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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2022

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Commission File No. 001-13126

 

FOMO CORP.

(Exact name of registrant as specified in its charter)

 

California   83-3889101

(State or other jurisdiction

of incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

1 E Erie St, Ste 525 Unit #2250, Chicago, IL 60611

(Address of principal executive offices)

(630) 286-9560

(Registrant’s telephone number, including area code)

 

n/a

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None   N/A   N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.) Yes ☐ No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “accelerated filer,” “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer ☐ Accelerated Filer ☐
Non-Accelerated Filer ☒ Smaller reporting company ☒
  Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

There were 8,185,213,242 shares of common stock, no par value, of the Registrant issued and outstanding as of August 12, 2022.

 

 

 

 
 

 

FOMO CORP.

 

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2022

 

TABLE OF CONTENTS

 

  PAGE
   
Part I. FINANCIAL INFORMATION:  
   
Item 1. Financial Statements: 3
   
Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 4
   
Consolidated Statements of Operations for the Three and Six Months June 30, 2022 and 2021 (unaudited) 5
   
Consolidated Statement of Stockholders’ Equity (Deficit) for the Three and Six Months ended June 30, 2022 and 2021 (unaudited) 6
   
Consolidated Statements of Cash Flows for the Six Months ended June, 2022 and 2021 (unaudited) 8
   
Notes to Consolidated Financial Statements (unaudited) 9
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 58
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 72
   
Item 4. Controls and Procedures 73
   
Part II. OTHER INFORMATION:  
   
Item 1. Legal Proceedings 74
   
Item 1A. Risk Factors 74
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 74
   
Item 3. Defaults Upon Senior Securities 74
   
Item 4. Mine Safety Disclosures 74
   
Item 5. Other Information 74
   
Item 6. Exhibits 74
   
SIGNATURES 75
   
EXHIBIT INDEX  

 

2

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

FOMO CORP.

 

INDEX TO FINANCIAL STATEMENTS

 

Consolidated Balance Sheets, June 30, 2022 (Unaudited) and December 31, 2021 4
   
Consolidated Statements of Operations for the Three and Six Months ended June 30, 2022 and 2021 (Unaudited) 5
   
Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Six Months ended June 30, 2022 and 2021 (Unaudited) 6
   
Consolidated Statements of Cash Flows for the Six Months ended June 30, 2022 and 2021 (Unaudited) 8
   
Notes to Consolidated Financial Statements (Unaudited) 9

 

3

 

 

FOMO CORP. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

    June 30, 2022     December 31, 2021  
    (Unaudited)        
             
Assets                
                 
Current Assets                
Cash   $ 233,688     $ 94,224  
Accounts receivable - net     1,270,215       36,790  
Loan receivable - related party     56,996       53,732  
Inventory - net     725,265       8,114  
Prepaids and other     8,741       223  
Total Current Assets     2,294,905       193,083  
               
Property and equipment - net     140,626       -  
                 
Operating lease - right-of-use asset     316,460       -  
                 
Goodwill     806,854       -  
                 
Investments     228,427       765,463  
                 
Total Assets   $ 3,787,272     $ 958,546  
                 
Liabilities and Stockholders’ Equity (Deficit)                
                 
Current Liabilities                
Accounts payable and accrued expenses   $ 946,358     $ 40,117  
Operating lease liability     60,472       -  
Convertible notes payable - net     546,353       89,305  
Convertible note payable - related party - net     162,755       -  
Loan payable - related parties     9,109       22,714  
Loans payable - other     204,608       -  
Deferred revenue     825,340       11,100  
Derivative liabilities     958,406       1,105,537  
Total Current Liabilities     3,713,401       1,268,773  
                 
Long Term Liabilities                
Operating lease liability     260,950       -  
Accounts receivable credit facility     732,432       -  
Total Long-Term Liabilities     993,382       -  
                 
Total Liabilities     4,706,783       1,268,773  
                 
Commitments and Contingencies (Note 10)     -        -   
                 
Stockholders’ Equity (Deficit)                
Preferred stock, Class A, $0.0001 par value, 1,000,000 shares designated, 5,750,000 and 5,750,000 shares issued and outstanding, respectively     575       575  
Preferred stock, Class B, $0.0001 par value, 7,000,000 shares designated, 6,839,982 and 5,249,982 shares issued and outstanding, respectively     684       525  
Preferred stock, Class C, $0.0001 par value, 2,000,000 shares designated, 1,000,000 and 1,000,000 shares issued and outstanding, respectively     100       100  
Common stock, no par value, 1,000,000,000 shares authorized 8,185,213,242 and 7,177,931,757 shares issued and outstanding, respectively     8,941,835       8,631,776  
Additional paid-in capital     13,185,477       11,301,942  
Accumulated deficit     (23,048,182 )     (20,245,145 )
Total Stockholders’ Equity (Deficit)     (919,511 )     (310,227 )
                 
