UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For
the quarterly period ended January 31, 2020
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission
file number: 001-36877
Lord
Global Corporation
(Exact
name of registrant as specified in its charter)
|
Nevada |
|
45-3942184 |
(State
or other jurisdiction of
incorporation or organization) |
|
(I.R.S.
Employer
Identification No.) |
|
318
N Carson St., Ste 208, Carson City, NV |
|
89701 |
|
(Address
of principal executive offices) |
|
(Zip
Code) |
(816)
304-2686
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(b) of the Act: None
Securities
registered under Section 12(g) of the Act: Common Stock, $0.001
par value
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes
[ ] No [X]
Indicate
by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes
[ ] No [X]
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 [X] 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 (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes [X] No
[ ]
Indicate
by check mark whether the Registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
|
Large
accelerated filer [ ] |
Accelerated
filer [ ] |
Smaller
reporting company [X] |
| Non-accelerated
filer [ ] |
|
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 Act). Yes [ ] No [X]
The
number of shares of Common Stock, $0.001 par value, outstanding on
March 20, 2020 was 50,889 shares.
LORD
GLOBAL CORPORATION
QUARTERLY
PERIOD ENDED JANUARY 31, 2020
Index
to Report on Form 10-Q
PART
I – FINANCIAL INFORMATION
Item 1. Financial
Statements.
LORD
GLOBAL CORPORATION
Consolidated
Balance Sheets
As
of January 31, 2020 and July 31, 2019
(Unaudited)
| |
|
January 31, 2020 |
|
|
July 31, 2019 |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current Assets |
|
|
|
|
|
|
|
|
| Cash |
|
$ |
687 |
|
|
$ |
485 |
|
| |
|
|
|
|
|
|
|
|
| Total
current assets |
|
|
687 |
|
|
|
485 |
|
| |
|
|
|
|
|
|
|
|
| Fixed Assets |
|
|
|
|
|
|
|
|
| Equipment,
net |
|
|
960 |
|
|
|
1,181 |
|
| Total
Fixed Assets |
|
|
960 |
|
|
|
1,181 |
|
| |
|
|
|
|
|
|
|
|
| Other Assets |
|
|
|
|
|
|
|
|
| Lord Global Goodwill |
|
|
14,440 |
|
|
|
- |
|
| Website Development |
|
|
5,500 |
|
|
|
5,500 |
|
| Accumulated
Amortization |
|
|
(5,500 |
) |
|
|
(5,500 |
) |
| Total Other
Assets |
|
|
14,440 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Total
Assets |
|
$ |
16,087 |
|
|
$ |
1,666 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
|
|
|
| Accounts Payable |
|
$ |
313,653 |
|
|
$ |
292,739 |
|
| Advance from shareholders |
|
|
152,886 |
|
|
|
75,135 |
|
| Accrued Interest |
|
|
90,131 |
|
|
|
88.640 |
|
| Convertible Debt (net of unamortized
discount) |
|
|
113,552 |
|
|
|
97,153 |
|
| Derivative Liability |
|
|
231,755 |
|
|
|
224,809 |
|
| Promissory note
- related party |
|
|
376,437 |
|
|
|
435,894 |
|
| Total current
liabilities |
|
|
1,278,414 |
|
|
|
1,214,370 |
|
| |
|
|
|
|
|
|
|
|
| Long term
liabilities |
|
|
|
|
|
|
|
|
| Convertible
Preferred Series A stock, $0.001 par value, 19,500,000 shares
authorized, 3,000 and 0 issued and outstanding as of January 31,
2020 and July 31, 2019, respectively |
|
|
1,200,000 |
|
|
|
- |
|
|
Convertible Preferred Series L stock, $0.001 par value, 2,000,000
shares authorized, 1,940,000 and 0 issued and outstanding as of
January 31, 2020 and July 31, 2019, respectively |
|
|
1,940 |
|
|
|
- |
|
| Total
long-term liabilities |
|
|
1,201,940 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Total
Liabilities |
|
|
2,480,354 |
|
|
|
1,214,370 |
|
| |
|
|
|
|
|
|
|
|
| Stockholders’
deficit |
|
|
|
|
|
|
|
|
| Preferred series B
stock, $0.001 par value, 1,000,000 shares authorized, 1,000,000 and
0 issued and outstanding as of January 31, 2020 and July 31, 2019,
respectively |
|
|
1,000 |
|
|
|
- |
|
| Common stock, $0.001 par value;
900,000,000 shares authorized, 51,971 and 44,333 issued and
outstanding as of January 31, 2020 and July 31, 2019,
respectively |
|
|
4,853,114 |
|
|
|
4,433,279 |
|
| Additional Paid In
Capital |
|
|
4,802,889 |
|
|
|
5,190,011 |
|
|
Accumulated deficit |
|
|
(12,121,270 |
) |
|
|
(10,835,994 |
) |
| |
|
|
|
|
|
|
|
|
| Total
stockholders’ deficit |
|
|
(2,464,267 |
) |
|
|
(1,212,704 |
) |
| |
|
|
|
|
|
|
|
|
| Total
liabilities & stockholders’ deficit |
|
$ |
16,087 |
|
|
$ |
1,666 |
|
See
accompanying notes to unaudited consolidated financial
statements
LORD
GLOBAL CORPORATION
Consolidated
Statements of Operations (Unaudited)
| |
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Six
Months
Ended |
|
|
Six
Months
Ended |
|
| |
|
January 31,
2020
|
|
|
January 31,
2019
|
|
|
January 31,
2020
|
|
|
January 31,
2019
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
181 |
|
|
|
137 |
|
|
$ |
620 |
|
|
$ |
400 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Professional
fees |
|
|
81,122 |
|
|
|
76,261 |
|
|
|
90,920 |
|
|
|
148,838 |
|
| Expedition
expenses |
|
|
407 |
|
|
|
12,779 |
|
|
|
407 |
|
|
|
26,012 |
|
|
General and administrative |
|
|
4,565 |
|
|
|
12,874 |
|
|
|
1,086,245 |
|
|
|
18,612 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
operating expenses |
|
|
86,194 |
|
|
|
101,914 |
|
|
|
1,177,572 |
|
|
|
193,462 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
loss from operations |
|
|
(86,013 |
) |
|
|
(101,777 |
) |
|
|
(1,176,952 |
) |
|
|
(193,062 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gain (loss) on
settlement |
|
|
- |
|
|
|
- |
|
|
|
(70,000 |
) |
|
|
15,042 |
|
| Derivative Gain
(Loss) |
|
|
18,481 |
|
|
|
22,304 |
|
|
|
18,578 |
|
|
|
191,853 |
|
|
Interest Expense |
|
|
(15,202 |
) |
|
|
(97,271 |
) |
|
|
(56,902 |
) |
|
|
(144,955 |
) |
| Total
Other Income (Expense) |
|
|
3,279 |
|
|
|
(74,967 |
) |
|
|
(108,324 |
) |
|
|
61,940 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
Loss |
|
$ |
(82,734 |
) |
|
$ |
(176,744 |
) |
|
$ |
(1,285,276 |
) |
|
$ |
(131,122 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic
and diluted loss per shares |
|
$ |
(1.63 |
) |
|
$ |
(7.25 |
) |
|
$ |
(26.65 |
) |
|
$ |
(5.58 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted
average shares outstanding |
|
|
50,751 |
|
|
|
24,394 |
|
|
|
48,223 |
|
|
|
23,483 |
|
See
accompanying notes to unaudited consolidated financial
statements
LORD
GLOBAL CORPORATION
Consolidated
Statements of Cash Flows
(Unaudited)
| |
|
Six
Months Ended |
|
|
Six
Months Ended |
|
| |
|
January 31, 2020 |
|
|
January 31, 2019 |
|
| Cash flow from
operating activities: |
|
|
|
|
|
|
|
|
| Net
loss |
|
$ |
(1,285,276 |
) |
|
$ |
(131,122 |
) |
| Depreciation |
|
|
221 |
|
|
|
443 |
|
| Stock based
compensation |
|
|
1,081,000 |
|
|
|
38,403 |
|
| (Gain) Loss on
derivative liability |
|
|
60,730 |
|
|
|
(191,853 |
) |
| Amortization of
debt discount |
|
|
25,329 |
|
|
|
100,335 |
|
| Debt
penalties |
|
|
- |
|
|
|
17,364 |
|
| Loss (gain) on
debt settlement |
|
|
70,000 |
|
|
|
(15,042 |
) |
| Change in
operating liabilities: |
|
|
|
|
|
|
|
|
| Accounts
Receivable |
|
|
- |
|
|
|
- |
|
| Inventory |
|
|
- |
|
|
|
- |
|
| Accounts
Payable |
|
|
20,914 |
|
|
|
70,453 |
|
|
Accrued Interest |
|
|
1,489 |
|
|
|
9,449 |
|
| Net
cash used in operating activities |
|
|
(25,593 |
