ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
RMD Entertainment Group, Inc.
Balance Sheets
As of March 31, 2019 and December
31, 2018
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Prepaid expenses
|
|
$
|
4,583
|
|
|
$
|
833
|
|
Total current assets
|
|
|
4,583
|
|
|
|
833
|
|
Total assets
|
|
$
|
4,583
|
|
|
$
|
833
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
12,900
|
|
|
$
|
–
|
|
Due to shareholders
|
|
|
55,070
|
|
|
|
46,982
|
|
Convertible note payable – shareholder
|
|
|
50,000
|
|
|
|
50,000
|
|
Total current liabilities
|
|
|
117,970
|
|
|
|
96,982
|
|
Total liabilities
|
|
|
117,970
|
|
|
|
96,982
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit
|
|
|
|
|
|
|
|
|
Convertible Preferred stock, $0.001 par value, 1,000,000 share authorized issued and outstanding
|
|
|
1,000
|
|
|
|
1,000
|
|
Common stock, $0.00001 par value; 9,888,000,000 shares authorized; 9,885,028 shares issued and outstanding as of March
31, 2019 and December 31, 2018 and outstanding
|
|
|
99
|
|
|
|
99
|
|
Additional paid-in capital
|
|
|
2,013,242
|
|
|
|
2,013,242
|
|
Accumulated deficit
|
|
|
(2,127,728
|
)
|
|
|
(2,110,490
|
)
|
Total stockholders’ deficit
|
|
|
(113,387
|
)
|
|
|
(96,149
|
)
|
Total liabilities and stockholders’ deficit
|
|
$
|
4,583
|
|
|
|
833
|
|
See accompanying notes to
financial statements.
RMD Entertainment Group, Inc.
Statements of Operations
For the Three Months Ended
March 31, 2019 and 2018
|
|
Three Months Ended March 31, 2019
|
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
Cost of Sales
|
|
|
–
|
|
|
|
–
|
|
Gross Profit
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
Professional fees
|
|
|
14,900
|
|
|
|
–
|
|
General & administrative expenses
|
|
|
2,338
|
|
|
|
1,347
|
|
Total operating expenses
|
|
|
17,238
|
|
|
|
1,347
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(17,238
|
)
|
|
|
(1,347
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
Debt forgiven
|
|
|
–
|
|
|
|
–
|
|
Interest expenses
|
|
|
–
|
|
|
|
–
|
|
Total other income (expenses)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(17,238
|
)
|
|
$
|
(1,347
|
)
|
|
|
|
|
|
|
|
|
|
Weighted and diluted average shares outstanding
|
|
|
9,885,028
|
|
|
|
9,885,028
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income (loss) per share
|
|
$
|
–
|
|
|
$
|
–
|
|
See accompanying notes to
financial statements.
RMD Entertainment Group, Inc.
Statements of Stockholders’
Deficit
For Three Months Ended March 31, 2019
|
|
Preferred Stock
|
|
|
Common Stock
|
|
|
Additional Paid in
|
|
|
Accumulated
|
|
|
Total Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
Balance
January 1, 2018
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
9,885,028
|
|
|
$
|
99
|
|
|
$
|
2,013,242
|
|
|
$
|
(2,071,341
|
)
|
|
$
|
(57,000
|
)
|
Stock issuance for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
0
|
|
|
|
(39,149
|
)
|
|
|
(39,149
|
)
|
Balance December 31, 2018
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
9,885,028
|
|
|
|
99
|
|
|
|
2,013,242
|
|
|
|
(2,110,490
|
)
|
|
|
(96,149
|
)
|
Stock issuance for services
|
|
|
|
|
|
|
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
–
|
|
Net income
(loss)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(17,238
|
)
|
|
|
(17,238
|
)
|
Balance
March 31, 2019
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
9,885,028
|
|
|
$
|
99
|
|
|
$
|
2,013,242
|
|
|
$
|
(2,127,728
|
)
|
|
$
|
(113,387
|
)
|
See accompanying notes to
financial statements.
