Notes to Financial Statements
(Unaudited)
NOTE 1 - ORGANIZATION
Cyberfort Software, Inc. (formerly known as Patriot Berry Farms, Inc.) (Cyberfort or “The “Company”) was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc. On September 26, 2016, the board of directors and the majority shareholders of the Patriot Berry Farms, Inc. approved an amendment to the Articles of Incorporation of the Company to change its name from Patriot Berry Farms, Inc. to Cyberfort Software, Inc. Cyberfort is in the business of developing, marketing, and acquiring software security technology.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
Interim Accounting
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended December 31, 2017, are not necessarily indicative of the results that may be expected for the year ended March 31, 2018.
The Company's 10-K for the year ended March 31, 2017, filed on January 26, 2018, should be read in conjunction with this Report.
USE OF ESTIMATES
The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with original maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
Cyberfort Software, Inc
Notes to Financial Statements
(Unaudited)
INCOME TAXES
The Company accounts for income taxes under FASB ASC 740
"Income Taxes."
Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50
"Equity - Based Payments to Non-Employees."
Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (
a
) the goods or services received; or (
b
) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.
NET INCOME OR (LOSS) PER SHARE OF COMMON STOCK
The Company has adopted ASC 260
“Earnings per Share,”
(“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
RECLASSIFICATION
For comparability, certain prior year amounts have been reclassified, where appropriate, to conform to the financial statement presentation used in December 2017. The reclassifications have no impact on net loss.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of December 31, 2017 and March 31, 2017, the Company has an accumulated deficit of $4,075,341 and $3,918,548, respectively. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.
The ability of the Company to continue its operations is dependent upon, among other things, obtaining additional financing. In response to this and other potential problems, management intends to raise additional funds through public or private placement offerings. 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.
NOTE 4 - INTANGIBLE ASSETS
On September 20, 2016, the Company entered into an Assignment Agreement with Ferlin Corp. to assume a Purchase and Sale Agreement between Ferlin Corp and Mistrin Pty, Ltd. that results in the Company effectively purchasing the title, rights, and interest to a software application, (including the source code) in exchange for various consideration. Under the Assignment and the assumed Purchase and Sale Agreement with Mistrin, the Company has assumed a Note Payable to Mistrin for $150,000, will issue 10,688,588 shares of common stock, valued at $0.085 per share, to the seller, assignor, and various individuals, and received $40,000. Consequently, the Company has recorded intangible property related to the transaction of $1,018,530. The Company has not fully issued all the required shares of common stock at this time. They will issue the shares as soon as practicable. However, the Company has treated all shares as issued and outstanding within these financial statement.
Per the Purchase and Sale Agreement, the Company was required to make payments totaling $150,000 related to the assumed Note Payable prior to March 31, 2017. This Note Payable is non-interest bearing. As of December 31, 2017, the Company has not made the required payments. Additionally, the Purchase and Sale Agreement obligates the Company to hire several identified individuals, fund $10,000 of marketing and development cost per month, and migrate the acquired technology into an Enterprise Class security software product prior to being able to begin the effort of generating revenue. The Company has not complied with any of the above obligations and is in Material Breach of the Purchase and Sale Agreement.
The Company is in negotiations with the Assignor and Seller to amend the various agreements to enable the Company to raise additional funds in order for the Company to accomplish the execution of its current business plan. There are no guarantees that the Company will be able to renegotiate the agreements, raise the required funds, or successfully execute its business plan.
Consequently, the Company determined that the acquired intangible property’s value was impaired as of September 30, 2016, due to the material breach and significant uncertainties related to its business plan and has written off the entire value of the intangible property at that date.
Cyberfort Software, Inc
Notes to Financial Statements
(Unaudited)
NOTE 5 - RELATED PARTY ADVANCES
In December 2014, the Company’s President advanced $10,000 to pay the settlement of the outstanding balance of consulting agreement on behalf of the Company. In July 2016, the Company’s President advanced $29,000 to pay the accounts payables on behalf of the Company. These advances were non-interest bearing, due upon demand and unsecured.
On July 29, 2016, the Company issued 390,000 shares of Company’s common stock to its current President to reimburse $39,000 paid on behalf of the Company.
On September 25, 2017, the Company’s CEO advanced $525 to the Company. The advance is due on-demand and is non-interest bearing.
On October 24, 2017, the Company’s CEO advanced $1,000 to the Company. The advance is due on-demand and is non-interest bearing.
NOTE 6 – NOTES PAYABLE
The Company assumed a non-interest bearing Note Payable of $150,000 with a maturity date of March 18, 2017 as a part of the acquisition of the Vivio App in September 2016. As of December 31, 2017, the Company has not made any payments on this Note and is in default. The Company is negotiating with the Note holder to amend the Note’s terms.
