|
$
|
6,500
|
|
October 2016
|
|
$
|
9,800
|
|
November 2016
|
|
$
|
18,328
|
|
December 2016
|
|
$
|
1,000
|
|
Totals
|
|
$
|
40,628
|
|
The following demand Notes Payable were issued
during the 1
st
Quarter 2017, from an unrelated party and bear 2% interest per year:
Date Issued
|
|
Principal Amount
|
|
January 2017
|
|
$
|
2,200
|
|
February 2017
|
|
$
|
1,650
|
|
March 2017
|
|
$
|
850
|
|
March 2017
|
|
$
|
1,000
|
|
March 2017
|
|
$
|
1,200
|
|
Totals
|
|
$
|
6,900
|
|
NOTE I—NOTES PAYABLE—CONT’D
The following demand Notes Payable were issued
during the 2
nd
Quarter 2017, from an unrelated party and bear 2% interest per year:
Date Issued
|
|
Principal Amount
|
|
April 2017
|
|
$
|
3,000
|
|
May 2017
|
|
$
|
6,200
|
|
Totals
|
|
$
|
9,200
|
|
The following demand Notes Payable were issued
during the 3
rd
Quarter 2017, from an unrelated party and bear 2% interest per year:
Date Issued
|
|
Principal Amount
|
|
August 2017
|
|
$
|
8,750
|
|
August 2017
|
|
$
|
1,230
|
|
August 2017
|
|
$
|
12,000
|
|
August 2017
|
|
$
|
3,500
|
|
Totals
|
|
$
|
25,480
|
|
The following demand Note Payable were issued
during the 4
th
Quarter 2017, from an unrelated party and bear 2% interest per year:
Date Issued
|
|
Principal Amount
|
|
October 2017
|
|
$
|
8,000
|
|
Totals
|
|
$
|
8,000
|
|
The following demand Notes Payable were issued
during the 1
st
Quarter 2018, from an unrelated party and bear 2% interest per year:
Date Issued
|
|
Principal Amount
|
|
January 2018
|
|
$
|
1,000
|
|
February 2018
|
|
$
|
5,100
|
|
March 2018
|
|
$
|
2,082
|
|
March 2018
|
|
$
|
490
|
|
March 2018
|
|
$
|
250
|
|
Totals
|
|
$
|
8,922
|
|
Total Notes Payable outstanding was $99,131
as of March 31, 2018. Total accrued interest was $2,388 as of March 31, 2018.
The Company issued an 8% Convertible Note Payable
to a non-related party on May 5, 2017 in the amount of $10,000. This demand notes bears interest at 8% per year. The Holder of
the Note Payable has may elect to convert the Note Payable into 20,000 shares of stock at $.50 per share in full payment of the
$10,000 Note Payable amount outstanding.
NOTE J—ASSET ACQUISITIONS
Acquisition of eSports Tournament Platform
Assets
On September 10, 2016, AppSoft Technologies,
Inc. (the “Company”) acquired certain assets comprising an eSports tournament platform for competitive gamers from
Guuf LLC (“Guuf”). The Company acquired the assets for a total purchase price of $60,000 consisting of (i) $15,000
in cash, which has been paid, (ii) 80,000 shares of common stock valued at $0.50 per share (the price at which the Company sold
shares to its initial public offering completed in March 2016); (iii) $5,000 in cash payable due which is included in the Company’s
Accounts Payable; and (iv) the grant of a royalty equal to 5% of the first calendar year’s profits generated by the Company
from the assets, a royalty equal to 4% of year two profits and royalty equal to 3% of year three profits. As additional consideration
for the assets, the Company entered into consulting agreement with Nathan Cavanaugh, the sole member of Guuf, as described below.
