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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒
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 (§ 232.405 of this chapter) 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 “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
At June 30, 2022, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $552,562 based on the closing sale price of the registrant’s common stock on June 30, 2022 of $0.0014 per share.
Number of outstanding shares of common stock as of March 31, 2023, was 753,377,447.
Documents Incorporated by Reference: None.
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact could be deemed forward-looking statements. Statements that include words such as “may,” “will,” “might,” “projects,” “expects,” “plans,” “believes,” “anticipates,” “targets,” “intends,” “hopes,” “aims,” “can,” “should,” “could,” “would,” “goal,” “potential,” “approximately,” “estimate,” “pro forma,” “continue” or “pursue” or the negative of these words or other words or expressions of similar meaning may identify forward-looking statements. For example, forward-looking statements include any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing.
These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and the other documents referred to and relate to a variety of matters, including, but not limited to, other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should not be relied upon as predictions of future events and Maptelligent, Inc. (the “Company”) cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. Furthermore, if such forward-looking statements prove to be inaccurate, the inaccuracy may be material. Considering of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company or any other person that the Company will achieve its objectives and plans in any specified timeframe, or at all.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. The Company disclaims any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Annual Report on Form 10-K or to reflect the occurrence of unanticipated events, except as required by law.
The Company will continue to file annual, quarterly, and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the dates specified in such filings. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we do not undertake any obligation to update any forward-looking statements to reflect events or circumstances arising after any such date, whether as a result of new information or future events or otherwise.
PART I
Throughout this Annual Report on Form 10-K, the “Company,” “Maptelligent,” “we,” “us,” and “our” refers to Maptelligent, Inc.
Item 1. Business.
The following description of our business contains forward-looking statements relating to future events or our future financial or operating performance that involve risks and uncertainties, as set forth above under “Special Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors described in the Annual Report, including those set forth above in the Special Cautionary Note Regarding Forward-Looking Statements or elsewhere in this Annual Report.
History
Following the World Trade Center attack in 2001, Maptelligent, Inc., used the expertise of its executive’s extensive background in communication technologies and investigated additional technologies that could make the response efforts of emergency managers more streamlined. Hurricane Katrina presented many new problems for first responders and others who could benefit. Our staff participated and attended a series of Katrina Panel meetings to better understand the communication “gaps” that our responders identified. Following Katrina, Maptelligent, Inc. decided to take a pro-active position to these gaps and started a company focused on the research and development of new world technologies dedicated to the safety and security of people and the places they congregate. With the Sandy Hook School shooting, the Aurora Theater attack, the Boston Marathon bombing, the horrific events that have taken place in Paris and Orlando and the Marjory Stoneman Douglas High School in Parkland, Florida, Maptelligent, Inc., continued to pursue the creation of an interoperable method of sharing critical in-building information with our first responders. When the Las Vegas attack during the Harvest Music Festival took place, everyone realized the problem of data sharing between our public servants needed to be solved. The occurrence of the COVID-19 Pandemic in 2021 further identified the need for horizontal and vertical data sharing between hospitals and first responders worldwide and many others.
After careful consideration and assessment of current market conditions, we have decided to improve our product portfolio by developing new capabilities consistent with current technology innovations such as SaaS, Cloud, and e-commerce product delivery.
Business Overview
Maptelligent delivers easy-to-use web and mobile applications for teams to explore, enhance and collaborate on projects using data from multiple systems in a geospatial context. Maptelligent digital twin solution set provides interconnectivity, automation, and access to real-time data. We enable visibility into information and documents that your teams are managing, so that they can measure progress, understand risks and costs, and communicate seamlessly with stakeholders. Maptelligent implementing innovative technology, allowing customers to model their operations and solve today’s complex business problems. Using the latest in remote capture technology (LIDAR, Photogrammetry), building information, modelling and location intelligence delivers customized digital twin and Industry 4.0 applications. Maptelligent, Inc., provides customers a secure web application with a flexible framework on Esri’s ArcGIS Platform technology. This approach provides cost effective, customized solutions, which are tailored to our customers’ unique disparate data and operational requirements. Coupled with cloud interoperability, Maptelligent, Inc., delivers an innovative, easy-to-use web-based experience by integrating multiple operations, including asset management, building automation and control, interdisciplinary coordination, scheduling, cost estimating, and integrated construction specifications.
Digital twin technology is a critical component of Industry 4.0, the ongoing automation of traditional manufacturing and industrial practices, using modern smart technology. In simple terms, digital twin is the virtual replica of real-world objects, including physical objects, processes, relationships, and behaviours. These models of real-world objects, through the use of Maptelligent capabilities, can be implemented into common operational pictures, for unique real-time integrated understanding of your environment. Maptelligent, Inc., provides web and mobile solutions that leverage the latest in no code/low code development capability. This provides cost effective, customized solutions, which are tailored to our customers’ unique disparate data and operational requirements. Coupled with cloud interoperability, the Maptelligent, Inc., solution delivers an innovative, easy-to-use web-based experience by integrating multiple operations, including asset management, building automation and control, interdisciplinary coordination, scheduling, cost estimating, and integrated construction specifications.
Maptelligent can provide the following capabilities:
Digital Transformation & Technical Services
| · | Data conversion & digital transformation and information models |
| · | Database design and implementation |
| · | Geospatial data manipulation, conversion, and reporting |
| · | Product as a service development, including mobile and field maps |
| · | Template deployments and configuration |
| · | ArcGIS Web Application Builder custom widget development |
Assessments – remote sensing and data capture
| · | Floorplan, elevation, or other low fidelity property capture |
| · | Prescriptive Maintenance for location assets, Property Management Assessment |
| · | Campus Safety, Ground Transportation and Multi-Hazard Infrastructure |
| · | Asset Value Assessment, High Rise or Multi Commercial Assessment |
| · | Medical/Hospital Multi Hazard Assessments |
Survey Services - high accuracy engineering schematics using lidar remote sensing
| · | Floor Plan (Detailed) - Walls, fenestration, openings, stairs, plumbing, casework, soffits, HVAC registers, appliances, cabinets & counters |
| · | Floor Plan (Basic) - Walls, fenestration, openings, stairs, and structural elements only. No fixtures |
| · | Exterior Elevations (Detailed) - Walls, roof lines, openings, fenestration and grade with illustrated decor, ornamentation & detail |
| · | Exterior Elevations (Basic) - Walls, roof lines, openings, fenestration and grade. No decor, ornamentation or window & door detail |
| · | Building Sections (Structural) - Same as above but includes rafters, floor joists, or foundation members at cut. Requires foundation plan |
| · | Building Sections (Basic) - Cut through building from grade up through roof - No rafters, floor joists, or foundation members |
| · | Roof Plan - Roof line, building line, ridges, parapets, water shed, valleys, & hips |
| · | Site Plan/Landscape Survey - Structures, hard/soft scapes, street centerline & curb work (not a civil survey) |
| · | Reflected Ceiling Plan - Reflected image of ceiling elements. Includes ceiling heights |
| · | Electrical & Lighting Plan - Receptacles, switches, control panels, lighting devices and fixtures |
| · | Mechanical Plan - HVAC Equip, ducting, and observable equip |
| · | Roof Framing Plan - Structural drawing of roof members such as ridge beams, rafters, purlins, hip rafters, posts, valley rafters, etc. |
| · | Foundation Plan - Foundation walls, girder beams, posts, columns, piers, joists, and slabs |
| · | Equipment Plan - Boilers, furnaces, pumps, control systems, compressors, elevator equip etc. |
| · | Interior Elevations - Wall perimeters, openings, fenestration, trim, wall decor, wall fixtures and lighting |
| · | 360 Degree Area Photography/Virtual Tour - 360-degree photos of desired architecture, areas, or spaces |
| · | Revit Modeling - Level of detail to be modeled is determined case by case |
| · | Point Cloud Delivery - Registered point cloud files delivered in various file formats |
As a result of the agreement with ESRI as a Silver Partner – Value Added Reseller, we now are able to provide a multi-layer geographic information system which can serve as the common situational awareness tool for customers. We intend to license our products through ESRI “partner user licenses” providing a roust secure infrastructure for our clients. These solutions can support Smart City Initiatives both large and small. Smart city initiatives are programs that use advanced technology like building information models, cameras, sensors and the Internet of Things to collect data on things like water usage, volume of traffic, electricity consumption, parking availability, waste management, the presence of pedestrians and bicyclists, and interactions between citizens and their city government. Analytics help to process and transform this data into actionable information. All products are scalable by design and encourage data sharing across client stakeholders. We know our approach will provide critical information to our customers providing return on investment.
This set of comprehensive digital twin capability is designed for everyday use, scaling seamlessly to support multiple operations and capabilities. Buildings, regardless of occupancy and construction class, are looked upon as living eco-systems that need to be managed and maintain of their critical functions such as water intake, wastewater, electric power, air quality, HVAC, occupant security and safety, occupant access and egress via stairs, halls, elevators, and escalators, to identify a few. Building information management (BIM) models / systems today are transforming how we design, conduct construction scheduling, and facilitate the multitude of issues of owning buildings, regardless of occupancy and construction category.
In addition to buildings, Maptelligent digital twins can include industrial systems and machinery coupled with people and process to uncover actionable insights. We are developing business partnerships that currently provide hardware and software solutions such as LIDAR (laser scanners), cameras, door access controls, metal detectors, AI, cloud services and other commonly used stand-alone technologies solutions. Each of these partnerships are designed to allow their existing customers the ability to seamlessly integrate with our market offerings. These relationships will allow their existing customers to create, maintain, and connect their systems of critical infrastructure in an intuitive Maptelligent based map display and viewed by their local, regional and state emergency response agencies and personnel. We combine multiple layers of situational awareness into an extensible framework needed to fully implement emergency planning and facility/asset management goals.