RMD Entertainment Group, Inc.
Statements of Cash Flow
For the Three Months Ended March 31,
2019 and 2018
|
|
2019
|
|
|
2018
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(17,238
|
)
|
|
$
|
(1,347
|
)
|
Debt forgiven
|
|
|
–
|
|
|
|
–
|
|
Stock issuance
|
|
|
–
|
|
|
|
–
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
12,900
|
|
|
|
–
|
|
Prepaid expenses
|
|
|
(3,750
|
)
|
|
|
(4,583
|
)
|
Due to shareholders
|
|
|
8,088
|
|
|
|
5,930
|
|
Net cash provided by (used in) operating activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
–
|
|
|
|
–
|
|
Net cash provided by (used in) investing activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
–
|
|
|
|
–
|
|
Cash and cash equivalents, beginning of period
|
|
|
–
|
|
|
|
–
|
|
Cash and cash equivalents, end of period
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
–
|
|
|
$
|
–
|
|
See accompanying notes to
financial statements.
RMD Entertainment Group, Inc.
Notes to
Financial Statements
NOTE 1 - NATURE OF BUSINESS
ORGANIZATION
RMD Entertainment Group,
Inc. (“RMD”, or the “Company”) was originally formed on August 22, 2000 as a Nevada corporation. On June
30, 2017, the Company re-domiciled as a Delaware Corporation. Now a non-operating holding company, historically the company has
been involved in investment in gaming and vending businesses, with a primary focus on the entertainment, travel and leisure industries.
Current management acquired control of the Company through purchase of preferred shares of the Company on October 13, 2017, which
gives current management a majority of the voting power of the outstanding stock of the Company. The Company is in the process
of identifying operating businesses that are potential candidates for acquisition.
NOTE 2 –
BASIC PRESENTATION
Interim financial
statements
The unaudited interim financial
statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the
“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all
adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation
of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial
statements of the Company for the year ended December 31, 2018 and notes thereto included in the Company’s Form 10. The Company
follows the same accounting policies it used in the Company’s Form 10 in the preparation of this interim report. Results
of operations for the interim period are not indicative of annual results.
Recent Accounting Pronouncements
In June 2018, the FASB issued
Accounting Standards Update (“ASU”) ASU 2018-07,
Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based
Payment Accounting
, which simplifies the accounting for share-based payments granted to nonemployees for goods and services,
and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees.
ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The Company adopted this ASU on January 1, 2019 with
no material impact on the Company’s financial statements.
In August 2018, the SEC issued
Release No. 33-10532 that amends and clarifies certain financial reporting requirements. The principal change to our financial
reporting will be the application of the disclosure requirement of changes in stockholders’ equity in Rule 3-04 of Regulation
S-X to interim periods. The Company adopted this new rule beginning its financial reporting for the quarter ended March 31, 2019.
Upon the adoption of this rule, the Company will include the Statements of Stockholders’ Deficit with each interim reporting.
NOTE 3 – CONVERTIBLE
NOTE PAYABLE – Related Party
The
convertible note payable as of March 31, 2019 and December 31, 2018 consisted of one non-interest bearing note payable due on demand
and convertible at the option of the holder into common shares at the conversion price of $0.001 per share. The note, originally
dated February 24, 2014 and amended on October 1, 2017 was initially held by a third-party creditor of the Company. Under the original
February 24, 2014 Note, the principal amount of indebtedness was $115,000. On October 1, 2017, the third-party creditor agreed
to forgive $65,000 in indebtedness and the balance of the Convertible Note became $50,000 as a result. On October 11, 2017, the
note was sold to Mr. Seng Yeap Kok for a purchase price of $5,000. As of July 8, 2019, no amount of the principal has been repaid
and the balance of the Convertible Note remains $50,000.