Total Liabilities and Stockholders’ Equity (Deficit)   $ 3,787,272     $ 958,546  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

4

 

  

FOMO CORP. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

 

    2022     2021     2022     2021  
    For the Three Months Ended June 30,     For the Six Months Ended June 30,  
    2022     2021     2022     2021  
                         
Sales - net   $ 2,646,008     $ 84,661     $ 3,880,576     $ 256,863  
                                 
Cost of sales     2,440,520       65,286       3,509,160       197,506  
                                 
Gross profit     205,488       19,375       371,416       59,357  
                                 
General and administrative expenses     458,351       359,853       1,664,444       1,416,071  
                                 
Loss from operations     (252,863 )     (340,478 )     (1,293,028 )     (1,356,714 )
                                 
Other income (expense)                                
Interest expense     (198,776 )     -       (261,571 )     234,310  
Amortization of debt discount     (146,917 )     -       (352,692 )     -  
Change in fair value of derivative liabilities     (14,109 )     1,800,000       (16,825 )     424,626  
Derivative expense     (182,694 )     -       (194,887 )     -  
Gain on debt extinguishment (derivative liabilities - convertible debt)     -       -       100,693       -  
Gain (loss) on debt extinguishment     -       -       (205,691 )     (231,930 )
Change in fair value of marketable equity securities     (289,393 )     -       (579,036 )     -  
Gain on debt forgiveness     -       11,593       -       11,593  
Loss on investment     -       (288,406 )     -       (288,406 )
Total other income (expense) - net     (831,889 )     1,523,187       (1,510,009 )     150,193  
                                 
Net income (loss)   $ (1,084,752 )   $ 1,182,709     $ (2,803,037 )   $ (1,206,521 )
                                 
Income (loss) per share - basic and diluted   $ (0.00 )   $ 0.00     $ (0.00 )   $ (0.00 )
                                 
Weighted average number of shares - basic and diluted     8,105,085,037       5,578,818,213       7,776,910,177       5,653,234,527  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

5

 

 

FOMO Corp and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three and Six Months Ended June 30, 2022

(Unaudited)

 

    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Capital    - Deficit     (Deficit)  
    Preferred Stock - Class A     Preferred Stock - Class B     Preferred Stock - Class C     Common Stock    

Additional

Paid-in

     Accumulated    

Total

Stockholders’
Equity

  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Capital     Deficit     (Deficit)  
                                                                   
December 31, 2021     5,750,000     $ 575       5,249,982     $ 525       1,000,000     $ 100       7,177,931,757     $ 8,631,776     $ 11,301,942   -  $ (20,245,145 )   $ (310,227 )
                                                                                         
Issuance of stock in cashless exercise of warrants     -       -       -       -       -       -       437,500,000       -       -       -       -  
                                                                                         
Issuance of stock for services     -       -       650,000       65       -       -       -       -       534,935    -   -       535,000  
                                                                                         
Acquisition of Smart Solutions Technologies, Inc. - net of broker fees     -       -       1,000,000       100       -       -       -       -       699,900       -       700,000  
                                                                                         
Issuance of stock in conversion of debt and accrued interest     -       -       -       -       -       -       301,448,152       310,059       -       -       310,059  
                                                                                         
Conversion of Series B preferred stock into common stock     -       -       (60,000 )     (6 )     -       -       60,000,000       -       6       -       -  
                                                                                         
Warrants issued for services     -       -       -       -       -       -       -       -       209,713       -       209,713  
                                                                                         
Warrants issued for services - related party     -       -       -       -       -       -       -       -       13,981       -       13,981  
                                                                                         
Reclassification of financial instruments that ceased to be derivative liabilities (warrants)     -       -       -       -       -       -       -       -       325,000       -       325,000  
                                                                                         
Net loss     -       -       -       -       -       -       -       -       -    -   (1,718,285 )     (1,718,285 )
                                                                                         
March 31, 2022     5,750,000       575       6,839,982       684       1,000,000       100       7,976,879,909       8,941,835       13,085,477    -   (21,963,430 )     65,241  
                                                                                         
Issuance of stock in cashless exercise of warrants     -       -       -       -       -       -       208,333,333       -       -       -       -  
                                                                                         
