Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors
of Sollensys Corp.
Opinion on the Financial Statements
We have audited the accompanying balance
sheets of Sollensys Corp. (the "Company") as of March 31, 2020 and 2019, the related statements of operations, stockholders'
equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of March 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable
basis for our opinion.
Substantial Doubt about the Company’s
Ability to Continue as a Going Concern
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the
Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor
since 2020
Lakewood, CO
April
29, 2020
The accompanying
notes are an integral part of the consolidated financial statements.
The accompanying
notes are an integral part of the consolidated financial statements.
The accompanying
notes are an integral part of the consolidated financial statements.
The accompanying
notes are an integral part of the consolidated financial statements.
NOTES
TO FINANCIAL STATEMENTS
FOR
THE YEARS ENDED MARCH 31, 2020 AND 2019
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Sollensys
Corp. (“Sollensys” or the “Company”), was formerly a development stage company, incorporated on September
29, 2010, under the laws of the State of Nevada. Initial plans included organization and incorporation, target market identification,
marketing plans, and capital formation. A substantial portion of the Company’s efforts involved developing a business plan
and establishing contacts and visibility in the marketplace. The Company has not generated any revenues since inception. Effective
July 30, 2012, the holder of 3,000,000 shares, or approximately 79.8% of Sollensys Corporation, (the “Company”) then
outstanding voting securities, executed a written consent in accordance with Section 78.320 of the NRS, approving the amendment
to the Articles of Incorporation to change the Company’s name to Sollensys Corp. and increase the common shares authorized
to 1,500,000,000 and increase the preferred shares authorized to 25,000,000, and to split each outstanding share of common stock
into 131.69 shares of common stock.
The
Company has been dormant since September 30, 2012.
On
December 27, 2019, the Eighth Judicial District Court of Clark County Nevada, pursuant to Case number A-19-805633-B appointed
Custodian Ventures, LLC as the custodian of Sollensys Corp. David Lazar, who controls Custodian Ventures was subsequently named
the only interim officer and director of the Company and is considered a related party for the purposes of financial statement
presentation
The
Company’s accounting year-end is December 31.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”)
“FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements
in conformity with generally accepted accounting principles (“GAAP”) in the United States.
Going
Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following
the date of these financial statements. The Company has incurred significant operating losses since inception. As of March 31,
2020, the company had a working capital deficit of $111,871 and negative shareholders’ equity of $613,946.
Because
the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this
raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to
raise additional funds and is currently exploring alternative sources of financing. Historically, the Company has raised capital
through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital
through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue
to so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common
stock to maximize working capital, and intends to continue this practice where feasible.
Use
of Estimates
The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of 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 reporting period. The most significant estimates relate to income
taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other
assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements.
The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that
are not readily apparent from other sources. Actual results could differ from these estimates.
Revenue
Recognition
We
have not generated any revenue since inception.
On
January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with
Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As
of and for the year ended March 31, 2020, the financial statements were not materially impacted as a result of the application
of Topic 606 compared to Topic 605.
Cash
and cash equivalents
The
Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.
On March 31, 2020, and March 31, 2019, the Company’s cash equivalents totaled $0 and $0 respectively.
Income
taxes
The
Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740,
deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC
740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken
in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon
examination by taxing authorities.
The
amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate
settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts
or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability
under audit.
Stock-based
Compensation
The
Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of
the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity
to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair
value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required
to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost
is recognized for equity instruments for which employees do not render the requisite service.
Net
Loss per Share
Net
loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as
defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”)
calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during
the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number
of common shares and dilutive common share equivalents outstanding.
Recent
Accounting Pronouncements
In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model
for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating
leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB
issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB
issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU
2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease
standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective
date and transition requirements as the new lease standard.
We
adopted ASC 842 on January 1, 2019. The adoption of this guidance did not have any impact on our financial statements.
NOTE
3 – LOANS PAYABLE RELATED PARTY
During
the year ended March 31, 2020, the Company’s operating expenses of $26,100 was funded by the Company’s Court-appointed
custodian in the form of an interest-free demand loan for the same amount.
NOTE
4 – STOCKHOLDERS EQUITY
Preferred
Stock Series A
On
March 21, 2020, the Company filed a Certificate of Designation to authorize 10,000,000 shares of Series A Preferred Stock (“Series
A”). Among other rights, the holders of Series A preferred shares shall have the right to convert each share of Series A
into one share of common stock at a conversion price of $0.0002. There were no Series A shares issued and outstanding as of March
31, 2020.
Common
Stock
The
Company has authorized 1,500,000,000 shares of $0.001 common stock. As of March 31, 2020, and March 31, 2019, respectively, there
were 502,075,402 shares issued and outstanding.
NOTE
5 – COMMITMENTS AND CONTINGENCIES
The
Company did not have any contractual commitments of March 31, 2020, and 2019
NOTE
9 – SUBSEQUENT EVENTS
In
accordance with ASC 855-10 management has evaluated subsequent events from March 31, 2020, through the date the financial
statements were available to be issued and has determined that there are no items requiring disclosure.