REVENUE STREAM STRATEGY
The previous business model was very heavy on PC based services, in which we would go in, build a floor plan, capture attribute data, digitize it, and present it on a map. The model relying on PC based methods entails a lot of work up-front even before getting paid for the service and product.
To improve the method and to ensure our business model allows for more effective and balanced payment structure of our services, we are planning on partnering with strategic business partners so we can offer low-cost/low-touch solutions within our buying experience such as that associated with SaaS. This can be implemented by simply directing the customer to www.maptelligent.com as they subscribe to our map conversion and data sharing service between their infrastructure and their first responders.
To create an effective buyer experience, a strategy to implement four interwoven revenue streams will provide a low cost/low touch entry point to work with us and provide customers with options as their needs grow.
The four revenue streams are as follows:
| 1. | SaaS (recurring subscription for a hosted solution) |
| 2. | Content Management Solutions |
| 3. | Products/Solutions (apps, software, and hardware per user) |
| 4. | Professional Services (ProServ) (time, material, expenses) |
Maptelligent SaaS
The SaaS model is a multi-tenant hosted solution to be used by all customer stakeholders to view and share information. Feature/functionality is extended and complemented through selling Products and Solutions. For example: Customized ArcGIS Collector App for building engineers to maintain building attributes and setup maintenance schedules. An App for teachers to initiate an emergency alert and provide location and status of each student.
SaaS is strategic to our future business because SaaS is the direction the market is moving toward in solution buying. SaaS offers customers a streamlined method to acquire new technology and shortens the sales cycle and increases profit margins through lower cost of sales.
Content Management
Today’s IT market is rapidly moving to the cloud. The cloud is a global network of servers, each with a unique function. The cloud is not a physical entity, but instead is a vast network of remote servers around the globe which are linked together and meant to operate as a single ecosystem. These servers are designed to either store and manage data, run applications, or deliver content or a service such as streaming videos, web mail, office productivity software, or social media. Instead of accessing files and data from a local or personal computer, you are accessing them online from any Internet-capable devices making the information available anywhere. Many companies and organizations are choosing the cloud as a cost-effective means of storing large volumes of data and information. The cloud affords organizations the ability to address and access their data storage needs rapidly and securely while only paying for what they use. This cloud utility model is a fundamental change from the legacy private data centers.
We provide customers with a cloud content management solution to store and manage data associated with the security solutions we provide.
Products/Solutions (Maps and Apps)
As mentioned above, the product/solution revenue stream is associated with complementing and extending the SaaS product with a series of stand-alone maps and apps that will support the hosted solution with specific use cases such as building maintenance, fire department preplanning and risk analysis, and law enforcement tactical response planning and execution.
The types of maps we can provide would be proprietary content and shareable with the customer for an additional subscription fee. Customers can select map layers from a catalog of map services to use within their own map.
Professional Services
ProServ is our core business and distinctive competence and will provide work engagements for our implementation and project team. It should complement our overall solution offering but not be the leading driver of how we first engage with a customer. With that in mind, how we get building plans into the map can be as simple as adding a PDF to get the customer started, or for an additional cost, we do a complete and thorough review and assessment of the customer facility. ProServ will be our upsell, not the initial sell.
| 1. | We build and map high-fidelity floor plans including collecting attribute data. Our target market is school safety and physical security for critical infrastructure and large campus facilities |
| 2. | A SaaS solution for organizations interested in mapping building floor plans to facilitate a better public safety response to emergency incidents at the location |
| 3. | We plan to utilize hosted SaaS solutions (Partner Companies) as a platform to sell to our customers for low-fidelity building plan mapping |
| 4. | We propose our organization creates an organization instance on Partner Company’s SaaS solutions |
| 5. | We will provide our own user provisioning to collect customer information and subscriptions |
| 6. | We will share the revenue collected with Partner Companies |
| 7. | We intend to use the Partner Company’s solutions as a means to facilitate a low-touch entry into mapping for schools, hospitals, and enterprises interested in providing better security of their facilities through first responders having access to information |
| 8. | We intend to establish a proprietary content management solution for its customers to use |
| 9. | We will provide/share content (high-fidelity floor plans, etc.) we collect via the Partner Company’s SaaS interface so that dispatch centers, and first responders as part of the relationship with Partner Companies. |
| 10. | Ultimately Maptelligent, Inc., and various Partner Companies would collaborate on opportunities to drive solution utilization |
SALES & MARKETING PLAN
We are on a mission to enhance physical security of structures where large gatherings of people can be found such as, schools, universities, hospitals, sports venues, shopping malls, corporate campuses, etc. Through the use of geospatial technology, we are transforming the way data and information is accessed during a time of crisis by those who need it most...first responders. Our solution integrates disparate data from sensors, cameras, alarms, access control, accountability systems and many other sources to create actionable intelligence by presenting their location within a building and by visualizing the data/information they provide on an intuitive map interface.
We provide a geographic platform for first responders to access site-specific information enhancing situational awareness while en route and upon arrival at the incident scene. This quick access to relevant information shortens the time it takes for tactical action by allowing advanced arrival planning, thereby mitigating additional life and property threat exposure.
Our geocentric system serves as a common operational picture for all stakeholders involved in maintaining and protecting physical structures and venues. Through potential partnerships with industry leaders in physical security technology, Maptelligent, Inc., solutions act as the data integration platform for visualizing information produced by partners technologies.
Our solution serves a large market of organizations and entities who are often at risk from threats and emergency incidents such as: schools, universities, hospitals, shopping malls, sporting events, commercial enterprises, ports (sea and air), to name a few markets.
Our customers begin their solution journey by uploading a building floor plan via a PDF file to a hosted solution in the cloud. This low-touch/low-cost solution allows users to quickly share site-specific details with public safety.
Our customers seeking to share additional relevant information and data are able to use Maptelligent, Inc. content management cloud services making it accessible anywhere on any device with permission.
We offer a suite of maps and apps providing customers the ability to maintain and manage data in a mobile environment for public safety to create incident preplans associated with the building floor plan and for building engineers to manage maintenance schedules for critical elements of a building such as alarm panels, pull stations, extinguishers, and other assets which need regular attention.
We offer customers with Professional Services (ProServ) to build high fidelity floor plans, safety assessments, and system integration services making the whole system complete and comprehensive.
We have developed our sales plan to maximize our product’s market penetration and revenue potential. We intend to promote sales through a combination of in-house efforts, strategic partnerships, license arrangements and reseller agreements.
To date we have primarily been focused on research, development and field testing. Having an abundance of ambition, we have delivered multiple proofs of concept, despite a limited funding. In order to have a successful rollout of products, the Company aims to be in the position to hire experienced sales managers and account executives to sell to both the public and private markets.
We believe we represent the only community solution that addresses all four pillars of preparation, mitigation, response, and recovery in a single application. Our software will integrate fire, police, EMS (Emergency Medical Services), and private and municipal assets into a single common operating picture. Our platform allows for authentication of each end user’s data input across multi-disciplinary and interagency activities. This allows various administrative users the ability to update data on a near real-time basis, allowing for a free flow of updates from authorized administrators to end users responding to an incident.
All emergencies start at a local level. These emergencies may escalate and involve multiple community agencies, multiple jurisdictions, and sometimes even to the point of a federal response. Our suite of software focuses on both pre-incident planning and enhanced data handling during response and mitigation. Our software will allow for complete horizontal and vertical data sharing, providing a common operating picture for all agencies from the fire and police chief, to the mayor, state agencies, and federal authorities.
Our development considers the needs of emergency and public safety responders as well as the needs of the building owners to form a unique public and private partnership for community preparedness. We believe our suite of products distinguishes us from our competitors by providing detailed and interactive site-specific data. We address a critical need: a public/private partnership for the sharing of pertinent data both horizontally and vertically without undue burden on existing agency resources.
THE MARKETS
The safety and security of people and places extends to many vertical markets because the value of emergency planning is not limited to first responders themselves. The same concepts apply to other types of organizations, such as:
| · | School Districts |
| · | Colleges and Universities |
| · | Hospitals, Nursing Homes, Assisted Living |
| · | Hotels and Casinos |
| · | Airports and Seaports |
| · | Government Buildings (Courthouse complexes, DMV, Internal revenue, and more) |
| · | Theaters and Cineplexes |
| · | Large Commercial Property Owners and Management Companies |
| · | Safe/Smart City Projects |
| · | Oil & Gas Companies |
| · | Telecommunication Companies |
| · | Sport Venues |
| · | Global corporations with widespread facilities and critical assets. e.g. retail stores, restaurant chains, manufacturers, industrial parks, to name a few examples. |
Current Business Partnerships/Sales
Esri Business Partner: We are currently a Silver Business Partner with Esri, whose geographic software engine is the core of our GIS interface. This relationship should boost our marketing and sales substantially, as we will be providing a robust product for public safety, and Esri is the de facto in public safety mapping worldwide.
The Company has been developing strategic partnerships. Our objective is to introduce us to well established distribution outlets and technology partners. These strategic partnerships will build awareness about our products, generate significant sales, and will allow the Company to focus on technology development. Today the Company is involved in working with several strategic partners.
Competition
While we believe that we provide a unique software solution for use by first responders, we will face intense competition from other companies that engage or may engage in providing computer software and related technology to assist first responders.
Many of these competitors have been in existence for a considerable period of time, have substantially greater resources than we do and have developed relationships with regulators and government officials that may facilitate their ability to attract government contracts to their companies rather than ours.
Seasonality
We do not expect any seasonality in our business.
Employees
Other than our Officers and Directors, as of March 31, 2023, we have three full-time and no part-time employees. We anticipate adding additional employees in the next 12 months, as needed.
Intellectual Property
In the future, we may rely on a combination of patent, trademark, copyright, and trade secret laws in the United States as well as confidentiality procedures and contractual provisions to protect our proprietary technology, databases, and our brand.