) |
|
|
(86,435 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flow from
investing activities |
|
|
|
|
|
|
|
|
| Cash Paid for
Purchases of Fixed Assets |
|
|
- |
|
|
|
(1,085 |
) |
| Lord
Global Goodwill |
|
|
(14,440 |
) |
|
|
- |
|
| Net
cash used in investing activities |
|
|
(14,440 |
) |
|
|
(1,085 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flow from
financing activities |
|
|
|
|
|
|
|
|
| Payment on
Promissory Note |
|
|
(59,456 |
) |
|
|
(36,476 |
) |
| Proceeds from
Convertible Debt |
|
|
20,000 |
|
|
|
127,000 |
|
| Issuance of
Preferred Series L for acquisition |
|
|
1,940 |
|
|
|
- |
|
| Repayment of
Advance from shareholders |
|
|
(96,533 |
) |
|
|
(63,133 |
) |
|
Proceeds for Advances from shareholders |
|
|
174,284 |
|
|
|
74,759 |
|
| Net cash provided
by financing activities |
|
|
40,235 |
|
|
|
102,150 |
|
| |
|
|
|
|
|
|
|
|
| Net increase in
cash |
|
|
202 |
|
|
|
17,939 |
|
| Cash at
beginning of period |
|
|
485 |
|
|
|
587 |
|
| Cash at end
of period |
|
$ |
687 |
|
|
$ |
18,526 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental Cash
Flow Information: |
|
|
|
|
|
|
|
|
| Cash
paid for income taxes |
|
$ |
- |
|
|
$ |
- |
|
| Cash
paid for interest expense |
|
$ |
- |
|
|
$ |
- |
|
| Non-Cash
Transactions: |
|
|
|
|
|
|
|
|
| Common stock
issued for debt conversion |
|
|
4,198 |
|
|
|
133,842 |
|
| Recognition of
derivative discount |
|
$ |
38,578 |
|
|
|
172,270 |
|
| Settlement of
derivative liabilities |
|
$ |
- |
|
|
$ |
138,822 |
|
| Cancellation of
common stock |
|
$ |
4,501 |
|
|
$ |
47,850 |
|
See
accompanying notes to unaudited consolidated financial
statements
LORD
GLOBAL CORPORATION
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization,
Nature of Business and Trade Name
A
summary of significant accounting policies of Lord Global
Corporation (the “Company”), a company organized in the state of
Nevada, is presented to assist in understanding the Company’s
financial statements. The accounting policies presented in these
footnotes conform to accounting principles generally accepted in
the United States of America and have been consistently applied in
the preparation of the companying financial statements. These
financial statements and notes are representations of the Company’s
management who are responsible for their integrity and
objectivity.
Lord
Global Corporation fka Bigfoot Project Investments Inc. (“we”,
“our” the “Company”) was incorporated in the State of Nevada on
November 30, 2011. The Company’s mailing address is 318 N Carson
St, Suite 208, Carson City, Nevada 89701 and its fiscal year ended
July 31. Since inception, the Company has been engaged in
organizational efforts and the pursuit of financing. The Company
was established as an entertainment investment business.
The
Company’s mission is to create exciting and interesting proprietary
investment projects. The Company engages in the service of
providing services in connection with revenue generating projects.
The Company’s competitive advantage is the in-house knowledge of
the current Board. The Company will capitalize on the current and
future projects through contractual agreements which allow the
Company to continue to create and establish strategic alliances
with other organizations to create revenue as a stand-alone
business.
On
November 13, 2019, the CEO Carmine T. Biscardi entered into a share
purchase agreement with Lord Global Company and Joseph Cellura to
sell 3,220 shares of Preferred Series A Convertible stock and
45,008 shares of common stock. This agreement transferred
controlling interest of both the Preferred Series A (100% issued
and outstanding) and common stock (51.16% issued and outstanding)
effective November 27, 2019.
On
December 9, 2019, the standing Board of Directors held a meeting
and elected a new officers and Board of Directors. All newly
elected Officers will also serve on the Board of
Directors.
On
December 31, 2019, the Company acquired a private Nevada based
company named Lord Global Corporation. As part of the acquisition,
the Company issued Preferred Series L stock to the shareholders of
Lord Global Corporation in exchange for the shares held in
proportion to the ownership percentages of the existing
shareholders of the private corporation. Upon execution of the
agreement, Lord Global Corporation (The private company) became a
wholly owned subsidiary of Bigfoot Project Investments
Inc.
Subsequent
to the acquisition, the Company applied to FINRA for an approval of
a reverse stock split, a name change, and a ticker symbol change.
FINRA approved the changes on January 28th, 2020 with
the new Company name changing to Lord Global Corporation with a
ticker symbol of LRDG.
After
the acquisition of Lord Global Corporation, the Company affected a
reverse stock split of the issued and outstanding Preferred Series
A and Common stock at a ratio of 1 for 100,000, (“the Reverse Stock
Split”). Unless otherwise noted herein, references to share and
per-share amounts give retroactive effect to the Reverse Stock
Split.
Basis
of Presentation
The
accompanying unaudited interim financial statements have been
prepared on the same basis as the annual audited financial
statements and in accordance with accounting principles generally
accepted in the United States (“GAAP”) for interim financial
information and the rules and regulations of the Securities and
Exchange Commission (“SEC”) for interim financial statements. In
the opinion of management such unaudited information includes all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of this interim information.
Operating results and cash flows for interim periods are not
necessarily indicative of the results that can be expected for the
entire year. The information included in this report should be read
in conjunction with our audited financial statements and notes
thereto included in our 10-K for the year ended July 31, 2019 filed
on SEC website on December 9, 2019.
Revenue
Recognition
The
Company accounts for revenues according to ASC Topic 606, “Revenue
from Contracts with Customers” which establishes principles for
reporting information about the nature, amount, timing and
uncertainty of revenue and cash flows arising from the entity’s
contracts to provide goods or services to customers. The new
standard’s core principal is that an entity will recognize revenue
at an amount that reflects the consideration to which the entity
expects to be entitled in exchange for transferring good or
services to a customer. The principals in the standard are applied
in five steps:
1)
Identify the contract(s) with a customer;
2)
Identify the performance obligations in the contract;
3)
Determine the transaction price;
4)
Allocate the transaction price to the performance obligations in
the contract; and
5)
Recognize revenue when (or as) the entity satisfies a performance
obligation.
During
the six months ended January 31, 2020 and 2019, the Company’s
revenues were primarily made up of revenue generated from our
online streaming distributor. The Company generated revenues from
contracted sources of $438 and $263 for the three months ended
October 31, 2019 and 2018, respectively.