Reclassification of financial instruments that ceased to be derivative liabilities (warrants)     -       -       -       -       -       -       -       -       100,000       -       100,000  
                                                                                         
Net loss     -       -       -       -       -       -       -       -       -    -   (1,084,752 )     (1,084,752 )
                                                                                         
June 30, 2022     5,750,000     $ 575       6,839,982     $ 684       1,000,000     $ 100       8,185,213,242     $ 8,941,835     $ 13,185,477    - $ (23,048,182 )   $ (919,511 )

 

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

6

 

 

FOMO Corp and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three and Six Months Ended June 30, 2021

(Unaudited)

 

    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Capital     Issuable     Deficit     (Deficit)  
    Preferred Stock - Class A     Preferred Stock - Class B     Preferred Stock - Class C     Common Stock     Additional Paid-in     Common Stock     Accumulated    

Total Stockholders’

Equity

  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Capital     Issuable     Deficit     (Deficit)  
                                                                         
December 31, 2020     3,000,000     $ 300       4,463,815     $ 446       1,000,000     $ 100       4,713,546,121     $ 4,232,960     $ 3,139,400     $ 125,000     $ (7,662,645 )   $ (164,439 )
                                                                                                 
Conversion of convertible debt     -       -       -       -       -       -       905,435,038       563,643       -       -       -       563,643  
                                                                                                 
Issuance of stock for services     -       -       -       -       -       -       6,550,000       99,640       -       -       -       99,640  
                                                                                                 
Stock issued for loan cost     -       -       -       -       -       -       10,000,000       20,000       -       -       -       20,000  
                                                                                                 
Issuance of stock for cash - common stock     -       -       -       -       -       -       65,000,000       250,000       -       -       -       250,000  
                                                                                                 
Issuance of stock for cash - class A preferred stock     2,750,000       275       -       -       -       -       -       -       274,725       -       -       275,000  
                                                                                                 
Issuance of stock for services     -       -       300,000       30       -       -       -       -       123,970       -       -       124,000  
                                                                                                 
Issuance of class B preferred stock as non-refundable deposit to acquire business     -       -       175,000       17       -       -       -       -       38,483       -       -       38,500  
                                                                                                 
Issuance of class B preferred stock to acquire assets     -       -       375,000       38       -       -       -       -       924,962       -       -       925,000  
                                                                                                 
Warrants issued for services     -       -       -       -       -       -       -       -       194,000       -       -       194,000  
                                                                                                 
Net loss     -       -       -       -       -       -       -       -       -               (2,389,230 )     (2,389,230 )
                                                                                                 
March 31, 2021     5,750,000       575       5,313,815       531       1,000,000       100       5,700,531,159       5,166,243       4,695,540       125,000       (10,051,875 )     (63,886 )
                                                                                                 
Issuance of stock for cash - common stock     -       -       -       -       -       -       75,000,000       176,000       -       -       -       176,000  
                                                                                                 
Net income     -       -       -       -       -       -       -       -       -               1,182,709       1,182,709  
                                                                                                 
June 30, 2021     5,750,000     $ 575       5,313,815     $ 531       1,000,000     $ 100       5,775,531,159     $ 5,342,243     $ 4,695,540     $ 125,000     $ (8,869,166 )   $ 1,294,823  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

7

 

 

FOMO CORP. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

    2022     2021  
    For the Six Months Ended June 30,  
    2022     2021  
Operating activities                
Net loss   $ (2,803,037 )   $ (1,206,521 )
Adjustments to reconcile net loss to net cash used in operations                
Stock based compensation     535,000       241,500  
Warrants issued for services     209,713       -  
Warrants issued for service - related party     13,981       -  
Amortization of debt discount     352,692       -  
Amortization of operating lease - right-of-use asset     28,769       -  
Depreciation and amortization expense     2,314       -  
Change in fair value of derivative liabilities     16,825       331,539  
Derivative expense     194,887       -  
Gain on debt extinguishment (derivative liabilities - convertible debt)     (100,693 )     -  
Loss on debt extinguishment     205,691       -  
Change in fair value of marketable equity securities     579,036       -  
Gain on debt forgiveness     -       (11,593 )
Changes in operating assets and liabilities                
(Increase) decrease in                
Accounts receivable     (625,304 )     (39,062 )
Inventory     727,473       (231,614 )
Prepaids and other     (8,518 )     (130,013 )
Increase (decrease) in                
Accounts payable and accrued expenses     113,830       (221 )
Customer deposits     -       127,158  
Deferred revenue     (26,397 )     -  
Operating lease liability     (23,807 )     -  
Net cash used in operating activities     (607,545 )     (918,827 )
                 