We plan to have a policy of requiring key employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our employee agreements also require relevant employees to assign to us all rights to any inventions made or conceived during their employment with us. In addition, we have a policy of requiring individuals and entities with which we discuss potential business relationships to sign non-disclosure agreements. Our agreements with clients include confidentiality and non-disclosure provisions.
Item 1A. Risk Factors.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2. Properties.
Our mailing address is 2831 St. Rose Parkway, Suite #297 Henderson, NV 89052. Our telephone number is (415) 990-8141.
Item 3. Legal Proceedings.
On July 15, 2022, the Company filed a lawsuit with the Eight Circuit District Court in Clark County, Nevada, naming Albert Koenigsberg and Geocommand, Inc. as defendants. The Company sought relief for breach of contract, breach of the covenant of good faith and fair dealing, conversion, unjust enrichment, and breach of fiduciary duty. The Company’s allegations included, among other claims, that Mr. Koenigsberg, during his prior time as an executive of the Company, utilized unauthorized funds, entered into improper agreements, and unaccounted for the Company’s finances. On or about December 30, 2022, the Company was successful in obtaining a total judgment of $57,320.94 against Geocommand, solely, with interest continuing to accrue until paid in full, as follows:
| 1) | The principal sum of $43,500.00; |
| 2) | Interest calculated at 6.75% on the principal amount from the date of service of the Complaint, August 11, 2022, until this judgment is paid in full, calculated at $8.05 per day, which amounts to $1,143.10 through December 31, 2022, which amount continues to accrue unless and until paid in full; and |
| 3) | Reasonable attorneys’ fees in the amount of $10,892.50; and |
| 4) | Costs of suit in the amount of $1,785.34. |
The matter as it relates to defendant Albert Koenigsberg is ongoing and is scheduled to go to trial later this year.
On August 13, 2021, the SEC filed a complaint in the United States District Court for the Southern District of New York against multiple defendants, which include GPL Ventures LLC, Alexander Dillon, and Cosmin Panait, among other parties (altogether “Defendants”). The Complaint indicates that the Defendants participated in a penny stock fraud scheme. The SEC also charged certain of the Defendants with operating as unregistered dealers, and obtained emergency relief to halt their ongoing conduct. Additionally, the complaint alleges that Defendants falsely represented to their brokers that GPL Ventures was not involved in any stock promotions with respect to the shares GPL Ventures was depositing and selling into the market. Furthermore, the complaint also charges Dillon, Panait and the GPL entities with operating as unregistered dealers, and given their ongoing conduct, the SEC sought and obtained an order temporarily restraining these defendants and freezing their assets until further order of the Court. To date, there has been no action taken on the notes with GPL Ventures and it is not known how the Court with address the matter as it relates to the Company. The only relationship is convertible notes payable that are outstanding with the Company. There has been no collection efforts on the part of GPL Ventures LLC. The Company is not a party to the legal action taken by the SEC.
Other than disclosed above, there are no other actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
As of the date of this Annual Report on Form 10-K, except as set forth herein, management believes that there are no claims against us, which it believes will result in a material adverse effect on our business or financial condition.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock is quoted on the OTC Pink under the symbol “MAPT”. The following table sets forth the high and low prices per share of our common stock for each period indicated. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
| | Common Shares | |
Year Ended December 31, 2021: | | High | | | Low | |
Quarter Ended March 31, 2022 | | $ | 0.0090 | | | $ | 0.0030 | |
Quarter Ended June 30, 2022 | | $ | 0.0052 | | | $ | 0.0011 | |
Quarter Ended September 30, 2022 | | $ | 0.0016 | | | $ | 0.0009 | |
Quarter Ended December 31, 2022 | | $ | 0.0010 | | | $ | 0.0005 | |
Year Ended December 31, 2021: | | High | | | Low | |
Quarter Ended March 31, 2021 | | $ | 0.220 | | | $ | 0.032 | |
Quarter Ended June 30, 2021 | | $ | 0.050 | | | $ | 0.010 | |
Quarter Ended September 30, 2021 | | $ | 0.017 | | | $ | 0.010 | |
Quarter Ended December 31, 2021 | | $ | 0.014 | | | $ | 0.005 | |
Series A Preferred Stock
1,000,000 shares of preferred A designated, with each share convertible on one for one base for common stock and no voting rights.
Series A-2 Preferred Stock
10,000 shares of preferred A-2 designated, with each share convertible into four times the sum of all shares of common stock issued and outstanding with the same voting rights.
Series B Preferred Stock
1,000,000 shares of preferred B designated, with each share convertible into 10 shares of common stock and has 10 votes for any election.
Series C Preferred Stock
1,000 shares of preferred C designated, with each share are not convertible and has voting rights equal to four times the sum of total common stock shares issued and outstanding plus the total number of series B, A and A-2 that are issued and outstanding.
Security Holders
As of December 31, 2022, we had approximately 681 individual shareholders of record of our Common Stock.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.
Equity Compensation Plan
We do not have any equity compensation plan.
Transfer Agent
Our transfer agent is Securities Transfer Corporation with a mailing address at 13577 Feather Sound Drive, Suite 500, Clearwater, FL 33762.
Recent Sales of Unregistered Securities.
Except as set forth below, during our fiscal years ended December 31, 2022 and 2021, all sales of equity securities that were not registered under the Securities Act were previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. Unless otherwise disclosed below, all issuances of Common Stock were made pursuant to the exemption under Section 4(a)(2) of the Securities Act.
Issuance of Common Stock Pursuant to Regulation A Offering
During the year ended December 31, 2021, we conducted a Regulation A offering of our Common Stock, at $0.01 price per share, for net proceeds of $1,254,000, which include $25,000 of fees. The Company issued approximately 127,900,000 shares of common stock.
Issuance of Common Stock Pursuant to Convertible Promissory Notes
During the year ended December 31, 2021, the Company converted convertible note principal and accrued interest of $1,237,791 into 72,372,320 shares of common stock and $4,978,928 relief of derivative liability settled through additional paid in capital for a total of $6,216,719.
During the year ended December 31, 2022, the Company converted convertible note principal of $249,750 and accrued interest of $11,189 for total debt of $260,939 into 272,187,390 shares of common stock.
Other
During the year ended December 31, 2021, the Company issued 20,986,734 shares of Common Stock for compensation of $253,183.
During the year ended December 31, 2021, the Company issued 1,281,787 shares of Common Stock for settlement of related party debt of $1,873,740.
During the year ended December 31, 2022, the Company issued 4,850,000 shares of common stock for current year compensation (2,450,000 shares) of $8,700 and stock payable for prior year compensation (2,400,000 shares) of $24,500. The Company also issued 225,000 shares of common stock for payment of accounts payable of $1,800.
Purchases of Equity Securities by the Issuer and Affiliated Purchaser
There were no issuer purchases of equity securities during the year ended December 31, 2022.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of our operations together with our financial statements and the notes thereto appearing elsewhere in this Annual Report. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the section entitled “Cautionary Statement regarding Forward-Looking Statements” and elsewhere in this Annual Report. Please see the notes to our Financial Statements for information about our Critical Accounting Policies and Recently Issued Accounting Pronouncements.
Management’s Discussion and Analysis
The Company has had no revenues from operations in each of the last two fiscal years, and in the current fiscal year.
Business Overview
Maptelligent delivers easy-to-use web and mobile applications for teams to explore, enhance and collaborate on projects using data from multiple systems in a geospatial context. Maptelligent digital twin solution set provides interconnectivity, automation, and access to real-time data. We enable visibility into information and documents that your teams are managing, so that they can measure progress, understand risks and costs, and communicate seamlessly with stakeholders. Maptelligent implementing innovative technology, allowing customers to model their operations and solve today’s complex business problems. Using the latest in remote capture technology (LIDAR, Photogrammetry), building information, modelling and location intelligence delivers customized digital twin and Industry 4.0 applications. Maptelligent, Inc., provides customers a secure web application with a flexible framework on Esri’s ArcGIS Platform technology. This approach provides cost effective, customized solutions, which are tailored to our customers’ unique disparate data and operational requirements. Coupled with cloud interoperability, Maptelligent, Inc., delivers an innovative, easy-to-use web-based experience by integrating multiple operations, including asset management, building automation and control, interdisciplinary coordination, scheduling, cost estimating, and integrated construction specifications.
Digital twin technology is a critical component of Industry 4.0, the ongoing automation of traditional manufacturing and industrial practices, using modern smart technology. In simple terms, digital twin is the virtual replica of real-world objects, including physical objects, processes, relationships, and behaviours. These models of real-world objects, through the use of Maptelligent capabilities, can be implemented into common operational pictures, for unique real-time integrated understanding of your environment. Maptelligent, Inc., provides web and mobile solutions that leverage the latest in no code/low code development capability. This provides cost effective, customized solutions, which are tailored to our customers’ unique disparate data and operational requirements. Coupled with cloud interoperability, the Maptelligent, Inc., solution delivers an innovative, easy-to-use web-based experience by integrating multiple operations, including asset management, building automation and control, interdisciplinary coordination, scheduling, cost estimating, and integrated construction specifications.
Results of Operations
The following are the results of our continuing operations for the year ended December 31, 2022 compared to the year ended December 31, 2021:
| | Years Ended | | | | | | | |
| | December 31, | | | | | | | |
| | 2022 | | | 2021 | | | Change | | | % | |
Revenue | | $ | - | | | $ | - | | | $ | - | | | | - | |
Operating expense | | | 651,170 | | | | 1,196,811 | | | | (545,641 | ) | | (46 | %) |
Other income (expense) | | | 2,833,270 | | | | 91,959,692 | | | | (89,126,422 | ) | | (97 | %) |
Net income (loss) | | $ | 2,182,100 | | | $ | 90,762,881 | | | $ | (88,580,781 | ) | | (98 | %) |
Revenue
During the years ended December 31, 2022 and 2021, the Company did not generate any revenue.