Principles
of Consolidation
The
consolidated financial statements include the accounts of the
Company and its wholly-owned or controlled operating subsidiaries.
All intercompany accounts and transactions have been
eliminated.
Fair
value of financial instruments
The
carrying value of cash, accounts receivable, accounts payable and
accrued expenses, and debt approximate their fair values because of
the short-term nature of these instruments. Management believes the
Company is not exposed to significant interest or credit risks
arising from these financial instruments.
Fair
value is defined as the exchange price that would be received for
an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in
an orderly transaction between market participants on the
measurement date. Valuation techniques used to measure fair value
maximize the use of observable inputs and minimize the use of
unobservable inputs. The Company utilizes a fair value hierarchy
based on three levels of inputs, of which the first two are
considered observable and the last unobservable.
LORD
GLOBAL CORPORATION
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
● |
Level
1 - |
Quoted
prices in active markets for identical assets or liabilities. These
are typically obtained from real-time quotes for transactions in
active exchange markets involving identical assets. |
| ● |
Level
2 - |
Quoted
prices for similar assets and liabilities in active markets; quoted
prices included for identical or similar assets and liabilities
that are not active; and model-derived valuations in which all
significant inputs and significant value drivers are observable in
active markets. These are typically obtained from readily-available
pricing sources for comparable instruments. |
| ● |
Level
3 - |
Unobservable
inputs, where there is little or no market activity for the asset
or liability. These inputs reflect the reporting entity’s own
beliefs about the assumptions that market participants would use in
pricing the asset or liability, based on the best information
available in the circumstances. |
The
following tables present the derivative financial instruments, the
Company’s only financial liabilities measured and recorded at fair
value on the Company’s balance sheets on a recurring basis, and
their level within the fair value hierarchy as of January 31, 2020
and July 31, 2019:
| As of July 31,
2019 |
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
| Embedded conversion
derivative liability |
|
$ |
177,746 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
177,746 |
|
| Warrant
derivative liability |
|
|
47,063 |
|
|
|
- |
|
|
|
|
|
|
|
47,063 |
|
| Total as of
July 31, 2019 |
|
$ |
224,809 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
224,809 |
|
| As of January 31,
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
| Embedded conversion
derivative liability |
|
$ |
184,691 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
184,691 |
|
| Warrant
derivative liability |
|
|
46,946 |
|
|
|
- |
|
|
|
- |
|
|
|
46,946 |
|
| Total as of
January 31, 2020 |
|
$ |
250,236 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
250,236 |
|
The
following table provides a summary of the changes in fair value,
including net transfers in and/or out, of the derivative financial
instruments, measured at fair value on a recurring basis using
significant unobservable inputs:
| Balance at July 31, 2018 |
|
$ |
351,492 |
|
| Fair value of derivative liability at
issuance charged to debt discount |
|
|
172,270 |
|
| Fair value of derivative liability at
issuance charged to derivative loss |
|
|
101,164 |
|
| Reclass to equity due to
conversion |
|
|
(131,693 |
) |
| Write-off of derivative liability due
to settlement |
|
|
(57,248 |
) |
| Unrealized
derivative gain included in other expense |
|
|
(235,769 |
) |
| Balance at October 31, 2018 |
|
$ |
200,216 |
|
| |
|
|
|
|
| Balance at July 31, 2019 |
|
$ |
224,809 |
|
| Fair value of derivative liability at
issuance charged to debt discount |
|
|
20,000 |
|
| Fair value of derivative liability at
issuance charged to derivative loss |
|
|
18,578 |
|
| Reclass to equity due to
conversion |
|
|
(16,994 |
) |
| Unrealized
derivative (gain) loss included in other expense |
|
|
3,843 |
|
| Balance at January 31, 2020 |
|
$ |
250,236 |
|
The
Company evaluated its convertible notes to determine if the
embedded component of those contracts qualify as derivatives to be
separately accounted for under ASC Topic 815, “Derivatives and
Hedging.” The Company determined that due to the variable number of
common stock that the notes convert to, the embedded conversion
option were required to be bifurcated and accounted for as a
derivative liability. The fair value of the derivative liability is
calculated at the time of issuance and the Company records a
derivative liability for the calculated value. Changes in the fair
value of the derivative liability are recorded in other income
(expense) in the consolidated statements of operations. Upon
conversion of a derivative instrument, the instrument is marked to
fair value at the conversion date and then that fair value is
reclassified to equity.
The
Company’s derivative instruments were valued using the Lattice
model (for convertible notes) based on a probability weighted
discounted cash flow model, and the Montel Carlo model (for tainted
warrants) based on a multipath random event model. For the six
months ended January 31, 2020, assumptions used in the valuation
include the following: a) underlying stock price ranging from
$0.00010 (pre-reverse) to $1.26 (post-reverse); b) projected
discount on the conversion price ranging from 40.68% to 70.10% with
the notes effectively converting at discounts in the range of 40%
to 58%; c) projected volatility of 397.5% to 440.0%; d)
probabilities related to default and redemption of the notes during
the term of the notes.
For
the six months ended January 31, 2019, assumptions used in the
valuation include the following: a) underlying stock price ranging
from $0.0016 (pre-reverse) to $0.0003 (pre-reverse); b) projected
discount on the conversion price ranging from 40% to 58% with the
notes effectively converting at discounts in the range of 38.70% to
65.17%; c) projected volatility of 261.1% to 310.1%; d)
probabilities related to default and redemption of the notes during
the term of the notes.
The
Company has considered the provisions of ASC 480, Distinguishing
Liabilities from Equity, as the conversion feature embedded in
each debenture could result in the note principal being converted
to a variable number of the Company’s common shares.
Basic
and Diluted Earnings per Share
Basic
earnings per share are based on the weighted-average number of
shares of common stock outstanding.
The
FASB ASC Topic 260, “Earnings per Share”, requires the Company to
include additional shares in the computation of earnings per share,
assuming dilution.
Diluted
earnings per share are based on the assumption that all dilutive
options were converted or exercised. Dilution is computed by
applying the treasury stock method. Under this method, options are
assumed to be exercised at the time of issuance, and as if funds
obtained thereby were used to purchase common stock at the average
market price during the period.
We
calculate basic earnings (loss) per share by dividing net income
(loss) available to common shareholders by the weighted average
number of common shares outstanding during the reporting period.
Diluted earnings per share is calculated similarly but reflects the
potential impact of outstanding stock options, stock warrants and
other commitments to issue common stock, including shares issuable
upon the conversion of convertible notes outstanding, except where
the impact would be anti-dilutive.
The
following is a reconciliation of basic and diluted earnings per
share for the three and six months ended January 31, 2020 and
2019:
| |
|
Three
Months
Ended |
|
|
Three
Months
Ended |
|
|
Six
Months
Ended |
|
|
Six
Months
Ended |
|
| |
|
January 31,
2020
|
|
|
January 31,
2019
|
|
|
January 31,
2020
|
|
|
January 31,
2019
|
|
| Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
(loss) available to common shareholders |
|
$ |
(82,734 |
) |
|
$ |
(176,744 |
) |
|
$ |
(1,285,276 |
) |
|
$ |
(131,122 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares – basic and
diluted |
|
|
50,751 |
|
|
|
24,394 |
|
|
|
48,223 |
|
|
|
23,483 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) per
share – basic and diluted |
|
$ |
(1.63 |
) |
|
$ |
(7.25 |
) |
|
$ |
(26,65 |
) |
|
$ |
(5.58 |
) |
NOTE
2 - GOING CONCERN
The
Company’s financial statements are prepared using accounting
principles generally accepted in the United States of American
applicable to a going concern, which contemplates the realization
of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or
other current assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. These conditions raise substantial
doubt about our ability to continue as a going concern.