Investing activities                
Cash acquired in acquisition of Smart Solutions Technologies, Inc.     218,640       -  
Proceeds from sales of securities - net of purchases     (42,000 )     -  
Advance - loan receivable - related party     (3,264 )     -  
Net cash provided by investing activities     173,376       -  
                 
Financing investing                
Proceeds from loans payable     266,000       188,834  
Proceeds from loans payable - related party     -       -  
Proceeds from issuance of convertible notes     353,750       -  
Proceeds from issuance of convertible note - related party     195,000       -  
Repayment of loan receivable     -       (25,000 )
Repayments of notes payable - government - SBA     (150,000 )     -  
Repayments of loans payable - related parties     (213,678 )     -  
Repayment of loan payable     (61,392 )     -  
Repayment of notes payable     (516,234 )     -  
Repayment of convertible note - related party     (32,245 )     -  
Proceeds from draw downs on accounts receivable credit facility     3,774,456       -  
Repayment on accounts receivable credit facility     (3,042,024 )     -  
Proceeds from issuance of Class A preferred stock     -       275,000  
Proceeds from issuance of common stock     -       500,000  
Net cash provided by financing activities     573,633       938,834  
                 
Net increase (decrease) in cash     139,464       20,007  
                 
Cash - beginning of period     94,224       12,069  
                 
Cash - end of period   $ 233,688     $ 32,076  
                 
Supplemental disclosure of cash flow information                
Cash paid for interest   $ -     $ -  
Cash paid for income tax   $ -     $ -  
                 
Supplemental disclosure of non-cash investing and financing activities                
Right-of-use asset obtained in exchange for new operating lease liability   $

345,229

     $ -  
Acquisition of SST in exchange for Class B preferred stock   $ 700,000     $ -  
Conversion of accrued interest to note   $ 16,206          
Debt discount recorded in connection with derivative liability   $ 166,850     $ -  
Issuance of stock in conversion of debt and accrued interest   $ 104,368     $ 563,643  
Conversion of Class B preferred stock into common stock   $ 6     $ -  
Reclassification of financial instruments that ceased to be derivative liabilities (notes and warrants)   $ 425,000     $ -  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements

 

8

 

 

FOMO CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

UNAUDITED

 

Note 1 - Organization and Nature of Operations

 

Organization and Nature of Operations

 

FOMO Corp, Inc. (“FOMO,” “we,” “our” or “the Company”), is focused on the sale of its smart board technology as well as related installation services through its wholly-owned subsidiary SMARTSolution Technologies, L.P. (“SST”). Additionally, the Company markets and sells clean air disinfection products.

 

On May 18, 2021, FOMO incorporated FOMO ADVISORS LLC, a Wyoming limited liability company, as a wholly owned private merchant banking subsidiary. FOMO ADVISORS LLC intends to assist private companies in accessing the capital markets through “pass through” investments that allow investors to gain liquidity, while benefiting from direct exposure to private company growth through derivative instruments or other rights. The subsidiary is engaging with strategic targets to introduce them to its network of financial and strategic contacts, provide them management consulting, and create a portfolio of technology investments for future incubation, capital formation, and wealth creation. The Company is currently evaluating its corporate development pipeline and has identified a number of candidates for this capital formation model, though there can be no assurances. Currently, this entity is inactive.

 

On February 28, 2022, the Company acquired SST, see Note 9.

 

In June 2022, the Company applied with the State of California for a name change to FOMO Worldwide, Inc. The name change is being reviewed for approval.

 

The parent (FOMO CORP.) and subsidiaries are organized as follows:

Company Name   Incorporation Date   State of Incorporation  
FOMO CORP. (“FOMO” or the “Company”)     1990       California  
FOMO Advisors, LLC (“FOMOAD”)     2021       Wyoming  
SMARTSolution Technologies, L.P. (“SST”)     1995 1     Pennsylvania  
IAQ Technologies, LLC (“IAQ”)     2020 2     Pennsylvania  
Energy Intelligence Center, LLC of Wyoming (“EIC”)     2021 3     Wyoming  

 

1 The Company was acquired on February 28, 2022
2 The Company was acquired in 2020
3 The Company was formed in 2021

 

9

 

 

FOMO CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

UNAUDITED

 

IAQ Technologies, LLC

 