Operating Expenses
| | Years Ended | | | | | | | |
| | December 31, | | | | | | | |
| | 2022 | | | 2021 | | | Change | | | % | |
General and administrative | | $ | 144,786 | | | $ | 386,504 | | | $ | (241,718 | ) | | (63 | %) |
Professional fee | | | 177,530 | | | | 130,434 | | | | 47,096 | | | | 36 | % |
Compensation and payroll taxes | | | 328,854 | | | | 679,873 | | | | (351,019 | ) | | (52 | %) |
Total operating expenses | | $ | 651,170 | | | $ | 1,196,811 | | | $ | (545,641 | ) | | (46 | %) |
Compensation and payroll taxes decreased by $351,019, during the year ended December 31, 2022 as compared to 2021. The decrease in compensation expense in the current period is primarily due to reductions in employees’ payroll and stock based compensation. Professional fees increased by $47,096 during the year ended December 31, 2022 as compared to the same period in 2021 primarily due to increases in legal and consulting fees. General and administrative expenses decreased by $241,718 during the year ended December 31, 2022 as compared to 2021. The decrease in general and administrative expenses is primarily due to decreases in marketing and software expenses.
Other Income (Expense)
| | Years Ended | | | | | | | |
| | December 31, | | | | | | | |
| | 2022 | | | 2021 | | | Change | | | % | |
Interest expense | | $ | (442,394 | ) | | $ | (546,062 | ) | | $ | 103,668 | | | (19 | %) |
Gain on settlement of debt | | | 87,062 | | | | 907 | | | | 86,155 | | | 9499 | % |
Change in fair value of derivative liability | | | 3,188,602 | | | | 92,504,847 | | | | (89,316,245 | ) | | (97 | %) |
Total other income (expense) | | $ | 2,833,270 | | | $ | 91,959,692 | | | $ | (89,126,422 | ) | | (97 | %) |
The decrease in other income was primarily due to the change in fair value of derivative liability, from an accounting estimate primarily from the conversion feature of one convertible promissory note.
Liquidity and Capital Resources
| | December 31, | | | December 31, | | | | | | | |
| | 2022 | | | 2021 | | | Change | | | | % | |
Cash | | $ | 210,508 | | | $ | 966,682 | | | $ | (756,174 | ) | | (78 | %) |
Current assets | | $ | 404,696 | | | $ | 1,159,724 | | | $ | (755,028 | ) | | (65 | %) |
Current liabilities | | $ | 2,987,958 | | | $ | 6,541,729 | | | $ | (3,553,771 | ) | | (54 | %) |
Working capital deficiency | | $ | (2,583,262 | ) | | $ | (5,382,005 | ) | | $ | 2,798,743 | | | (52 | %) |
Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements, and otherwise operate on an ongoing basis. The Company has insufficient operating revenues so is currently dependent on debt financing and sale of equity to fund operations.
As shown in the accompanying financial statements, the Company has net income of $2,182,100 and $90,762,881 for the years ended December 31, 2022 and 2021, respectively. The Company also has an accumulated deficit of $36,700,394 and negative working capital of $2,583,262 as of December 31, 2022, as well as outstanding convertible notes payable of $538,256.
As of December 31, 2022, the net income and working capital deficiency is primarily due to the non-cash accounting estimate of a derivative liability of $1.76 million, for the valuation of the discounted variable-rate conversion features on our convertible notes. Our derivative accounting estimates and disclosures should be read in conjunction with critical accounting policies and Notes 6 and 8 in our financial statements, as they are disclosed elsewhere in this report.
Management believes that it will need additional equity or debt financing to be able to implement its business plan. Given the lack of revenue, capital deficiency and negative working capital, there is substantial doubt about the Company’s ability to continue as a going concern.
We believe that the successful growth and operation of our business is dependent upon our ability to do the following:
| · | obtain adequate sources of debt or equity financing to pay unfunded operating expenses and fund long-term business operations; and |
| · | manage or control working capital requirements by controlling operating expenses. |
Management is attempting to raise additional capital via equity and debt offerings to sustain operations until it can market its services and achieve profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.
Cash Flows
| | Years Ended | | | | | | | |
| | December 31, | | | | | | | |
| | 2022 | | | 2021 | | | Change | | | % | |
Cash used in operating activities | | $ | (659,746 | ) | | $ | (900,934 | ) | | $ | 241,188 | | | (27 | %) |
Cash used in investing activities | | $ | (54,428 | ) | | $ | (7,500 | ) | | $ | (46,928 | ) | | | 626 | % |
Cash (used in) provided by financing activities | | $ | (42,000 | ) | | $ | 1,813,544 | | | $ | (1,855,544 | ) | | (102 | %) |
Cash and cash equivalents on hand | | $ | 210,508 | | | $ | 966,682 | | | $ | (756,174 | ) | | (78 | %) |
Operating activities
Net cash used in operating activities for the years ended December 31, 2022 and 2021 was $659,746 and $900,934, respectively. During the year ended December 31, 2022, we generated a net income of $2,182,100, which included significant non-cash expenses of $331,204 in debt discount amortization, $9,100 in stock-based compensation, gain on settlement of debt of $87,062, $6,350 in equipment amortization, and gain of $3,188,602 in change in fair value of derivative liabilities, as well as $87,164 in changes in operating assets and liabilities. During the year ended December 31, 2021, we generated a net income of $90,762,881, which included significant non-cash expenses of $430,868 in debt discount amortization, $253,183 in stock issued for compensation, gain on settlement of debt of $907, and gain of $92,504,847 in change in fair value of derivative liabilities, as well as $157,888 in changes in operating assets and liabilities.
Investing activities
During the year ended December 31, 2022, we purchased equipment and software for $54,428.
During the year ended December 31, 2021, net cash used in investing activities was from $7,500 in advances to a related party.
Financing activities
During the year ended December 31, 2022, net cash used in financing activities was $42,000, which consisted of $12,000 paid on convertible notes principal, $100,000 paid on notes payable principal and $70,000 in proceeds from issuance of convertible notes payable.
Net cash provided by financing activities for the year ended December 31, 2021 was $1,813,544, which consisted of $455,000 in proceeds from convertible notes payable, $1,247,950 from proceeds from issuance of common stock, $195,000 in proceeds from notes payable and ($84,406) in payment to settle debt.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or “U.S. GAAP.” The preparation of these financial statements in accordance with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, assumptions and judgments. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions and the impact of such differences may be material to our financial statements.
Critical accounting policies are those policies that, in management’s view, are most important in the portrayal of our financial condition and results of operations. The methods, estimates and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our financial statements. These critical accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Critical accounting estimates are those estimates made in accordance with U.S. GAAP that involve a significant level of estimation, uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operation. Those critical accounting policies and estimates that require the most significant judgment are discussed further below.
While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company’s significant accounting policies, refer to Note 2 of Notes to the Financial Statements.
Derivative Liability
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The valuation of derivative liabilities involves assumptions and estimates that are subject to uncertainty, such as the calculation of the Black Scholes volatility input. Volatility is primarily a function of the Company’s fluctuating common stock price, which is readily available. The Company cannot predict the extent to which the historical volatility of the Company’s common stock is indicative of future performance or valuation.
Stock-based Compensation
The Company issues stock, options and warrants as share-based compensation to employees and non-employees.
The Company accounts for its share-based compensation to employees and non-employees in accordance ASC 718. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. Options and warrants issued as compensation are often subject to Black Scholes pricing, which embodies the estimates and uncertainties mentioned under ‘Derivative Liability’ above.
Income Taxes
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods, the estimation of which is subject to uncertainties regarding the Company’s ability to successfully implement its business plan and generate sufficient revenues.
Off-Balance Sheet Arrangements
We have no 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 stockholders.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information under this Item.
Item 8. Financial Statements and Supplementary Data.
The information required by this Item is incorporated herein by reference to the financial statements and supplementary data set forth in Item 15. Exhibits, Financial Statement Schedules of Part IV of this Annual Report.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our CEO and our CFO, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022. Based on that evaluation, our CEO and our CFO concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were ineffective as of December 31, 2022 such that material information required to be disclosed is made known to management and others, as appropriate, to allow timely decision regarding required disclosure and that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Management’s Annual Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Management is responsible for establishing and maintaining adequate internal control over our financial reporting. Our President and Chief Financial Officer have evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations (COSO - 2013). Based on this evaluation, management concluded that, as of December 31, 2022, our internal control over financial reporting is ineffective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Based on the evaluation the effectiveness of our internal control, management identified the following material weaknesses:
| · | Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures. |
| · | Lack of Audit Committee: We do not have a functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. |
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting during the year ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
Our business and affairs are organized under the direction of our board of directors, which currently consists of three members.
Each of our directors holds office until the next annual meeting of our stockholders or until his or her successor has been elected and qualified, or until his or her earlier death, resignation, or removal. Our executive officers are appointed by our Board and serve until their respective successors are elected and appointed and qualify until their earlier resignation or removal from office.
Our current directors and executive officers, their ages, positions held, and duration of such, are as follows:
Name | | Position | | Age | | | Date of Appointment | |
Richard Ziccardi | | CFO and Director | | | 56 | | | 5/11/20 | |
Glenn Corso | | Director | | | 60 | | | 5/11/20 | |
Joseph A. Cosio-Barron | | CEO, President, CCO and Director | | | 73 | | | 7/22/20 | |
Richard Ziccardi - Chief Financial Officer, Board of Director
Mr. Ziccardi is a financial professional with over 30 years of experience in Banking, Insurance and Investments with a business focus on financial products. During his working career Mr. Ziccardi has held various roles including, but not limited to: Product Manager, LOB Controller, Chief of Staff, CAO, and Global Head of Revenue and RFP Pricing while supporting the servicing of Exchange Traded Funds, Mutual Funds, Hedge Funds, Private Equity, REITs and Variable Annuities. In these capacities, Mr. Ziccardi has worked on Mergers and Acquisition integrations, Client Profitability Modelling, Revenue Maximization, Sales and Client Engagement, New Product Development, Vendor Contract Negotiations, Efficiency and Expense Reduction Initiatives, Recruiting, Hiring, Training, Employee Engagement and Retention. From 2001 – 2020, Mr. Ziccardi was employed at the Bank of New York Mellon in various roles and titles including CAO and Managing Director, up to February 2020, Mr. Ziccardi was Global Head of Revenue Control - Asset Servicing. Mr. Ziccardi holds a Bachelor of Business Administration - Accounting - Hofstra University.