Under
the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor the necessity of liquidation, ceasing trading, or
seeking protection from creditors pursuant to laws or regulations.
Accordingly, assets and liabilities are recorded on the basis that
the entity will be able to realize its assets and discharge its
liabilities in the normal course of business.
The
ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plan described in
the preceding paragraph and eventually attain profitable
operations. The accompanying financial statements do not include
any adjustments that may be necessary if the Company is unable to
continue as a going concern.
Historically,
the Company has mostly relied upon internally generated funds such
as shareholder loans and advances to finance its operation and
growth. Management may raise additional capital by future public or
private offerings of the Company’s stock or through loans from
private investors, although there can be no assurance that it will
be able to obtain such financing. The Company’s failure to do so
could have a material and adverse effect upon it and its
shareholders.
NOTE
3 – ADVANCE FROM SHAREHOLDERS
In
the six months ended January 31, 2020, additional advances from
shareholders were received in the amount of $204,520. The Company
made payments on these advances amounting to $174,476. These
advances bear no interest and are due on demand. The total advances
from shareholders as of July 31, 2019 were $75,135 and as of
January 31, 2020 were $152,886.
In
the six months ended January 31, 2019, additional advances from
shareholders were received in the amount of $74,759. The Company
made payments on these advances amounting to $63,133. These
advances bear no interest and are due on demand. The total advances
from shareholders as of July 31, 2018 were $57,524 and as of
January 31, 2019 were $69,150.
NOTE
4 – NOTE PAYABLE – RELATED PARTY
In
January 2013, Lord Global Corporation executed a promissory note in
the amount of $484,029 as part of the asset transfer agreement for
the transfer of all assets held by Searching for Bigfoot, Inc. In
August 2013, the Company increased the balance of the promissory
note by $489 to add an asset that was not included in the original
transfer. The note is subject to annual interest of 4%. The unpaid
principal and the accrued interest are payable in full on January
31, 2019.
The
holder of the note has agreed to allow the note to be renewed for
another year making the current maturity date, January 31, 2020.
The Company was able to pay $9,456 towards the principal of the
loan during the six months ended January 31, 2020. The Company also
issued 5,000 shares of Series A Convertible Preferred stock in
exchange for $50,000 of principal on the note. As of January 31,
2020, and July 31, 2019, the outstanding balance on the note was
$376,437 and $435,894, respectively.
Interest
expense for the six months ended January 31, 2020 and 2019 was
$4,724 and $9,447, respectively.
NOTE
5 - CAPITAL STOCK
Common Stock
The
holders of the Company’s common stock are entitled to receive
dividends out of assets or funds legally available for the payment
of dividends at such times and in such amounts as the board from
time to time may determine. Holders of common stock are entitled to
one vote for each share held on all matters submitted to a vote of
shareholders. There is no cumulative voting of the election of
directors then standing for election. The common stock is not
entitled to pre-emptive rights and is not subject to conversion or
redemption. Upon liquidation, dissolution or winding up of the
company, the assets legally available for distribution to
stockholders are distributable ratably among the holders of the
common stock after payment of liquidation preferences, if any, on
any outstanding payment of other claims of creditors.
The
Company has 51,971 and 48,531 shares of common stock issued and
outstanding as of January 31, 2020 and July 31, 2019,
respectively.
During
the three months ended October 31, 2019, the Board of Directors
with the consent of majority shareholders authorized an increase in
the authorized stock to 500,000,000 shares Preferred Series A and
19,500,000,000 shares common stock.
During
the six months ended January 31, 2020, the Board of Directors with
the consent of majority shareholders authorized a reverse stock
split at the ratio of 1 for 100,000 shares of Preferred Series A
and common stock.
During
the six months ended January 31, 2020, the Board of Directors with
the consent of majority shareholders authorized a decrease in the
authorized stock to 100,000,000 shares allocated to the various
Preferred Series stock and 900,000,000 shares common
stock.
During
the six months ended January 31, 2020, Auctus Fund LLC (“Auctus
Fund”) issued a conversion notice for the loan executed on August
1, 2018 to the Company for 2,048 shares of common stock for a
principal reduction of $2,917, interest of $4,776 and fees of
$500.
During
the six months ended January 31, 2020, Crown Bridge Partners Fund
LLC issued a conversion notice for the loan executed February 25,
2019 to the Company for 2,150 shares of common stock for a
principal reduction of $6,775 and fees of $750.
During
the six months ended January 31, 2019, the Company reserved 217
shares of common stock for Veyo Partners per the consulting
agreement dated November 30, 2017. Fair value of the shares
reserved as of January 31, 2019 is $8,647.
During
the six months ended January 31, 2019, the Company issued to Auctus
Fund 1,103 shares of common stock to convert the principal amount
due of $3,516 and settlement of unpaid interest of $83 and penalty
of $10,000.
On
November 8, 2019, 1,780 shares of Series A Convertible Preferred
stock were converted to 42,720 shares of common stock.
On
November 13, 2019, the CEO Carmine T. Biscardi entered into a share
purchase agreement with Lord Global Corporation and Joseph Cellura
to sell 3,220 shares of Preferred Series A Convertible stock and
45,008 shares of common stock. This agreement transferred
controlling interest of both the Preferred Series A (100% issued
and outstanding) and common stock (51.16% issued and outstanding)
to these parties, effective November 27, 2019.
On December
13, 2019, the Company by vote of majority shareholders and
unanimous consent of the Board, approved a 100,000 to 1 reverse
stock split. On December 16, 2019, the Company filed with the State
of Nevada a Certificate of Change registering the 100,000 to 1
reverse stock split for each class of stock. The reverse stock
split was approved by FINRA effective January 29, 2020.
During the
six months ended January 31, 2020, the Company designated three new
classes of preferred stock: Series F Convertible Preferred with
40,000,000 shares authorized at $0.001 par value and Series T
Convertible Preferred with 37,500,000 shares authorized at $0.001
par value, and Series B Super Voting Preferred with 1,000,000
shares authorized at $0.001 par value.
During
the six months ended January 31, 2020, Management returned to
treasury 45,008 shares of common stock.
During
the six months ended January 31, 2020, the Company issued 1,940,000
shares of Preferred Series L convertible stock as compensation for
the share exchange agreement with Lord Global
Corporation.
During
the six months ended January 31, 2020, the Company issued 1,000,000
shares of Preferred Series B Super Voting stock as compensation for
on-going negotiations for revenue generating contracts.
Series A Convertible Preferred Stock
On
October 31, 2019, pursuant to the Certificate of Designation, the
Company authorized 19,500,000 shares of the Series A Convertible
Preferred Stock, which shall be convertible into shares of common
stock of the Company at the option of the holders thereof at any
time after the issuance of the preferred stock. Each Series A
Convertible Preferred Stock shall be converted into 24 shares of
common stock.
The
Series A Convertible Preferred Stock has the following rights and
privileges:
Voting
– The holders of the Preferred Stock shall be entitled to the
number of votes equal to the number of shares of common stock into
which such shares of Preferred Stock could be converted.
Conversion
– Each share of Preferred Stock, is convertible at the option of
the holder into twenty-four shares of common stock, subject to
certain adjustments for dilution, if any, resulting from future
stock issuances, including for any subsequent issuance of common
stock at a price per share less than that paid by the holders of
the Preferred Stock. The outstanding shares of Preferred Stock can
be converted into common stock upon the request of the holding
shareholder.
Liquidation
– In the event of any liquidation, dissolution, winding-up or sale
or merger of the Company, whether voluntarily or involuntarily,
each holder of Preferred Stock is entitled to receive, in
preference to the holders of common stock, a per-share amount equal
to the original issue price of $0.001 (as adjusted, as defined),
plus all declared but unpaid dividends.