NOTE J—ASSET ACQUISITIONS—CONT’D
The assets consist of the following:
|
·
|
title to registered or unregistered trademarks and
trade names;
|
|
·
|
web platform, files, source code and object code;
|
|
·
|
branding and marketing collateral;
|
|
·
|
prototyped design files of Guuf’s mobile application
for iOS;
|
|
·
|
web development of new Guuf features, including free
play modes and mobile gaming tournaments;
|
|
·
|
strategic development of Guuf’s user achievements
list and ranking and leaderboard system calculations; and
|
|
·
|
sourcing of development for new Guuf features including
automated score reporting, API, mobile application for iOS, user achievements, ranking and leaderboard systems, and live streaming.
|
Acquisition of Mobile App Assets
On June 10, 2016, the Company acquired by assignment
from Marc Seal certain concepts, artwork, story lines and related computer software in connection with a computer game titled “CryptoGene,”
for mobile application (the “Assigned Property”), including:
|
(i)
|
Complete “CryptoGene” intellectual property
(Any active and applicable trademarks, copyrights, patents, works, etc.)
|
|
(ii)
|
CryptoGene website (www.CryptoGene.com)
|
|
(iii)
|
CryptoGene software (Video Game for mobile and computer
platforms)
|
|
(iv)
|
CryptoGene: Origins (Work in Progress 50 Page Graphic Novel)
|
|
(v)
|
CryptoGene Short Story (Work in Progress 10 Page Graphic
Novel)
|
The
assignment includes all of Mr. Seal’s right and interest in and to the intellectual property, including any right to use
or disseminate CryptoGene as a mobile application or in any other medium (including all other audio-visual rights, print and allied
and
incidental
rights), all advertising, publication, and promotion rights with respect to any part of CryptoGene or any adaptation or version
thereof, and all merchandising, commercial tie-in, publishing, and exploitation rights.
NOTE
K—FIXED ASSETS
In
July 2016, the Company purchased computer equipment for $2,079. The computer equipment will be depreciated over its estimated
useful life of 5 years. Annual depreciation is $415. Depreciation expense was $104 and $104 for the quarter ended March 31, 2018
and March 31, 2017, respectively.
NOTE
L—MATERIAL EVENTS
Departure
of Directors or Certain Officers; Election of Directors:
On
June 10, 2016, Seth Ingram resigned as a member of the board of directors. Mr. Ingram’s resignation was for personal reasons
and not a result of a disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.
Upon his resignation, Mr. Ingram returned to the Company for cancellation 1.6 million of the 2 million shares of common stock
registered in his name.
NOTE
L—MATERIAL EVENTS—CONT’D
FINRA
During
July 2017, the Company’s common stock was admitted to quotation in the OTC Bulletin Board Market (“OTCBB”),
an interdealer quotation service for over-the-counter, or OTC, equity securities operated the Financial Regulatory Authority (“FINRA”),
which permits to be eligible for quotation on OTCBB any OTC equity security that is current in certain required regulatory filings.
Consulting
Agreement Amendments
During
the 3
rd
Quarter 2017, the Company entered into the following agreements:
|
·
|
Amendment
to Consulting Agreement between the Company and Marc Seal dated August 3, 2017 whereby the parties amended the original consulting
agreement to increase the scope of engineering and technical services to be rendered by Mr. Seal in consideration of the issuance
of 42,000 shares of common stock.
|
|
·
|
Amendment to Consulting Agreement between the Company
and Kris Newman dated July 12, 2017 whereby the parties amended the original consulting agreement to increase the scope of marketing
services to be rendered by Mr. Newman in consideration of the issuance of 40,000 shares of common stock.
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·
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Amendment to Consulting Agreement between the Company
and Joseph Cheng dated August 3, 2017 whereby the parties amended the original consulting agreement to increase the scope of product
analysis services to be rendered by Mr. Cheng in consideration of the issuance of 40,000 shares of common stock.
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whereby the parties amended the original consulting
agreement to increase the scope of product analysis services to be rendered by Mr. Cheng in consideration of the issuance of 20,000
shares of common stock.
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NOTE M—SUBSEQUENT EVENTS
Since the close of the period covered by the
financial statements of which these notes form a part, the following material transactions have occurred:
In April and May 2018, the Company borrowed
an aggregate of $5,400 which borrowings are evidenced by promissory notes. The promissory notes bear interest at the rate of 8%
per annum and is payable on December 1, 2018.
During April 2018, the Company sold 5,714 common
shares of stock ($.0001 par value per share) for $1.05 per share and received $5,999.70 in cash.