Glenn Corso - Chairman of the Board
Mr. Corso has over 40 years of experience in manufacturing and business operations in Diagnostic Medical and Industrial Real Time X- Ray equipment manufacturing companies. Glenn became President and CEO of Precise Optics/Photo Medic Equipment, Inc. in 1995 and President and CEO of Tecnomed USA (Bay Shore Medical Equipment Corp.) in 1990. Since 2000, Mr. Corso has owned and operated Consol Air, Inc., a company that owns and operates a Beechcraft Baron 58P which he charters for flights around the east coast. Mr. Corso worked in all aspects of the businesses from machine shop, inspection, assembly, design and production, regulatory oversight, technical writing, and ultimately management.
Joseph A. Cosio-Barron – CEO, President, Director of Compliance - Board of Director
Joseph A. Cosio-Barron is an accomplished professional with many years’ experience working within the intricacies of people management and regulatory legal compliance to ensure the viability of publicly held corporations listed on the stock exchanges.
From 2016 to 2019, Mr. Cosio-Barron served as President of Las Vegas Xpress, Inc., which provided passenger rail excursions in the U.S. From 2007 to 2016, Mr. Cosio-Barron served as Executive Vice President of Las Vegas Railway Express, Inc., which also provided passenger rail excursions in the U.S. From 2004 to 2007, Mr. Cosio-Barron served as President of Shearson Home Loans, a $1.3 billion national mortgage bank with 237 offices in 33 states and 1,450 employees. From 2002 to 2004, Mr. Cosio-Barron co-founded Liberty Capital, a $100 million asset management company based in Las Vegas, Nevada. From 1996 to 2002, Mr. Cosio-Barron served as the Managing Partner and President of CBS Consultants, Inc., a California Corporation which was a financial firm offering highly specialized services in development and lending for hotels, resorts, and casinos to include regulatory legal compliance. From 1991 to 1996, Mr. Cosio-Barron served as the Executive Vice President of Finet Holdings Corporation, a Delaware Corporation. As Executive Vice President, he was entirely responsible for the coordination of all regulatory legal compliance and the management of the sales of the staff for all the branch offices. From 1980 to 1990, Mr. Cosio-Barron served as President of Terra West Construction, a company, which he founded which in addition to building single-family subdivisions, strip, centers, duplex and four-plex units also developed syndications and formed limited partnerships for large-scale developments throughout California. From 1973 to 1980, Mr. Cosio-Barron served as Senior Vice-President of Multi-Financial Corporation, a California Corporation which was a real estate investment firm that both owned and managed commercial, retail, and residential income properties in Northern California.
Family Relationships
There are no family relationships among and between our directors, officers, persons nominated or chosen by the Company to become directors or officers, or beneficial owners of more than five percent (5%) of the any class of the Company’s equity securities.
Involvement in Certain Legal Proceedings
None of our directors and executive officers has been involved in any legal or regulatory proceedings, as set forth in Item 401 of Regulation S-K, during the past ten years.
Section 16(a) Beneficial Ownership Reporting Compliance
Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, our executive officers and directors and persons who own more than 10% of a registered class of our equity securities are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.
Code of Ethics
We expect that we will adopt a code of business conduct and ethics that applies to all our employees, officers and directors, including those officers responsible for financial reporting. Once adopted, we will make the code of business conduct and ethics available on our website at www.maptelligent.com. We intend to post any amendments to the code, or any waivers of its requirements, on our website.
Committees of the Board
The Company does not have an audit committee nor compensation committee because of the small size and early stage of the Company.
Nominating Committee
We do not have a separately designated nominating committee because the board makes all decisions regarding director nominations.
Indemnification of Directors and Officers
Section 145 of the Nevada General Corporation Law permits a corporation to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a pending or completed action, suit or proceeding if the officer or director acted in good faith and in a manner the officer or director reasonably believed to be in the best interests of the corporation.
Our certificate of incorporation provides that, except in certain specified instances, our directors shall not be personally liable to us or our stockholders for monetary damages for breach of their fiduciary duty as directors, except for the following:
· | any breach of their duty of loyalty to our company or our stockholders; |
· | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
· | unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; and |
· | any transaction from which the director derived an improper personal benefit. |
In addition, our certificate of incorporation and bylaws obligate us to indemnify our directors and officers against expenses and other amounts reasonably incurred in connection with any proceeding arising from the fact that such person is or was an agent of ours. Our bylaws also authorize us to purchase and maintain insurance on behalf of any of our directors or officers against any liability asserted against that person in that capacity, whether or not we would have the power to indemnify that person under the provisions of the Nevada General Corporation Law. We expect to continue to enter into agreements to indemnify our directors and officers as determined by our Board of Directors. These agreements provide for indemnification of related expenses including attorneys’ fees, judgments, fines, and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding, which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.
Insofar as the provisions of our certificate of incorporation or bylaws provide for indemnification of directors or officers for liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, we have been informed that in the opinion of the Commission this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth certain compensation awarded to, earned by, or paid to the following “named executive officers,” which is defined as follows:
| (a) | all individuals serving as our principal executive officer during the year ended December 31, 2022; and |
| | |
| (b) | each of our two other most highly compensated executive officers who were serving as executive officers at the end of the year ended December 31, 2022. |
We did not have any individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer as of the fiscal year ended December 31, 2022.
| | Fiscal | | Salary | | | Bonus | | | Stock Awards | | | Option Awards | | | Non-Equity Incentive Plan Compensation | | | All Other Compensation | | | Total | |
Name and Position | | Year | | ($) | | | ($) | | | ($)(1) | | | ($) | | | ($) | | | ($) | | | ($) | |
| | | | | | | | | | | | | | | | | | | | | | | |
Albert Koenigsberg(2) | | 2022 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Former CEO and President | | 2021 | | | 22,560 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 22,560 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Joseph A. Cosio-Barron(3) | | 2022 | | | 150,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 150,000 | |
CEO and President | | 2021 | | | 150,000 | | | | - | | | | 55,000 | | | | - | | | | - | | | | - | | | | 205,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Richard Ziccardi(4) | | 2022 | | | 150,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 150,000 | |
CFO and Treasurer | | 2021 | | | 150,000 | | | | - | | | | 46,667 | | | | - | | | | - | | | | - | | | | 196,667 | |
_________
(1) | For valuation purposes, the dollar amount shown is calculated based on the grant date fair value computed in accordance with FASB ASC Topic 718. The number of shares granted, the grant date, and the market price of such shares are set forth below. |
(2) | Albert Koenigsberg had served as our Chief Executive Officer and President from April 15, 2020 to February 28, 2021. |
(3) | Joseph A. Cosio-Barron has served as our Chief Executive Officer from February 28, 2021 through the present. Mr. Cosio-Barron was appointed a Director of the Board on July 27, 2020. |
(4) | Richard Ziccardi has served as our Chief Financial Officer from October 9, 2020 through the present. |
Employment Agreements
Joseph Cosio-Barron
On January 1, 2021, the start date of Joseph Cosio-Barron’s employment agreement with us, we entered into an Executive Agreement with Mr. Cosio-Barron (the “Agreement”), setting out his annual salary of $150,000 per year, plus the issuance of a bonus issuance of 2,000,000 shares of our Common Stock on the Agreement. On June 8, 2021, Mr. Cosio-Barron was issued 5,500,000 shares of our Common Stock as compensation. During the Term of this Agreement, Executive will be entitled to participate in an annual incentive compensation plan of the Company, as established and revised by the Board from time to time. The Agreement target annual bonus will be twenty five percent (25%) of your Base Salary in effect for such year (the “Target Bonus”), and the actual annual bonus may be more or less as determined by the Board of Directors, and will be determined based primarily upon (i) the achievement of certain corporate performance goals, as may be established and approved by from time to time by the Board of Directors, (ii) the achievement of personal performance goals as may be established by the CEO, and (iii) the overall goals and objectives of the Company. The annual bonus will only be paid at such time and in such manner as set forth in the annual incentive compensation plan document.
Richard Ziccardi
On January 1, 2021, the start date of Richard Ziccardi’s employment agreement with us, we entered into an Executive Agreement with Mr. Ziccardi (the “Agreement”), setting out his annual salary of $150,000 per year, plus the issuance of a bonus issuance of 2,000,000 shares of our Common Stock on the Agreement. On June 8, 2021 Mr. Ziccardi was issued 4,666,667 shares of our Common Stock as compensation. During the Term of this Agreement, Executive will be entitled to participate in an annual incentive compensation plan of the Company, as established and revised by the Board from time to time. The Agreement target annual bonus will be twenty five percent (25%) of your Base Salary in effect for such year (the “Target Bonus”), and the actual annual bonus may be more or less as determined by the CEO, and will be determined based primarily upon (i) the achievement of certain corporate performance goals, as may be established and approved by from time to time by the CEO, (ii) the achievement of personal performance goals as may be established by the CEO, and (iii) the overall goals and objectives of the Company. The annual bonus will only be paid at such time and in such manner as set forth in the annual incentive compensation plan document.
Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide retirement or similar benefits for our directors or executive officers.