NOTE 4 - EQUITY
The Company is authorized
to issue 5,000,000 shares of convertible preferred stock with a par value of $0.0001. As of December 31, 2018 and 2017, the number
of issued and outstanding shares of Series A preferred stock was 1,000,000. The 1,000,000 shares of Series A preferred stock are
convertible at a rate of 1:15,000 into common stock, and
each outstanding share of the Series A preferred
stock has the right to one vote for each share of common stock into which such preferred stock could then be converted
.
The holders of Series A preferred stock have no preemptive rights to purchase, subscribe for, or otherwise acquire stock of any
class of the Company.
Due to the limit of the
number of shares of common stock authorized, there was a limited number of share available for the conversion. As of December 31,
2018 and 2017, the limited numbers of shares were 2,971,816 and 122,971,816, respectively.
During 2017, the Company
issued 120,000,000 shares of common stock, which were valued at $1,200, as compensation for the Company’s CEO at the time.
On
January 28, 2019, the Board approved and filed the amendment for a reverse common stock split at a ratio of 1,000:1. The par value
of the common shares remains at $0.00001 per share.
The Company is authorized to
issue 9,888,000,000 shares common stock with a par value of $0.00001 per share. As of March 31, 2019 and December 31, 2018, the
number of issued and outstanding shares of common stock was 9,885,028.
NOTE 5 – PRIOR PERIOD
ADJUSTMENTS
As indicated in
Note 4,
On January 28, 2019, the Board approved and filed the amendment for a reverse common
stock split at a ratio of 1,000:1. The par value of the common shares remains at $0.00001 per share. For comparative financial
statements, we have adjusted the prior period presentation in equity section on the balance sheet and statement of shareholders’
deficits. The following illustrates the presentations before and after the adjustments:
|
|
Before
|
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued and outstanding
|
|
|
9,885,028,189
|
|
|
|
1,000 : 1 split
|
|
|
|
9,885,028
|
|
Common stock
|
|
|
98,850
|
|
|
|
(98,751
|
)
|
|
|
99
|
|
Additional paid-in capital
|
|
|
1,914,491
|
|
|
|
98,751
|
|
|
|
2,013,242
|
|
NOTE 6 – RELATED
PARTIES TRANSACTIONS
During
the normal course of business, the Company has some transactions with its related parties. During the three months ended March
31, 2019 and 2018, the major shareholder paid $8,088 and $5,930 for the Company expenses, respectively.
NOTE 7 - SUBSEQUENT EVENTS
Management has evaluated
subsequent events through the date of filing the financial statements with the Securities and Exchange Commission, the date the
financial statements were available to be issued. Management is not aware of any significant events that occurred subsequent to
the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
You
should read this discussion together with the Financial Statements, related Notes and other financial information included elsewhere
in this Form 10. The following discussion contains assumptions, estimates and other forward-looking statements that involve
a number of risks and uncertainties, including those discussed under “Risk Factors,” and elsewhere in this Form 10.
These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.
This discussion is intended to further
the reader’s understanding of the Company’s financial condition and results of operations and should be read in conjunction
with the Company’s financial statements and related notes included elsewhere herein. This discussion also contains forward-looking
statements. The Company’s actual results could differ materially from those anticipated in these forward-looking statements
as a result of the risks and uncertainties set forth elsewhere in this Annual Report and in the Company’s other SEC filings.
Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The
Company is not party to any transactions that would be considered “off balance sheet” pursuant to disclosure requirements
under Item 303(c) of Regulation S-K.
Overview
The Company is a non-operating holding
company. Historically, the Company has been involved and invested in gaming and vending businesses, the focus of which was on the
entertainment, travel and leisure industries. Current management acquired control of the Company through purchase of preferred
shares on October 13, 2017 and is in the process of identifying operating businesses that are potential candidates for acquisition.
Critical Accounting Policies
The relevant accounting policies are listed
below.
Basis of Accounting
The basis is United States generally accepted
accounting principles.
Cash and Cash Equivalents
The Company considers all short-term investments
with a maturity of three months or less at the date of purchase to be cash and cash equivalents.