Contingent
redemption - In the event that a Mandatory Redemption Event (as
defined below) occurs, each Holder shall have the right to have all
or any portion of the Preferred Shares held by such Holder redeemed
by the Company (a “Mandatory Redemption”) at the Mandatory
Redemption Price. The “Mandatory Redemption Price” shall be equal
to the Liquidation Preference of the Preferred Shares being
redeemed multiplied by one hundred and twenty five percent (125%)
in same day funds. In order to exercise its right to effect a
Mandatory Redemption, a Holder must deliver a written notice (a
“Mandatory Redemption Notice”) to the Company at any time on or
before the Business Day following the day on which such event is no
longer continuing.
(i)
the Company fails for any reason (including without limitation as a
result of not having a sufficient number of shares of Common Stock
authorized and reserved for issuance, or as a result of the
limitation contained in the stock designation, or due to voluntary
action undertaken by the Company or a failure by the Company to
take action, to issue shares of Common Stock to a Holder and
deliver certificates representing such shares to such Holder as and
when required by the provisions hereof upon Conversion of any
Preferred Shares, and such failure continues for ten (10) Business
Days;
(ii)
the Company breaches, in a material respect, due to voluntary
action undertaken by the Company or a failure by the Company to
take action, any covenant or other material term or condition of
the Preferred Stock, or any other agreement, document, certificate
or other instrument delivered in connection with the transactions
contemplated thereby, and such breach continues for a period of
five (5) Business Days after written notice thereof to the Company
from a Holder;
(iii)
any material representation or warranty made by the Company in any
agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby or thereby is
inaccurate or misleading in any material respect as of the date
such representation or warranty was made due to voluntary action
undertaken by the Company or a failure by the Company to take
action.
The
Board voted to award the CEO Carmine T. Biscardi 5,000 shares of
Preferred Series A stock, of which 500 shares of Series A
convertible preferred stock were issued in exchange for $50,000 of
the debt and 4,500 shares of Series A convertible preferred stock
were issued as compensation for his long service to the Company. We
determined the fair value of the preferred stock as of the issuance
date based on the market price of $10 for common stock with 1 share
of Series A Preferred Stock convertible to 24 shares of common
stock, resulting in a fair value of $240 per share. Thus, the fair
value for 500 and 4,500 shares of Series A Convertible Preferred
Stock is $120,000 and $1,080,000, respectively. The Company
recognized a loss on settlement of debt of $70,000 and stock-based
compensation of $1,080,000 for the above-mentioned preferred stock
issuances, during the six months ended January 31, 2020. Due to the
Preferred Stock’s contingent redemption feature, the Series A
Convertible Preferred Stock are reported as temporary equity in the
consolidated balance sheet.
Series B Super Voting Preferred Stock
During
the six months ended January 31, 2020, pursuant to the Certificate
of Designation, the Company authorized 1,000,000 shares of the
Series B Super Voting Preferred Stock, which shall have
non-dilutable voting rights equivalent to 68% of all voting
shares.
The
Series B Super Voting Preferred Stock has the following rights and
privileges:
Voting
– The holders of the Preferred Stock shall have non-dilutable
majority voting rights of 68% over the entire capital
structure.
Liquidation
– In the event of any liquidation, dissolution, winding-up or sale
or merger of the Company, whether voluntarily or involuntarily,
each holder of Preferred Stock is entitled to receive, in
preference to the holders of common stock, a per-share amount equal
to the original issue price of $0.001 (as adjusted, as defined),
plus all declared but unpaid dividends.
During
the six months ended January 31, 2020, the Company issued 1,000,000
shares of Series B Super Voting Preferred Stock to 27 Health, Inc.
as compensation for on-going negotiations for revenue generating
contracts.
Series L Convertible Preferred Stock
On
January 17, 2019, pursuant to the Certificate of Designation, the
Company authorized 2,000,000 shares of the Series L Convertible
Preferred Stock, which shall be convertible into shares of common
stock of the Company at the option of the holders thereof at any
time after the issuance of the preferred stock. Each Series L
Convertible Preferred Stock shall be converted into 3 shares of
common stock.
The
Series L Convertible Preferred Stock has the following rights and
privileges:
Voting
– The holders of the Preferred Stock shall be entitled to the
number of votes equal to the number of shares of common stock into
which such shares of Preferred Stock could be converted.
Conversion
– Each share of Preferred Stock, is convertible at the option of
the holder into twenty-four shares of common stock, subject to
certain adjustments for dilution, if any, resulting from future
stock issuances, including for any subsequent issuance of common
stock at a price per share less than that paid by the holders of
the Preferred Stock. The outstanding shares of Preferred Stock can
be converted into common stock upon the request of the holding
shareholder.
Liquidation
– In the event of any liquidation, dissolution, winding-up or sale
or merger of the Company, whether voluntarily or involuntarily,
each holder of Preferred Stock is entitled to receive, in
preference to the holders of common stock, a per-share amount equal
to the original issue price of $0.001 (as adjusted, as defined),
plus all declared but unpaid dividends.
Contingent
redemption - In the event that a Mandatory Redemption Event (as
defined below) occurs, each Holder shall have the right to have all
or any portion of the Preferred Shares held by such Holder redeemed
by the Company (a “Mandatory Redemption”) at the Mandatory
Redemption Price. The “Mandatory Redemption Price” shall be equal
to the Liquidation Preference of the Preferred Shares being
redeemed multiplied by one hundred and twenty five percent (125%)
in same day funds. In order to exercise its right to effect a
Mandatory Redemption, a Holder must deliver a written notice (a
“Mandatory Redemption Notice”) to the Company at any time on or
before the Business Day following the day on which such event is no
longer continuing.
(i)
the Company fails for any reason (including without limitation as a
result of not having a sufficient number of shares of Common Stock
authorized and reserved for issuance, or as a result of the
limitation contained in the stock designation, or due to voluntary
action undertaken by the Company or a failure by the Company to
take action, to issue shares of Common Stock to a Holder and
deliver certificates representing such shares to such Holder as and
when required by the provisions hereof upon Conversion of any
Preferred Shares, and such failure continues for ten (10) Business
Days;
(ii)
the Company breaches, in a material respect, due to voluntary
action undertaken by the Company or a failure by the Company to
take action, any covenant or other material term or condition of
the Preferred Stock, or any other agreement, document, certificate
or other instrument delivered in connection with the transactions
contemplated thereby, and such breach continues for a period of
five (5) Business Days after written notice thereof to the Company
from a Holder;
(iii)
any material representation or warranty made by the Company in any
agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby or thereby is
inaccurate or misleading in any material respect as of the date
such representation or warranty was made due to voluntary action
undertaken by the Company or a failure by the Company to take
action.
During
the six months ended January 31, 2020, pursuant to the share
exchange agreement with Lord Global Corporation dated December 31,
2019, the Company issued 1,940,000 shares of Preferred Series L
stock in exchange for the outstanding shares of the private
company. The stock has a stated par value of $0.001, the
transaction was recorded at the stated par value of the
stock.
Series T Convertible Preferred Stock
On
January 17, 2019, pursuant to the Certificate of Designation, the
Company authorized 37,500,000 shares of the Series T Convertible
Preferred Stock, which shall be convertible into shares of common
stock of the Company at the option of the holders thereof at any
time after the issuance of the preferred stock. Each Series T
Convertible Preferred Stock shall be converted into 3 shares of
common stock.
The
Series T Convertible Preferred Stock has the following rights and
privileges:
Voting
– The holders of the Preferred Stock shall be entitled to the
number of votes equal to the number of shares of common stock into
which such shares of Preferred Stock could be converted.