Resignation, Retirement, Other Termination, or Change in Control Arrangements
We do not have any contracts, agreements, plans, or arrangements, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement, or other termination of our directors or executive officers, or a change in control of our company or a change in our directors’ or executive officers’ responsibilities following a change in control.
Director Summary Compensation Table
None
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth, as of March 31, 2023, certain information with respect to the beneficial ownership of shares of our Common Stock by (i) each of our directors (including director nominees), (ii) each of our named executive officers, (iii) our directors and executive officers as a group, and (iv) each stockholder known by us to be the beneficial owner of more than 5% of our outstanding Common Stock.
Name of Beneficial Owner(1) | | Total Common Stock Shares Beneficially Owned | | | % of Common Stock Class(2) | | | Total Series A Preferred Shares Owned(3) | | | % of Series A Class(2) | | | Total Series C Preferred Shares Owned | | | % of Series C Class(2) | | | Total % of Beneficial Ownership(5) | |
Directors and Officers: | | | | | | | | | | | | | | | | | | | | | |
Glenn Corso, Director | | | 2,125,000 | | | | 0.28 | | | | - | | | | - | | | | 4 | | | | 20 | % | | | 0.28 | % |
Richard Ziccardi, CFO, Director | | | 8,316,667 | | | | 1.10 | | | | - | | | | - | | | | 4 | | | | 20 | % | | | 1.10 | % |
Joseph Cosio-Baron, CEO, President, CCO, Director | | | 9,308,226 | | | | 1.24 | | | | - | | | | - | | | | - | | | | - | | | | 1.24 | % |
All executive officers and directors as a group (3 persons) | | | 19,749,893 | | | | 2.62 | | | | - | | | | - | | | | - | | | | 40 | % | | | | |
Five (5%) Percent Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Not Applicable | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
_______
| (1) | Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding. |
| | |
| (2) | Based upon (i) 753,377,447 shares of Common Stock outstanding, (ii) 98,796 shares of Series A outstanding, and (iii) 20 shares of Series C outstanding as of March 31, 2023. |
| | |
| (3) | Each share of Series A Preferred Stock is entitled to no voting rights and each share of Series A Preferred Stock is convertible into one share of Common Stock. |
| | |
| (4) | Each share of Series C Preferred Stock are not convertible and has voting rights equal to four times the sum of total common stock shares issued and outstanding plus the total number of preferred series B, A and A-2 that are issued and outstanding. |
| | |
| (5) | Based on 753,476,263 shares calculated on fully diluted basis. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
No director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction during the year ended December 31, 2022 or 2021, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years:
There are 3 directors of which 1 is an independent director and 2 are officers, using the NASDAQ definition of independence.
Item 14. Principal Accountant Fees and Services.
The aggregate fees billed for the most recently completed fiscal year ended December 31, 2022, and for fiscal year ended December 31, 2021, for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Fee Category | | Year Ended December 31, 2022 | | | Year Ended December 31, 2021 | |
| | | | | | |
Audit Fees | | $ | 26,500 | | | $ | 29,600 | |
Audit-Related Fees | | | - | | | | - | |
Tax Fees | | | - | | | | - | |
All Other Fees | | | | | | | - | |
Total Fees | | $ | 26,500 | | | $ | 29,600 | |
See accompanying notes to these audited financial statements.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
NOTE 1 - DESCRIPTION OF BUSINESS:
The Company is a Nevada corporation, originally formed as a Utah corporation under the name State Cycle, Inc. on August 7, 1974. The Company re-domiciled to the state of Nevada and changed its name to X Rail Enterprises, Inc. on November 5, 2015, at which time its primary business changed from mining to rail transportation, passenger excursions, rail car construction and rail related operations and services. Effective November 4, 2017, the Company changed its name to Las Vegas Xpress, Inc. On April 13, 2020, the Company entered into an asset purchase agreement (the “Agreement”) with an entity affiliated with the Company’s CEO, whereby the Company would acquire certain intellectual property in connection with a planned change in business to assist first responders with data access and transfer in times of crisis using geospatial technology.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Financial Statement Presentation:
The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Revenue Recognition:
The Company recognizes revenue from the sale of services in accordance with ASC 606, “Revenue Recognition,” only when all of the following criteria have been met:
| (i) | Identify the contract(s) with a customer; |
| (ii) | Identify the performance obligations in the contract(s); |
| (iii) | Determine the transaction price; |
| (iv) | Allocate the transaction price to the performance obligations in the contract(s); |
| (v) | Recognize revenue when the Company satisfies a performance obligation. |
The Company did not engage in any revenue-generating activities during the years ended December 31, 2022 and 2021.
Risks and Uncertainties:
The Company operates in an industry that is subject to some competition and could have a materially adverse impact on the Company’s operations.
Use of Estimates:
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Amounts could materially change in the future.
Cash and Cash Equivalents:
The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents. As of December 31, 2022 and 2021, the Company had $110,403 and $866,627 in cash, respectively, and $100,105 and $100,055 of cash equivalents.
Basic and Diluted Income (Loss) Per Share:
In accordance with ASC 260, “Earnings per Share,” the basic income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings (loss) per share reflect per share amounts that would have resulted if potentially dilutive common stock equivalents had been converted to common stock.
Income Taxes:
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods.
The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of December 31, 2022 and 2021, the Company has not established a liability for uncertain tax positions.
Share Based Payment:
The Company issues stock, options and warrants as share-based compensation to employees and non-employees.
The Company accounts for its share-based compensation to employees and non-employees in accordance with ASC 718. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period.
During the years ended December 31, 2022 and 2021, the Company incurred $9,100 ($400 gain on settlement for $8,700 net) and $253,183, respectively, in stock-based compensation to employees and consultants, for which it issued 2,450,000 and 20,986,734, respectively, shares of common stock.
Fair Value of Financial Instruments:
The Company follows ASC 820, “Fair Value Measurements”, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.
The three-level hierarchy for fair value measurements is defined as follows:
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement
The following table summarizes fair value measurements by level, measured at fair value on a recurring basis:
December 31, 2022 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Liabilities | | | | | | | | | | | | |
Derivative Liabilities | | $ | - | | | $ | - | | | $ | 1,756,192 | | | $ | 1,756,192 | |
| | | | | | | | | | | | | | | | |
December 31, 2021 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Liabilities | | | | | | | | | | | | | | | | |
Derivative Liabilities | | $ | - | | | $ | - | | | $ | 5,159,248 | | | $ | 5,159,248 | |
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Equipment
Equipment, consisting of geospatial scanners and software is reported at cost less accumulated depreciation and impairment, if any. Depreciation expense is recognized over the assets’ estimated useful lives of five years using the straight-line method. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company has early adopted the ASU and determined that there has been no material impact to the financial statements.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company used net cash in operating activities of $659,746 for the year ended December 31, 2022, and had an accumulated deficit of $36,700,394 and a negative working capital of $2,583,262 as of December 31, 2022. Management believes that it will need additional equity or debt financing to be able to implement its business plan. Given the lack of revenue, capital deficiency and negative working capital, there is substantial doubt about the Company’s ability to continue as a going concern.
While we expect the impacts of COVID-19 may have an adverse effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time.
Management is attempting to raise additional equity and debt to sustain operations until it can market its services and achieve profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.
The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 - EQUIPMENT
December 31, 2022 | | | December 31, 2021 | |
Cost | | | Accumulated Depreciation | | | Net Book Value | | | Cost | | | Accumulated Depreciation | | | Net Book Value | |
| $ | 50,753 | | | $ | (5,921 | ) | | $ | 44,832 | | | $ | - | | | $ | - | | | $ | - | |
| 3,675 | | | | (429 | ) | | | 3,246 | | | | | | | | | | | | | |
| $ | 54,428 | | | $ | (6,350 | ) | | $ | 48,078 | | | $ | - | | | $ | - | | | $ | - | |
Depreciation expense for the years ending December 31, 2022 and 2021, was $6,350 and $0, respectively.
NOTE 5 - NOTES PAYABLE
Notes payable
As of December 31, 2022 and 2021, the Company has notes payable as follows:
| | December 31, | | | December 31, | |
| | 2022 | | | 2021 | |
| | | | | | |
Notes payable | | $ | 340,000 | | | $ | 440,000 | |
| | | 340,000 | | | | 440,000 | |
Less debt discount | | | - | | | | (55,292 | ) |
Total outstanding notes payable | | $ | 340,000 | | | $ | 384,708 | |
During the years ended December 31, 2022 and 2021, the Company made repayments of $100,000 and $0, respectively, recorded debt discount amortization of $55,292 and $111,886, respectively, and interest expense of $50,170 and $49,907, respectively. As of December 31, 2022 and 2021, the Company had accrued interest of $101,668 and $51,498, respectively.
Notes payable issued in Fiscal year 2020
On December 10, 2020 (the “Closing Date”), the Company entered into a Securities Purchase Agreement (the “SPA”), pursuant to which the Company purchased two promissory notes, each with a principal amount of $220,000, for a total principal amount of $440,000. The first Note (“Initial Note”) was issued by the Company on the Closing Date and second Note was issued in February 2021. The Initial Note has an interest rate of 12% per annum and a maturity date of June 10, 2022. The Company received $195,000 from the Initial Note and recorded $25,000 as debt discount. In addition to the Initial Note, on the Closing Date, the Company issued a warrant (“Warrant”) to acquire 146,667 shares of Common Stock at an exercise price of $1.50 per share. The Warrant contains a cashless exercise provision and expires on the fifth anniversary of the Warrant’s issuance date. The Company identified conversion features embedded within warrants issued during the period ended December 31, 2020. The Company has determined that the conversion feature of the Warrants represents an embedded derivative since the conversion price includes a reset provision which could cause adjustments upon conversion. The Company accounted for the issuance of the Warrants as a derivative and recorded derivative liability of $92,400 as debt discount. During the year ended December 31, 2020, the Company recorded amortization of discount of $6,755. Any amount of Principal or Interest on the Initial Note which is not paid when due shall bear interest at the rate of the lesser of twenty-four percent (24%) per annum and the maximum amount permitted under law from the due date thereof until the same is paid. In October of 2022, the Initial Note was amended for payments to be made: $50,000 in October 2022, $50,000 in December 2022 and $120,000 plus all accrued interest in March 2023. As of December 31, 2022 the October payment was made, the December scheduled payment was not made and the Note is in default.