Use of Estimates
In preparing financial statements in conformity
with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and revenues and expenses during the reported period. Actual results could differ from those estimates.
Advertising
Advertising costs are expensed when incurred.
The Company incurred $0 of sales and marketing expenses, including advertising, for the three months ended March 31, 2019
and 2018.
Comprehensive Income (Loss)
Net income (loss) is equal to comprehensive
income (loss).
Income Taxes
The Company maintains deferred tax assets
that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. These deferred tax assets consist of net operating loss carry
forwards. The net deferred tax asset has been fully offset by a valuation allowance because of the Company’s history of losses.
Utilization of operating losses and credits may be subject to substantial annual limitation due to ownership change provisions
of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration
of net operating losses and credits before utilization.
Due to our lack of revenues, we have not
incurred any tax obligations for the three ended March 31, 2019. However, we would anticipate that income tax obligations will
arise as we begin to generate significant revenue in the future.
The Company did not identify any material
uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits.
The federal income tax returns of the Company
are subject to examination by the IRS generally for three years after they file.
Year end
The Company’s fiscal year-end is
December 31.
Recent Accounting Pronouncements
We have reviewed all the recently issued,
but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact
on the Company.
In August 2018, the SEC issued Release
No. 33-10532 that amends and clarifies certain financial reporting requirements. The principal change to our financial reporting
will be the inclusion of the annual disclosure requirement of changes in stockholders’ equity in Rule 3-04 of Regulation
S-X to interim periods. We adopted this new rule beginning with its financial reporting for the quarter ending March 31, 2019.
Upon adoption, the Company will include its Statements of Stockholders’ Deficit with each interim reporting.
In June 2018, the FASB issued Accounting
Standards Update (“ASU”) ASU 2018-07,
Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting
, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns
most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU
2018-07 is effective on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact of
this ASU on its financial statements.
In March 2016, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation – Stock
Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance changes how companies account
for certain aspects of share-based payments to employees. Among other things, under the new guidance, companies will no longer
record excess tax benefits and certain tax deficiencies in additional paid-in-capital (“APIC”), but will instead record
such items as income tax expense or benefit in the income statement, and APIC pools will be eliminated. Companies will apply this
guidance prospectively. Another component of the new guidance allows companies to make an accounting policy election for the impact
of forfeitures on the recognition of expense for share-based payment awards, whereby forfeitures can be estimated, as required
today, or recognized when they occur. If elected, the change to recognize forfeitures when they occur needs to be adopted using
a modified retrospective approach. All of the guidance will be effective for the Company in the fiscal year beginning October 1,
2017. Early adoption is permitted. The Company is currently evaluating the impact of this guidance, if any, on its financial statements
and related disclosures.
In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842), which issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes
the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets
for all leases with lease terms of more than 12 months. It also changes the definition of a lease and expands the disclosure requirements
of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the
Company in the fiscal year beginning October 1, 2019.
Early adoption is permitted. The Company
is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures. In July 2015,
the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory.
The guidance requires an entity to measure
inventory at the lower of cost or net realizable value, which is the estimated selling prices in the ordinary course of business,
less reasonably predictable costs of completion, disposal, and transportation, rather than the lower of cost or market in the previous
guidance. This amendment applies to inventory that is measured using first-in, first-out (FIFO). This amendment is effective for
public entities for fiscal years beginning after December 15, 2016, including interim periods within those years. A reporting entity
should apply the amendments prospectively with earlier application permitted as of the beginning of an interim or annual reporting
period. The Company is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures.
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers (“ASU 2014- 09”), which requires an entity to recognize the amount of revenue
to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing
revenue recognition guidance in U.S. generally accepted accounting principles when it becomes effective. In July 2015, the FASB
deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt one year
earlier, commensurate with the original effective date. Accordingly, the standard will be effective for the Company in the fiscal
year beginning October 1, 2018, with an option to adopt the standard for the fiscal year beginning October 1, 2017. The Company
is currently evaluating this standard and has not yet selected a transition method or the effective date on which it plans to adopt
the standard. Nor has it determined the effect of the standard on its financial statements and related disclosures.