Conversion
– Each share of Preferred Stock, is convertible at the option of
the holder into three shares of common stock, subject to certain
adjustments for dilution, if any, resulting from future stock
issuances, including for any subsequent issuance of common stock at
a price per share less than that paid by the holders of the
Preferred Stock. The outstanding shares of Preferred Stock can be
converted into common stock upon the request of the holding
shareholder.
Liquidation
– In the event of any liquidation, dissolution, winding-up or sale
or merger of the Company, whether voluntarily or involuntarily,
each holder of Preferred Stock is entitled to receive, in
preference to the holders of common stock, a per-share amount equal
to the original issue price of $0.001 (as adjusted, as defined),
plus all declared but unpaid dividends.
Contingent
redemption - In the event that a Mandatory Redemption Event (as
defined below) occurs, each Holder shall have the right to have all
or any portion of the Preferred Shares held by such Holder redeemed
by the Company (a “Mandatory Redemption”) at the Mandatory
Redemption Price. The “Mandatory Redemption Price” shall be equal
to the Liquidation Preference of the Preferred Shares being
redeemed multiplied by one hundred and twenty five percent (125%)
in same day funds. In order to exercise its right to effect a
Mandatory Redemption, a Holder must deliver a written notice (a
“Mandatory Redemption Notice”) to the Company at any time on or
before the Business Day following the day on which such event is no
longer continuing.
(i)
the Company fails for any reason (including without limitation as a
result of not having a sufficient number of shares of Common Stock
authorized and reserved for issuance, or as a result of the
limitation contained in the stock designation, or due to voluntary
action undertaken by the Company or a failure by the Company to
take action, to issue shares of Common Stock to a Holder and
deliver certificates representing such shares to such Holder as and
when required by the provisions hereof upon Conversion of any
Preferred Shares, and such failure continues for ten (10) Business
Days;
(ii)
the Company breaches, in a material respect, due to voluntary
action undertaken by the Company or a failure by the Company to
take action, any covenant or other material term or condition of
the Preferred Stock, or any other agreement, document, certificate
or other instrument delivered in connection with the transactions
contemplated thereby, and such breach continues for a period of
five (5) Business Days after written notice thereof to the Company
from a Holder;
(iii)
any material representation or warranty made by the Company in any
agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby or thereby is
inaccurate or misleading in any material respect as of the date
such representation or warranty was made due to voluntary action
undertaken by the Company or a failure by the Company to take
action.
Warrants
On
February 25, 2019, the Company also issued Crown Bridge Partners
LLC a Common Stock Purchase Warrant for 189 shares of common stock.
The warrants have an exercise price of $350 per share and
expiration date of February 25, 2024. These warrants were tainted
by the variable notes and the fair value of $47,063 was accounted
for as a derivative liability in accordance with ASC 815. During
the six months ended January 31, 2020, no warrants were granted,
forfeited, expired or cancelled. As of January 31, 2020, there were
189 warrants outstanding with a weighted average exercise price of
$350, a weighted average remaining of 4.3 years and intrinsic value
of zero.
NOTE
6 – DISTRIBUTION AGREEMENTS
The
Company entered into a Distribution Agreement on September 2, 2011
with the Bosko Group LLC providing them a non-exclusive right to
market the sales of the Company’s DVD’s. The Distribution Agreement
requires the Company to pay the Bosko Group LLC ten percent (10%)
of the selling price of the DVD’s sold. This agreement remained in
effect for a period of 4 years and has been automatically renewed
for an additional 4 years with no limit on the number of times the
agreement may be automatically renewed, unless either party gives
notice to the other of its desire to terminate the Agreement at
least sixty (60) days before expiration of the original or renewal
term.
In
May 2017, the Company entered into two separate agreements (the
“Re-Release”) with The Bosko Group LLC (the “Distributor”) to
provide distribution and promotional services to the Company. The
terms of the agreements provide for the following:
|
|
a. |
Compensation
to the Company for the Re-Release will be based on projected gross
sales range and royalties for six existing DVD documentaries which
will be offered into all distribution markets as a series with a
new introduction narrated by Tom Biscardi. |
| |
|
|
| |
b. |
Compensation
to the Company for the Distribution of new feature-length films is
based on past performance of previous productions with up-front
funding and projected royalties over all distribution channels. The
Company completed production of the first of the new feature-length
films in July 2017. The film was edited and released in August 2018
through various channels, and the Company is awaiting sales reports
from the distribution company. |
On
August 1, 2018, the Company, entered into a Securities Purchase
Agreement (the Securities Purchase Agreement”) with an investor,
pursuant to which the Company sold to the Investor a convertible
promissory note in the principal amount of $110,000 (the “August
2018 Note”), for an aggregate purchase price of $100,000. The
Company received $100,000 cash and recorded $10,000 as issuance
cost. The August 2018 Note matures on May 1, 2019, bears interest
rate of 10% per year payable on maturity date in cash or shares of
common stock at the Company’s option (subject to certain
conditions), and is convertible into shares of the Company’s common
stock at the conversion price equal to the lower of (i) the closing
sale price of the common stock on the principal market on the
trading day immediately preceding the closing date, and (ii) 55% of
either the lowest sale price for the common stock during the 20
consecutive trading days including and immediately preceding the
conversion date. This note became convertible on issuance date and
the variable conversion feature was accounted for as a derivative
liability in accordance with ASC 815. The Company recorded an
increase in the principal of $15,000 since the conversion price is
less than $0.01. The August 2018 Note has an outstanding balance as
of January 31, 2020 of $79,399, is in default and subject to annual
interest of 24%.
On
September 23, 2019, the Company entered into a convertible
promissory note with KinerjaPay Corp. for an aggregate purchase
price of $20,000. The Note matures on March 23, 2020, bears
interest rate of 10% per year payable on maturity date in cash or
shares of common stock at the Company’s option (subject to certain
conditions), and is convertible into shares of common stock at the
conversion rate equal to 50% multiplied by the Market Price.
“Market Price” means the average of the lowest Trading Price (as
defined below) for the Common Stock during the thirty (30) Trading
Day period ending on the latest complete Trading Day prior to the
Conversion Date. “Trading Price” means, for any security as of any
date, the closing bid price on the OTCQB, OTCQX, Pink Sheets
electronic quotation system or applicable trading market (the
“OTC”) as reported by a reliable reporting service (“Reporting
Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC
is not the principal trading market for such security, the closing
bid price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no
closing bid price of such security is available in any of the
foregoing manners, the average of the closing bid prices of any
market makers for such security that are listed in the “pink
sheets”. The variable conversion feature was accounted for as a
derivative liability under ASC 815, resulting in the recognition of
a discount of $20,000 on the issuance date. The balance of
principal on the September 23, 2019 note as of January 31, 2020 is
$20,000.
On
February 25, 2019, the Company signed a convertible promissory note
with Crown Bridge Partners, LLC for a principal sum of $165,000 to
be requested in installments. The first installment of $28,500 was
received for the principal of $33,000 on March 1st,
2019. The note is subject to interest rate of 8% and matures in
February 2020. The holder of the note shall have the right to
convert the notes at any time, the note bears interest rate of 8%
per year payable on maturity date in cash or shares of common stock
at the Company’s option (subject to certain conditions), and is
convertible into shares of the Company’s common stock at the
conversion price which equals 50% multiplied by the lowest one
trading price for the common stock during the 25 day trading day
period ending on the last complete trading day prior to the
conversion date. The note is convertible on issuance date and the
variable conversion feature with a fair value of $56,216 was
accounted for as a derivative liability in accordance with ASC 815
with a corresponding charge of $28,500 to debt discount and $27,716
to day one loss on derivative. On February 25, 2019, the Company
also issued Crown Bridge Partners LLC a Common Stock Purchase
Warrant for 18,857,142 shares of common stock. The warrants have an
exercise price of $0.0035 per share and expiration date of February
25, 2024. These warrants were tainted by the variable notes and the
fair value of $47,063 was accounted for as a derivative liability
in accordance with ASC 815. The outstanding balance of the
principal on the note as of July 31, 2019 and January 31, 2020, is
$33,000 and $26,225, respectively.