Notes payable issued in Fiscal year 2021
On February 10, 2021, the second note payable (“Second Note”), as part of the Securities Purchase Agreement entered into on the Closing Date was issued. The Second Note has an interest rate of 12% per annum and a maturity date of August 10, 2022. The Company received $195,000 and recorded $25,000 as debt discount. In addition, the Company issued a warrant to acquire 146,667 shares of Common Stock at an exercise price of $1.50 per share. The Company has determined that the conversion feature of the Warrants represents an embedded derivative since the conversion price includes a reset provision which could cause adjustments upon conversion. The Company accounted for the issuance of the Warrants as a derivative and recorded derivative liability of $31,533 as debt discount. During the year ended December 31, 2021, on the two notes the Company recorded total amortization of debt discount of $111,886. Any amount of Principal or Interest on the Second Note which is not paid when due shall bear interest at the rate of the lesser of twenty-four percent (24%) per annum and the maximum amount permitted under law from the due date thereof until the same is paid. In October of 2022, the Second Note was amended for payments to be made: $50,000 in October 2022, $50,000 in December 2022 and $120,000 plus all accrued interest in March 2023. As of December 31, 2022 the October payment was made, the December scheduled payment was not made and the Note is in default.
NOTE 6 - CONVERTIBLE NOTES PAYABLE
The Company has convertible notes payable as follows:
| | December 31, | | | December 31, | |
| | 2022 | | | 2021 | |
| | | | | | |
Promissory note, dated June 2, 2017, bearing interest of 4% annually, payable within a year | | $ | 18,260 | | | $ | 18,260 | |
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand | | | - | | | | 12,000 | |
Promissory note, dated January 5, 2018, bearing interest of 10% annually, payable on July 5, 2018 | | | 33,249 | | | | 33,249 | |
Promissory note, dated April 20, 2018, bearing interest of 12% annually, payable on April 20, 2019 | | | 50,000 | | | | 50,000 | |
Promissory note, dated April 30, 2018, bearing interest of 12% annually, payable on April 30, 2019 | | | 50,000 | | | | 50,000 | |
Promissory note, dated November 23, 2020, bearing interest of 10% annually, payable on November 23, 2021 | | | 200,000 | | | | 200,000 | |
Promissory note, dated February 12, 2021, bearing interest of 10% annually, payable on February 12, 2022 | | | 50,000 | | | | 50,000 | |
Promissory note, dated March 29, 2021, bearing interest of 10% annually, payable on March 29, 2022 | | | 100,000 | | | | 100,000 | |
Promissory note, dated August 2, 2021, bearing interest of 10% annually, payable on August 2, 2022 | | | - | | | | 53,750 | |
Promissory note, dated August 30, 2021, bearing interest of 10% annually, payable on August 30, 2022 | | | - | | | | 38,750 | |
Promissory note, dated October 14, 2021, bearing interest of 10% annually, payable on October 14, 2022 | | | - | | | | 43,750 | |
Promissory note, dated November 8, 2021, bearing interest of 10% annually, payable on November 8, 2022 | | | - | | | | 43,750 | |
Promissory note, dated December 27, 2021, bearing interest of 10% annually, payable on December 27, 2022 | | | - | | | | 43,750 | |
Promissory note, dated April 29, 2022, bearing interest of 10% annually, payable on April 29, 2023 | | | 12,750 | | | | - | |
Promissory note, dated July 14, 2022, bearing interest of 10% annually, payable on July 14, 2023 | | | 39,250 | | | | - | |
Convertible notes before debt discount | | | 553,509 | | | | 737,259 | |
Less debt discount | | | (15,253 | ) | | | (44,826 | ) |
Total outstanding convertible notes payable | | $ | 538,256 | | | $ | 692,433 | |
During the years ended December 31, 2022 and 2021, the Company made principal payments of $12,000 and $0, respectively, and recognized interest expense of $61,070 and $49,907 and amortization of debt discount, included in interest expense, of $275,912 and $318,982, respectively.
During the year ended December 31, 2022 and 2021 we had $2,651 and $0, respectively, of accrued interest recorded as a gain on settlement of debt. As of December 31, 2022 and 2021, the Company recorded accrued interest of $146,190 and $100,210, respectively.
Conversion
During the year ended December 31, 2022, the Company converted convertible note principal of $249,750 and accrued interest of $11,189 for total debt of $260,939 into 272,187,390 shares of common stock. The corresponding derivative liabilities at the dates of conversion of $452,793, of which $84,011 was included in gain on settlement of debt in the statement of operations and statement of cash flows, were settled through additional paid in capital.
The Company has entered into various convertible notes with variable conversion rates that create derivative liabilities. A description of outstanding convertible notes payable is as follows:
Promissory Notes - Issued in fiscal year 2017
During the year ended December 31, 2017, the Company issued a total of $265,900 of notes with the following terms:
| · | Terms ranging from 9 months to 12 months. Certain note is due on demand. |
| · | Annual interest rates of 4% - 12%. |
| · | Convertible at the option of the holders at issuance. |
| · | Conversion prices are typically based on the discounted (35 - 50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion, the closing sale price. |
| · | Certain notes are currently in default. Default interest rates are 24%. |
Promissory Notes - Issued in fiscal year 2018
During the year ended December 31, 2018, the Company issued a total of $325,000 of notes with the following terms:
| · | Terms ranging from 6 months to 12 months. |
| · | Annual interest rates of 8% - 12%. |
| · | Convertible at the option of the holders at issuance. |
| · | Conversion prices are typically based on the discounted (25 - 50% discount) average closing prices or lowest trading prices of the Company’s shares during various periods prior to conversion. Certain note has a fixed conversion price of $0.0001. |
| · | Notes are currently in default. Default interest rates are 24%. |
Promissory Notes - Issued in fiscal year 2020
During the year ended December 31, 2020, the Company issued a note of $100,000 with the following terms:
| · | Term is 12 months. |
| · | Annual interest rate of 10%. |
| · | Convertible at the option of the holders at issuance. |
| · | Conversion price is the lesser of a) $0.40 or b) 50% of the lowest Trading Price during 20 trading days |
During the year ended December 31, 2021, the Company issued an additional tranche of $100,000.
Promissory Notes - Issued in fiscal year 2021
During the year ended December 31, 2021, the Company issued a total of $373,750 in notes with the following terms:
| · | Term is 12 months. |
| · | Annual interest rate of 10%. |
| · | Convertible at the option of the holders at issuance. |
| · | Conversion price is the lesser of a) $0.10 or b) 50% of the lowest Trading Price during 20 trading days or Conversion price is 65% of the lowest Trading Price during 10 trading days. |
The notes include original issue discounts and financing costs of $18,750 and the Company received cash of $355,000.
Promissory Notes - Issued in fiscal year 2022
During the year ended December 31, 2022, the Company issued a total of $78,000 in notes with the following terms:
| · | Term is 12 months. |
| · | Annual interest rate of 10%. |
| · | Convertible at the option of the holders at issuance. |
| · | Conversion price is 65% of the lowest Trading Price during 10 trading days. |
The notes include original issue discounts and financing costs of $8,000 and the Company received cash of $70,000.
Derivative liabilities
The Company determined that the exercise feature of the warrants met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company bifurcates the embedded conversion option in the notes once the notes become convertible and account for it as a derivative liability. The fair value of the warrants was recorded as a debt discount being amortized to interest expense over the term of the note.
The Company assessed its convertible notes in accordance with ASC 815 and determined there were derivative liabilities associated with the convertible notes when they become convertible.
The Company valued the conversion features using the Black Scholes valuation model. The fair value of the derivative liability for all the notes and warrants that became convertible for the year ended December 31, 2022 amounted to $305,707. $238,339 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $67,368 was recognized as a “day 1” derivative loss. The fair value of the derivative liability for all the notes and warrants that became convertible for the year ended December 31, 2021 amounted to $606,699. $250,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $356,699 was recognized as a “day 1” derivative loss.
NOTE 7 - WARRANTS
During the year ended December 31, 2021, the Company issued 146,667 warrants with an exercise price of $1.50 per common share, for a period of 5 years (Note 5).
The Company determined that the warrants qualify for derivative accounting as a result of the reset feature, which led to no explicit limit to the number of shares to be delivered upon future settlement of the conversion options.
The following summarizes the Company’s warrant activity:
| | | | | Weighted average | | | Weighted average | |
| | Warrants | | | exercise price | | | remaining life (Year) | |
Outstanding - December 31, 2020 | | | 146,667 | | | $ | 1.50 | | | | 4.95 | |
| | | | | | | | | | | | |
Granted | | | 146,667 | | | | 1.50 | | | | 5.00 | |
Outstanding - December 31, 2021 | | | 293,334 | | | $ | 1.50 | | | | 4.03 | |
| | | | | | | | | | | | |
Granted | | | - | | | | - | | | | - | |
Outstanding - December 31, 2022 | | | 293,334 | | | $ | 1.50 | | | | 3.03 | |
The intrinsic value of the warrants as of December 31, 2022 is $0. All of the outstanding warrants are exercisable as of December 31, 2022.
NOTE 8 - DERIVATIVE INSTRUMENTS
The Company analyzed the conversion options in its convertible notes and warrants for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the instrument should be classified as a liability since the discounted variable-rate conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.