On October 4, 2017, the Company entered into a convertible loan agreement for $12,500 with an interest rate of 8% per annum and a maturity date of October 3, 2018. The loan is convertible into the Company’s common stock at the market value on the date of conversion.
On November 10, 2017, the Company entered into a convertible loan agreement for $5,466 with an interest rate of 8% per annum and a maturity date of November 9, 2018. The loan is convertible into the Company’s common stock at the market value on the date of conversion.
On November 24, 2017, the Company entered into a convertible loan agreement for $1,700 with an interest of 8% per annum and a maturity date of November 23, 2018. The loan is convertible into the Company’s common stock at the market value on at the date of conversion.
On December 14, 2017, the Company entered into a convertible loan agreement for $13,300 with an interest rate of 8% per annum and a maturity date of December 13, 2018. The loan is convertible into the Company’s common stock at the market value on the date of conversion.
NOTE 7 - STOCKHOLDERS’ EQUITY (DEFICIT)
On July 25, 2016, the Company issued 1,000,000 shares of its common stock to its current President, par value $0.001 per share, for the service rendered. 500,000 shares of common stock have been valued at $0.50 per share for the year ended March 31, 2015 and 500,000 shares of common stock have been valued at $0.10 per share for the year ended March 31, 2016. The stock based compensation expenses were recognized over the service period.
On July 29, 2016, the Company issued 290,000 shares of Company’s common stock to its current President as reimburse $29,000 paid on behalf of the Company.
On July 29, 2016, the Company issued 100,000 shares of Company’s common stock to its current President, in consideration to reimburse $10,000 settlement payment that was advanced by its current President on behalf of the Company in December 2014.
Cyberfort Software, Inc
Notes to Financial Statements
(Unaudited)
On September 20, 2016, the Company issued 1,970,588 shares of its common stock, par value $0.001, to Ferlin Corp for Assignment of the Purchase and Sale Agreement and $40,000 cash as further discussed in Note 4 - Intangible Assets. The Company has not fully issued all the required shares of common stock at this time. They will issue the shares as soon as practicable. However, the Company has treated all shares as issued and outstanding within these financial statement.
On September 27, 2016, the Company issued 8,718,000 shares of its common stock at a value of $0.085 per share as further discussed in Note 4 - Intangible Assets. The Company has not fully issued all the required shares of common stock at this time. They will issue the shares as soon as practicable. However, the Company has treated all shares as issued and outstanding within these financial statement.
On October 27, 2016, the Company issued 86,928 shares of its common stock for cash proceeds of $10,000.
On November 3, 2016, the Company issued 106,684 shares of its common stock for cash proceeds of $10,000.
On November 17, 2016, the Company issued 87,840 shares of its common stock for cash proceeds of $10,000.
The Company has received cash capital contributions of $66,200 under Subscription Agreements to issue 363,885 shares of common stock; however, as of December 31, 2017, the Agreements have not been executed by the investors and the common stock has not been issued.
Under the employment agreement with the CEO, the Company is required to grant shares of restricted stock after each anniversary date. At December 31, 2017 and March 31, 2017, the company has accrued a stock payable for shares earned but not issued of $87,500 and $50,000, respectively. The number of shares will be determined based upon market value of the stock at the point in time of issuance.
NOTE 8 - COMMITMENTS
On September 28, 2016, the Company entered into four consulting agreements with consultants to act in the role of Technology Development Manager, Chief Technology Officer, Corporate Development Officer, and Advisory Director and to provide consulting services as part of the Purchase and Sale Agreement with Mistrin (See Note 4). The term of the agreements shall be one year and shall be a rolling contract until terminated or extended. The Company shall issue each consultant a total of 200,000 shares of common stock per annum to a total of 800,000 shares per annum. The consulting agreements can be terminated after 90 days by either party for any reason and the consultant is entitled to receive the entire consideration.
The Company has reflected its issuance of all committed shares related to the consulting agreements as part of the consideration paid pursuant to the Purchase and Sale Agreement with Mistrin (See Note 4).
NOTE 9 – SUBSEQUENT EVENTS
On January 24, 2018, the Company entered into a convertible loan agreement for $3,000 with an interest rate of 8% per annum and a maturity date of January 23, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.
On February 13, 2018, the Company entered into a convertible loan agreement for $11,000 with an interest rate of 8% per annum and a maturity date of February 12, 2019. The loan is convertible into the Company’s common stock at the FMV at the date of conversion.