Results of Operations
Capitalization
The following table sets forth, as of March
31, 2019, the capitalization of RMD Entertainment Group on an actual basis. This table should be read in conjunction with the more
detailed financial statements and notes thereto included elsewhere herein.
In January 2019, the Company made a reverse split of the stock at 1,000:1 and as of March 31, 2019, the table shows as follows:
Common stock, $0.00001 par value; 9,885,028 shares issued and outstanding at March 31, 2019
|
|
$
|
99
|
|
Additional paid-in capital
|
|
|
2,013,242
|
|
Deficit accumulated during development stage
|
|
|
(2,127,728
|
)
|
|
|
|
|
|
Total stockholders’ equity (deficit)
|
|
$
|
(113,387
|
)
|
Results of Operations for the three
months ended March 31, 2019 and 2018
For the three months ended March 31, 2019
and 2018, we had no revenue.
Costs of revenue during these above same
periods were $0.
For the three months ended March 31, 2019
and 2018, professional and administrative expenses were $17,238 and $1,347, respectively. These costs were primarily the costs
for the daily operations and legal services.
For the three months ended March 31, 2019
and 2018, professional expenses were $14,900 and $0. The legal expenses in three months ended March 31, 2019 were mainly due to
SEC filing preparations.
For the three months ended March 31, 2019
and 2018, general and administrative expenses were $2,338 and $1,347. Costs incurred were primarily general and administrative
expenses.
Going Concern
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
liquidation of liabilities in the normal course of business. The Company currently has no operations and has a stockholders deficit
of $113,387 with an accumulated deficit of $2,127,728. The Company intends to find a merger target in the form of an operating
entity. The Company cannot be certain that it will be successful in this strategy.
These factors, among others, raise substantial
doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Summary of any product research and
development that we will perform for the term of our plan of operation
The Company is a shell company with no
operations and do not have specific products. Our research and development will depend on future merger with an operational company
or companies.
Expected purchase or sale of plant and
significant equipment
We do not anticipate the purchase or sale
of any plant or significant equipment; as such, items are not required by us at this time.
Significant changes in the number of
employees
As of March 31, 2019, we did not have any
paid employees. We are dependent upon our officers and directors for our future business development. As our operations expand,
we anticipate that we need to hire additional employees.
Liquidity and Capital Resources
As of March 31 2019, we had cash of approximately
$0.
A critical component of our operating plan
impacting our continued existence is our ability to obtain additional capital through additional equity and/or debt financing.
We have limited financial resources available,
which has had an adverse impact on our liquidity, activities and operations. These limitations have adversely affected our
ability to obtain certain projects and pursue additional business. Without realization of additional capital, it would be
unlikely for us to continue as a going concern. In order for us to remain a going concern, we will need to obtain additional capital.
Additional working capital may be sought through additional debt or equity private placements, additional notes payable to
banks or related parties (officers, directors or stockholders), from other funding sources at market rates of interest, or a combination
of these. The ability to raise necessary financing will depend on many factors, including the nature and prospects of any
business to be acquired and the economic and market conditions prevailing at the time financing is sought. No assurances can be
given that any necessary financing can be obtained on terms favorable to us, or at all.
As a result of our current cash status,
no officer or director received cash compensation through March 31, 2019.
Future funding could result in potentially
dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to
goodwill and other intangible assets, which could materially adversely affect our business, results of operations and financial
condition. Any future acquisitions of other businesses, technologies, services or products might require us to obtain additional
equity or debt financing, which might not be available on terms favorable to us, or at all, and such financing, if available, might
be dilutive.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies and Estimates
Revenue Recognition: We recognize
revenue from product sales when all of the following criteria for revenue recognition have been met: pervasive evidence that an
agreement exists; the services have been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and
collection of the amount due is reasonable assured.