In
the six months ended January 31, 2020 and 2019, the Company
recorded amortization of debt discount in the amount of $25,329 and
$100,335, respectively. Unamortized discount as of January 31, 2020
amounted to $20,607.
NOTE
8 - SUBSEQUENT EVENTS
On
February 7, 2020, the Company entered into a share exchange
agreement with 27 Health, Inc. The issued shares of the acquired
company will be exchanged for Preferred Series F stock in
proportion to the ownership percentages of the issued stock. Upon
the issuance of the stock, 27 Health Inc. will become a wholly
owned subsidiary of Lord Global Corporation. The acquisition was
recorded at the par value of the stock at the time of
issuance.
On March 2, 2020, the Company, entered into a Securities Purchase
Agreement (the Securities Purchase Agreement”) with an investor,
pursuant to which the Company sold to the Investor a convertible
promissory note in the principal amount of $125,000 (the “August
2018 Note”), for an aggregate purchase price of $110,000. The
Company received $110,000 cash and recorded $10,000 as issuance
cost. The August 2018 Note matures on January 2, 2021, bears
interest rate of 12% per year payable on maturity date in cash or
shares of common stock at the Company’s option (subject to certain
conditions), and is convertible into shares of the Company’s common
stock at the conversion price equal to the lower of (i) the closing
sale price of the common stock on the principal market on the
trading day immediately preceding the closing date, and (ii) 55% of
either the lowest sale price for the common stock during the 20
consecutive trading days including and immediately preceding the
conversion date.
Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of
Operations
This
Quarterly Report on Form 10-Q contains forward-looking statements
and involves risks and uncertainties that could materially affect
expected results of operations, liquidity, cash flows, and business
prospects. These statements include, among other things, statements
regarding:
|
|
● |
our
ability to diversify our operations; |
| |
● |
inability
to raise additional financing for working capital; |
| |
● |
the
fact that our accounting policies and methods are fundamental to
how we report our financial condition and results of operations,
and they may require our management to make estimates about matters
that are inherently uncertain; |
| |
● |
our
ability to attract key personnel; |
| |
● |
our
ability to operate profitably; |
| |
● |
our
ability to generate sufficient funds to operate the Lord Global
Corporation operations, upon completion of our
acquisition; |
| |
● |
deterioration
in general or regional economic conditions; |
| |
● |
adverse
state or federal legislation or regulation that increases the costs
of compliance, or adverse findings by a regulator with respect to
existing operations; |
| |
● |
changes
in U.S. GAAP or in the legal, regulatory and legislative
environments in the markets in which we operate; |
| |
● |
the
inability of management to effectively implement our strategies and
business plan; |
| |
● |
inability
to achieve future sales levels or other operating
results; |
| |
● |
the
unavailability of funds for capital expenditures; |
| |
● |
other
risks and uncertainties detailed in this report; |
as
well as other statements regarding our future operations, financial
condition and prospects, and business strategies. These
forward-looking statements are subject to certain risks and
uncertainties that could cause our actual results to differ
materially from those reflected in the forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to, those discussed in this Quarterly Report on
Form 10-Q, and in particular, the risks discussed under the heading
“Risk Factors” in Part II, Item 1A and those discussed in other
documents we file with the Securities and Exchange Commission. We
undertake no obligation to revise or publicly release the results
of any revision to these forward-looking statements. Given these
risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.
References
in the following discussion and throughout this quarterly report to
“we”, “our”, “us”, “Lord Global”, “the Company”, and similar terms
refer to Lord Global Corporation unless otherwise expressly stated
or the context otherwise requires.
OVERVIEW
AND OUTLOOK
Background
We
are a company with only minimal revenues to date: we have minimal
assets and have incurred losses since inception. Pursuant to the
Share Purchase agreement executed between Lord Global Corporation
and majority shareholder Tom Biscardi, a new Board was appointed on
December 13, 2019. The execution of this agreement resulted in a
change of control to the Board of Lord Global
Corporation.
During
the six-month period ended January 31, 2020, a share exchange
agreement was executed between Bigfoot Project Investments, Inc.
and Lord Global Corporation. After the agreement was executed, the
Company submitted an application to FINRA for the following
changes:
|
|
● |
1 for
100,000 reverse stock split for issued common stock as well as
Preferred Series A stock |
| |
● |
Name
change from Bigfoot Project Investments, Inc. to Lord Global
Corporation |
| |
● |
Ticker
symbol change from BGFT to LRDG |
The
application was approved on January 28, 2020. On January 29, 2020,
Bigfoot Project Investments, Inc. became Lord Global Corporation
with the new ticker symbol LRDG.
During
the FINRA approval process events came to light necessitating the
removal “for cause” of certain Board members and officers. The
remaining Board consisting of a quorum, under direction of legal
counsel, approved and issued a new Preferred Series stock that held
68% non-dilutable voting rights. These actions resulted in a change
of control allowing the remaining Board authority to remove the
CEO, and COO as officers and dismiss them from the Board “for
cause”. All actions and reasons for actions were disclosed to
appropriate agencies throughout the process.
Lord
Global Corporation plans to establish itself as the most reliable
and dependable source for providing access to affordable focused
healthcare products and knowledge, as well as financial products
catered to the growing target market of independent contractors,
GIG economy workers, entrepreneurs and freelancers. We plan on
focusing our efforts on revenue generating projects that will
benefit the open market.
RESULTS
OF OPERATIONS
During
the three months ended January 31, 2020, we generated revenue of
$181. During the three months ended January 31, 2019, we generated
revenue of $137. The increase in revenue was a result of an
increase in the video products offered for streaming through Amazon
Prime.
During
the six months ended January 31, 2020, we generated revenue of
$620. During the six months ended January 31, 2019, we generated
revenue of $400. Increase in revenue was primarily due an increase
in interest in the video products offered for streaming through
Amazon Prime.
Operating
expenses during the three months ended January 31, 2020 were
$86,194. Operating expenses during the three months ended January
31, 2019 were $101,914. Decrease in expenses was due to a shift in
focus from expeditions to revenue generating contracts and the
termination of the agreement with Veyo Partners.
Operating
expenses during the six months ended January 31, 2020 were
$1,177,571. Operating expenses during the six months ended January
31, 2019 were $193,462. Operating expenses for the six months ended
January 31, 2020 consisted of professional fees of $90,920, general
and administrative fees of $1,084,339 and expedition expenses of
$407. Operating expenses for the six months ended January 31, 2019
consisted of professional fees of $148,838, expedition expense of
$26,012 and general and administrative fees of $18,612. Expenses
increased during 2020 mainly due to stock-based compensation for
general and administrative expenses during the six months ended
January 31, 2020.
There
is significant uncertainty projecting future profitability due to
our history of losses and lack of revenues. In our current state we
have no recurring or guaranteed source of revenues and cannot
predict when, if ever, we will become profitable. There is
significant uncertainty projecting future profitability due to our
minimal operating history and lack of guaranteed ongoing revenue
streams.
Liquidity and Capital Resources
As of
January 31, 2020, we had $687 in cash and did not have any other
cash equivalents. The following table provides detailed information
about our net cash flow for all financial statement periods
presented in this Quarterly Report. To date, we have financed our
operations through the issuance of stock and borrowings.