Fair Value Assumptions Used in Accounting for Derivative Liabilities.
ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of December 31, 2022. The Black-Scholes model requires six basic data inputs: the exercise or strike price, expected time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.
The estimated fair values of the liabilities measured on a recurring basis are as follows:
| | Year Ended | | Year Ended | |
| | December 31, | | December 31, | |
| | 2022 | | 2021 | |
Expected life in years | | 0.82 - 3.37 years | | 0.12 - 5 years | |
Stock price volatility | | 161% - 1,007 % | | 135% - 1,456 % | |
Discount rate | | 0.97% - 4.25% | | 0.04% - 1.26% | |
Expected dividends | | None | | None | |
The following table summarizes the changes in the derivative liabilities:
Fair Value Measurements Using Significant Observable Inputs (Level 3) | |
| | | |
Balance - December 31, 2020 | | $ | 102,361,488 | |
| | | | |
Addition of new derivatives recognized as debt discounts | | | 281,533 | |
Addition of new derivatives recognized as loss on derivatives | | | 356,699 | |
Settled upon conversion of debt | | | (4,978,926 | ) |
Gain on change in fair value of the derivative | | | (92,861,546 | ) |
Balance - December 31, 2021 | | $ | 5,159,248 | |
| | | | |
Addition of new derivatives recognized as debt discounts | | | 238,339 | |
Addition of new derivatives recognized as loss on derivatives | | | 67,368 | |
Settled upon conversion of debt | | | (452,793 | ) |
Gain on change in fair value of the derivative | | | (3,255,970 | ) |
Balance - December 31, 2022 | | $ | 1,756,192 | |
The aggregate gain on derivatives was as follows:
| | December 31, | | | December 31, | |
| | 2022 | | | 2021 | |
Addition of new derivatives recognized as loss on derivatives | | $ | 67,368 | | | $ | 356,699 | |
Change in fair value of the derivative | | | (3,255,970 | ) | | | (92,861,546 | ) |
Net aggregate gain | | $ | (3,188,602 | ) | | $ | (92,504,847 | ) |
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company takes exemption from ASC 842, “Leases,” as it rents an office at 2831 St. Rose Pkwy, Henderson, Nevada on month-to-month basis for $75 a month.
Litigation
On July 15, 2022, the Company filed a lawsuit with the Eight Circuit District Court in Clark County, Nevada, naming Albert Koenigsberg and Geocommand, Inc. as defendants. The Company is seeking relief for breach of contract, breach of the covenant of good faith and fair dealing, conversion, unjust enrichment, and breach of fiduciary duty. The Company’s allegations include, among other claims, that Mr. Koenigsberg, during his prior time as an executive of the Company, utilized unauthorized funds, entered into improper agreements, and unaccounted for the Company’s finances.
On or about December 30, 2022, the Company was successful in obtaining a judgment against Geocommand, solely, for the principal sum of $43,500 plus interest and fees of $13,821 for total judgment of $57,321. Due to the inherent uncertainties in litigation proceedings, the Company will recognize the income from the judgment once the proceeds are received, in accordance with ASC 450, Contingencies. While the Company believes it will prevail in the Koenigsberg portion of the case before the court, no assurances can be made as to the final outcome.
NOTE 10 - EQUITY
Authorization of Common and Preferred Stock
The Company is authorized to issue 10,000,000,000 shares of common stock and 1,000,000 shares of preferred A (each share convertible on one for one base for common stock, no voting rights), 10,000 shares of preferred A-2 (each share convertible into four times the sum of all shares of common stock issued and outstanding with the same voting rights), 1,000,000 shares of preferred B (each share convertible into 10 shares of common stock and has 10 votes for any election) and 1,000 shares of preferred C (each share is not convertible and has voting rights equal to four times the sum of total common stock shares issued and outstanding plus the total number of series B, A and A-2 that are issued and outstanding).
Preferred A Stock
As of December 31, 2022 and 2021, 98,796 shares of the Company’s Preferred A Stock were issued and outstanding.
Preferred C Stock
As of December 31, 2022 and 2021, 20 shares of the Company’s Preferred C Stock were issued and outstanding.
Common Stock
During the year ended December 31, 2022, the Company issued 277,262,390 common shares as follows:
| · | 272,187,390 shares of common stock for conversion of debt of $260,939. |
| · | 4,850,000 shares of common stock for current year compensation (2,450,000 shares) of $8,700 and stock payable for prior year compensation (2,400,000 shares) of $24,500. |
| · | 225,000 shares of common stock for payment of accounts payable of $1,800. |
Stock Payable
As of December 31, 2022 and 2021, the Company reported stock payable of $0 and $24,500, respectively, which is 0 and 2,400,000 shares to be issued, respectively.
NOTE 11 - NET INCOME (LOSS) PER COMMON SHARE
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods. Diluted net income per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of convertible preferred stock and convertible notes that are computed using the if-converted method, and outstanding warrants that are computed using the treasury stock method. Antidilutive stock awards consist of stock options that would have been antidilutive in the application of the treasury stock method.
| | Years Ended | |
| | December 31, | |
| | 2022 | | | 2021 | |
Numerator: | | | | | | |
Net income (loss) | | $ | 2,182,100 | | | $ | 90,762,881 | |
(Gain) loss on change in fair value of derivatives | | | (3,188,602 | ) | | | (92,504,847 | ) |
Interest on convertible debt | | | 61,070 | | | | 65,342 | |
Net income (loss) - diluted | | $ | (945,432 | ) | | $ | (1,676,624 | ) |
| | | | | | | | |
Denominator: | | | | | | | | |
Weighted average common shares outstanding | | | 382,160,349 | | | | 132,026,785 | |
Effect of dilutive shares | | | 3,181,529,790 | | | | 649,996,742 | |
Diluted | | | 3,563,690,139 | | | | 782,023,527 | |
| | | | | | | | |
Net income (loss) per common share: | | | | | | | | |
Basic | | $ | 0.01 | | | $ | 0.69 | |
Diluted | | $ | (0.00 | ) | | $ | (0.00 | ) |
For the years ended December 31, 2022 and 2021, the convertible instruments and warrants are anti-dilutive and therefore, have been excluded from earnings (loss) per share.
NOTE 12 - INCOME TAXES
The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods.
The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of December 31, 2022 and 2021, the Company has not established a liability for uncertain tax positions.
Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities. The Company has no liabilities related to uncertain tax positions or unrecognized benefits as of December 31, 2022 or 2021. The Company has not accrued for interest or penalties associated with unrecognized tax liabilities.
As of December 31, 2022, the Company had net operating loss carry forwards of approximately $16 million, which may be available to offset future taxable income for tax purposes. This carry forward may be limited upon the ownership change under IRC Section 382.
The Components of the deferred tax asset at December 31, 2022 and 2021 are as follows:
| | 2022 | | | 2021 | |
Net Operating loss carry forward | | $ | 3,304,000 | | | $ | 3,164,000 | |
Valuation allowance | | | (3,304,000 | ) | | | (3,164,000 | ) |
Total deferred tax asset | | $ | - | | | $ | - | |
A reconciliation of the effective Federal tax expense to the amount derived by applying the Federal Statutory rate to pretax loss for 2022 and 2021:
| | 2022 | | | 2021 | |
Pretax loss(income) at Federal Statutory rate of 21% | | $ | (458,000 | ) | | $ | (19,060,000 | ) |
Non-deductible differences | | | 598,000 | | | | 19,282,000 | |
Change in valuation allowance | | | (140,000 | ) | | | (222,000 | ) |
Net tax expense (benefit) | | $ | - | | | $ | - | |
The tax years from 2015 forward are open for examination by the Internal Revenue Service.
NOTE 13 – OTHER RECEIVABLES
During the year ended December 31, 2020 the Company issued 4,835,420 shares of commons stock for $716,242, of which the Company received cash of $467,900 and a promissory note receivable from a former officer of $248,342. During the year ended December 31, 2020, $11,600 was transferred to the Company, $78,479 was used for payments of operating expenses, and $6,221 was used to settle debt with former related parties. As of December 31, 2022 and 2021, the former officer was not considered a related party and the Company recorded a note receivable of $152,042, which is due on demand and bears no interest.
As of December 31, 2022 and 2021, the Company had a short-term loan due from a former related party of $41,000 and $41,000, respectively. The short-term loan is non-bearing interest and due on demand.
| | December 31, | | | December 31, | |
| | 2022 | | | 2021 | |
Note receivable | | $ | 152,042 | | | $ | 152,042 | |
Short-term loan receivable, net | | | 41,000 | | | | 41,000 | |
Total other receivables | | $ | 193,042 | | | $ | 193,042 | |
NOTE 14 - SUBSEQUENT EVENTS
The Company analyzed events occurring subsequent to December 31, 2022 through the date these financial statements were issued and noted the following items requiring disclosure:
On January 19, 2023, $6,150 of principle of a convertible note was converted at $0.00026 to 23,653,846 common shares.
On January 25, 2023, $6,600 of principle of a convertible note was converted at $0.00026 to 25,384,615 common shares.
On January 31, 2023, $1,937.50 of interest of a convertible note was converted at $0.00026 to 7,451,923 common shares.
On February 01, 2023, $6,750 of principle of a convertible note was converted at $0.00026 to 25,961,539 common shares.
On February 07, 2023, $6,760 of principle of a convertible note was converted at $0.00026 to 26,000,000 common shares.
On February 14, 2023, $6,760 of principle of a convertible note was converted at $0.00026 to 26,000,000 common shares.
On February 22, 2023, $8,100 of principle of a convertible note was converted at $0.00026 to 31,153,846 common shares.
On March 01, 2023, $6,300 of principle of a convertible note was converted at $0.00020 to 31,500,000 common shares.
On March 08, 2023, $4,580 of principle and $1,962 interest of a convertible note was converted at $0.00020 to 32,712,500 common shares.