On October 19, 2020, the Company acquired 100% of the membership interests of Purge Virus, LLC in exchange for the issuance of 2,000,000 Series B Preferred Shares valued at $800,000 to its member. We subsequently changed the name of the company to IAQ Technologies LLC (“IAQ”). IAQ, which is based in Philadelphia, PA, is engaged in the marketing and sale of disinfection products and services to businesses, including hotels, hospitals, cruise ships, offices and government facilities, as well as to individuals. Products and services marketed by IAQ include:

 

  ● Ultraviolet-C in-duct and portable devices,
  ● Hybrid disinfection devices with UVC, carbon filtration and HEPA filtration,
  ● Hybrid disinfection devices with UVC and Photo Plasma,
  ● Bio-polar ionization disinfection for virus and Volatile Organic Compound disinfection; and
  ● PPE (personal protective equipment) ranging from masks to gloves with factory-direct supply side logistics.

 

Operating results for IAQ since its acquisition have not met expectations, Accordingly, the interim chief executive is in the process of reorganizing IAQ. Accordingly, we determined that IAQ’s value was impaired at December 31, 2021.

 

Independence Lighting LED, LLC and Energy Intelligence Center, LLC

 

On February 12, 2021, the Company purchased the assets of Independence LED Lighting, LLC (“iLED”), an affiliate of IAQ, in exchange for the issuance of 250,000 Series B Preferred Shares valued at $3.3 million, iLED is in the sale of clean air products intended for use in disinfecting and improving air quality.

 

On March 7, 2021, the Company purchased the assets of Energy Intelligence Center, LLC (“EIC PA”) in exchange for the issuance of 125,000 Series B Preferred Shares and 50,000,000 warrants valued at $1,479,121. EIC is engaged in the commercialization, marketing and licensing of software and hardware designed to work in conjunction with a commercial building’s HVAC system to reduce energy consumption and optimize operating efficiency.

 

Following the acquisitions of the assets of iLED and EIC, the Company combined the assets and businesses of iLED and EIC into a newly formed wholly-owned subsidiary, EIC of Wyoming LLC (“EIC Wyoming”).

 

10

 

 

FOMO CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

UNAUDITED

 

The Founder and Former Managing Member of IAQ, iLED and EIC stayed on following the asset acquisitions to run their businesses. However, in July 2021, he stepped down and assumed a consulting role and a new chief executive operating officer was hired to run the businesses of IAQ and EIC Wyoming. Such individual resigned from his position on March 2, 2022 and we then appointed an interim chief executive officer.

 

See Note 9.

 

SMARTSolution Technologies, L.P.

 

On February 28, 2022, FOMO closed the acquisition of the general and all the limited partnership interests of SMARTSolution Technologies L.P. (“SST”) pursuant to a Securities Purchase Agreement dated February 28, 2022 (the “SPA”), by and between the Company and Mitchell Schwartz (“Seller”), the beneficial owner of the general and limited partnership interests in SST. SST is a Pittsburgh, Pennsylvania–based audio/visual systems integration company that designs and builds presentation, teleconferencing and collaborative systems for businesses, educational institutions and other nonprofit organizations.

 

SST has been engaged in the EdTech business for over 25 years. SST markets its systems to and installs the systems in elementary, middle and high schools, as well as colleges, universities and commercial facilities. A current focus of SST’s business is the sale and installation of interactive smartboards to elementary, middle and high schools. These interactive smartboards provide students with interactive remote access from home or other locations to classrooms and teachers via personal computers, laptops, tablets and similar devices. SST currently markets its systems primarily in Western Pennsylvania, Eastern Ohio and West Virginia, is in the process of expanding into the Alabama and Michigan markets and plans to expand further throughout the United States as opportunities present itself organically or through strategic acquisitions.

 

As a result of the growth in remote learning, as a result of the COVID-19 pandemic and otherwise, and due to $500 billion in stimulus funding (“ESSER funds”) from the federal government, SST is currently experiencing a significant increase in orders and sales and a growth in backlog.

 

The interactive smartboards which form the key element of SST’s interactive systems are supplied by a single supplier in Canada, which is a subsidiary of a large multi-national company. SST believes that its relationship with its supplier is excellent, although there can be no assurance that if the relationship with the supplier was interrupted or otherwise adversely affected that an alternative source of supply at commercially reasonable cost would be available or that SST’s business would not be seriously harmed.

 

See note 9.

 

11

 

 

FOMO CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

UNAUDITED

 

Note 2 - Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

 

In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2022 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period.

 

These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on April 28, 2022.

 

Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented.

 

Principles of Consolidation