The
following table sets forth a summary of our cash flows for the six
months ended January 31, 2020 and 2019:
| |
|
Period
Ended
January
31, 2020
|
|
|
Period
Ended
January
31, 2019
|
|
| Net cash used in operating
activities |
|
$ |
(25,593 |
) |
|
$ |
(84,211 |
) |
| Net cash used in investing
activities |
|
|
(14,440 |
) |
|
|
- |
|
| Net cash provided by financing
activities |
|
|
40,235 |
|
|
|
102,150 |
|
| Net increase in Cash |
|
|
202 |
|
|
|
17,939 |
|
| Cash,
beginning |
|
|
485 |
|
|
|
587 |
|
| Cash, ending |
|
$ |
687 |
|
|
$ |
18,526 |
|
Since
inception, we have financed our cash flow requirements through
issuance of common stock and debt financing. As we expand our
activities, we may, and most likely will, continue to experience
net negative cash flows from operations, pending receipt of
listings or some form of advertising revenues. We anticipate
obtaining additional financing to fund operations through
additional common stock offerings, to the extent available, or to
obtain additional financing to the extent necessary to augment our
working capital.
We
anticipate that we will incur operating losses in the next twelve
months. Our lack of operating history makes predictions of future
operating results difficult to ascertain. Our prospects must be
considered in light of the risks, expenses and difficulties
frequently encountered by companies in their early stage of
development, particularly companies in new and rapidly evolving
markets. Such risks for us include, but are not limited to, an
evolving and unpredictable business model and the management of
growth. To address these risks, we must, among other things, obtain
a customer base, implement and successfully execute our business
and marketing strategy, continually develop and upgrade our
website, provide national and regional industry participants with
an effective, efficient and accessible website on which to promote
their products and services through the Internet, respond to
competitive developments, and attract, retain and motivate
qualified personnel. There can be no assurance that we will be
successful in addressing such risks, and the failure to do so can
have a material adverse effect on our business prospects, financial
condition and results of operations.
Operating activities
Net
cash used in operating activities was $25,593 for the period ended
January 31, 2020, as compared to $84,211 used in operating
activities for the period ended January 31, 2019.
Investing activities
Net
cash used in investing activities was $14,440 for the period ended
January 31, 2010, as compared to $0 used in investing activities
for the same period in 2019.
Financing activities
Net
cash provided by financing activities for the period ended January
31, 2020 was $40,235 as compared to $102,150 for the same period of
2019.
We
believe that cash flow from operations will not meet our present
and near-term cash needs and thus we will require additional cash
resources, including the sale of equity or debt securities, to meet
our planned capital expenditures and working capital requirements
for the next 12 months. We will require additional cash resources
due to changed business conditions, implementation of our strategy
to expand our sales and marketing initiatives, increase brand
awareness, or acquisitions we may decide to pursue. If our own
financial resources and then current cash-flows from operations are
insufficient to satisfy our capital requirements, we may seek to
sell additional equity or debt securities or obtain additional
credit facilities. The sale of additional equity securities will
result in dilution to our stockholders. The incurrence of
indebtedness will result in increased debt service obligations and
could require us to agree to operating and financial covenants that
could restrict our operations or modify our plans to grow the
business. Financing may not be available in amounts or on terms
acceptable to us, if at all. Any failure by us to raise additional
funds on terms favorable to us, or at all, will limit our ability
to expand our business operations and could harm our overall
business prospects.
Off-Balance
Sheet Arrangements
We
did 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 is material to investors.
Item 3. Quantitative and Qualitative
Disclosure About Market Risk
This
item is not applicable as we are currently considered a smaller
reporting company.
Item 4T. Controls and
Procedures
Evaluation of Disclosure Controls and Procedures
Our
Principal Executive Officer and Chief Financial Officer evaluated
the effectiveness of our disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Exchange Act) as of the period
covered by this Report. Based on that evaluation, it was concluded
that our disclosure controls and procedures are not designed at a
reasonable assurance level and are not effective to provide
reasonable assurance that information we are required to disclose
in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized, and reported within the time
periods specified in the SEC’s rules and forms, and that such
information is accumulated and communicated to our management,
including our principal executive and principal financial officer,
or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.
Changes in Internal Control Over Financial
Reporting
There
were no changes in our internal control over financial reporting
that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
Limitations on Effectiveness of Controls and
Procedures
In
designing and evaluating the disclosure controls and procedures,
management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives. In addition,
the design of disclosure controls and procedures must reflect the
fact that there are resource constraints and that management is
required to apply its judgment in evaluating the benefits of
possible controls and procedures relative to their
costs.
PART II—OTHER
INFORMATION
Item 1. Legal
Proceedings.
We
are not a party to any material legal proceedings.
Item 1A. Risk Factors
The
risk factors listed in our S-1 filed with the Securities Exchange
Commission, are hereby incorporated by reference.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds.
Stock
Issuances
During
the six months ended January 31, 2019, Auctus Fund converted 1,103
shares of common stock for a principal amount due of $3,516 and
settlement of unpaid interest of $83 and penalty of $10,000.
Balance of the note as of January 31, 2019 was $0.
During
the six months ended January 31, 2019, the Company reserved 960
shares of common stock for Veyo Partners per the consulting
agreement dated November 30, 2017. Fair value of the shares
reserved as of January 31, 2019 is $38,403.
During
the six months ended January 31, 2019, EMA Financial converted
4,617 shares of common stock for a reduction in the principal
amount due of $40,000 and settlement of unpaid interest of $2,063
and penalties of $2,000. The note went into default as of January
19, 2018. The balance on the note as of January 31, 2019 is
$0.
During
the six months ended January 31, 2019, Power Up Lending converted
4,682 shares of common stock for a principal amount due of $53,000
and settlement of unpaid interest of $3,180. The balance of all
notes for Power Up as of January 31, 2019 is $30,000.
During
the six months ended January 31, 2020, the Board of Directors with
the consent of majority shareholders authorized an increase in the
authorized stock to 500,000,000 shares Preferred Series A and
19,500,000,000 shares common stock.
During
the six months ended January 31, 2020, the Board of Directors
authorized four additional classes for Preferred Series stock,
Preferred Series B Super Voting, Preferred Series L convertible,
and Preferred Series F convertible and Preferred Series T
convertible, the terms of the preferred stock.
During
the six months ended January 31, 2020, the Board of Directors
authorized a reverse stock split of 1 for 100,000
shares.
During
the six months ended January 31, 2020, The Board of Directors
authorized a reduction in authorized shares to 1,000,000,000
shares, 100,000,000 shares to be allocated as specified in the
articles submitted with the Nevada Secretary of State and
900,000,000 shares of common stock.
During
the six months ended January 31, 2020, the Board of Directors
authorized the issuance of 1,940,000 shares of Preferred Series L
stock as part of a share exchange agreement with Lord Global
Corporation.
During
the six months ended January 31, 2020, the Board of Directors
authorized the issuance of 1,000,000 shares of Preferred Series B
stock as stock compensation for development of revenue generating
contracts.
Issuer
Purchases of Equity Securities
During
the six months ended January 31, 2020, management of the Company
authorized the deposit of 4,501 shares of common stock into
treasury.
Item 3. Defaults Upon Senior
Securities.
None.
Item 4. Mine Safety
Disclosures
None.
Item 5. Other
Information.
None.
Item 6. Exhibits.
*XBRL
(Extensible Business Reporting Language) information is furnished
and not filed or a part of a registration statement or prospectus
for purposes of Sections 11 or 12 of the Securities Act of 1933, as
amended, is deemed not filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, and otherwise is not
subject to liability under these sections.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
| |
Lord Global Corporation. |
|
|
|
|
| Date:
March 20, 2020 |
By: |
/s/
Joseph Frontiere |
| |
|
Joseph
Frontiere |
| |
|
Chief
Executive Officer |
| |
|
(Principal
Executive Officer and duly authorized signatory) |
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