Item
1. Financial Statements.
VIVA ENTERTAINMENT GROUP INC.
|
Condensed Balance Sheets
|
|
|
|
April 30,
2017
|
|
October 31,
2016
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
372
|
|
|
|
$
|
385
|
|
Total Current Assets
|
|
|
372
|
|
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
Software, net of amortization of $10,571 and $7,131
|
|
|
57,982
|
|
|
|
|
61,422
|
|
Total Assets
|
|
$
|
58,354
|
|
|
|
$
|
61,807
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts Payable and Accrued Liabilities
|
|
$
|
263,549
|
|
|
|
$
|
189,024
|
|
Accrued Interest
|
|
|
69,308
|
|
|
|
|
43,426
|
|
Accrued Salary and Wages
|
|
|
329,840
|
|
|
|
|
148,242
|
|
Notes Payable
|
|
|
—
|
|
|
|
|
100,000
|
|
Related Party Payable
|
|
|
37,060
|
|
|
|
|
—
|
|
Convertible Notes Payable, net of discount
|
|
|
545,779
|
|
|
|
|
367,323
|
|
Derivative Liability
|
|
|
1,064,233
|
|
|
|
|
1,248,689
|
|
Total Current Liabilities
|
|
|
2,309,769
|
|
|
|
$
|
2,096,704
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock (2,400,000,000 shares authorized, par value 0.00001, 926,810,436 and 130,166,696 shares issued and outstanding at April 30, 2017 and October 31, 2016, respectively)
|
|
|
9,268
|
|
|
|
|
1,302
|
|
Stock payable
|
|
|
12,600
|
|
|
|
|
512,400
|
|
Additional paid-in capital
|
|
|
13,106,133
|
|
|
|
|
2,204,879
|
|
Accumulated deficit
|
|
|
(15,379,416
|
)
|
|
|
|
(4,753,478
|
)
|
Total Stockholders’ Deficit
|
|
|
(2,251,415
|
)
|
|
|
|
(2,034,897
|
)
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
58,354
|
|
|
|
$
|
61,807
|
|
|
|
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of These Financial Statements
|
VIVA ENTERTAINMENT GROUP INC.
Condensed Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended April 30, 2017
|
|
For the Three Months Ended April 30, 2016
|
|
For the Six Months Ended April 30, 2017
|
|
For the Six Months Ended April 30, 2016
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting services
|
|
$
|
6,640
|
|
|
$
|
—
|
|
|
|
32,305
|
|
|
$
|
—
|
|
General and administrative
|
|
|
484,044
|
|
|
|
—
|
|
|
|
576,085
|
|
|
|
—
|
|
Wages
|
|
|
8,768,449
|
|
|
|
—
|
|
|
|
8,887,291
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
9,259,133
|
|
|
|
—
|
|
|
|
9,495,681
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement of debt
|
|
|
420
|
|
|
|
—
|
|
|
|
11,010
|
|
|
|
—
|
|
Derivative expenses
|
|
|
11,927
|
|
|
|
—
|
|
|
|
(250,928
|
)
|
|
|
—
|
|
Interest expense
|
|
|
(400,332
|
)
|
|
|
—
|
|
|
|
(890,338
|
)
|
|
|
—
|
|
Total other expense
|
|
|
(387,985
|
)
|
|
|
—
|
|
|
|
(1,130,256
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
|
(9,647,118
|
)
|
|
$
|
—
|
|
|
|
(10,625,937
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share – Basic and Diluted
|
|
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
(0.02
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding
|
|
|
794,350,790
|
|
|
|
—
|
|
|
|
476,781,526
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of These Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VIVA ENTERTAINMENT GROUP INC.
|
Condensed Statements of Cash Flows
|
For the Six Months Ended April 30, 2017 and 2016
|
(Unaudited)
|
|
|
2017
|
|
2016
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(10,625,937
|
)
|
|
$
|
—
|
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|
|
|
|
|
|
|
|
Amortization of fixed assets
|
|
|
3,440
|
|
|
|
—
|
|
Amortization of debt discount
|
|
|
847,160
|
|
|
|
—
|
|
Derivative expense
|
|
|
250,927
|
|
|
|
—
|
|
Common stock issued and payable for services
|
|
|
9,213,196
|
|
|
|
—
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
75,635
|
|
|
|
—
|
|
Accrued liabilities
|
|
|
163,506
|
|
|
|
—
|
|
Net Cash Used in Operating Activities
|
|
|
(72,073
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance of related party payable
|
|
|
31,680
|
|
|
|
—
|
|
Proceeds from sale of common stock
|
|
|
12,000
|
|
|
|
—
|
|
Proceeds from issuance of convertible notes
|
|
|
33,000
|
|
|
|
—
|
|
Payments on debt
|
|
|
(4,620
|
)
|
|
|
—
|
|
Net Cash From Financing Activities
|
|
|
72,060
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in Cash
|
|
|
(13
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash - Beginning of Period
|
|
|
385
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash - End of Period
|
|
$
|
372
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
Stock issued on conversion of debt
|
|
$
|
468,047
|
|
|
$
|
—
|
|
Derivative adjustment from debt extinguishment
|
|
$
|
10,590
|
|
|
|
—
|
|
Derivative conversion
|
|
$
|
705,588
|
|
|
|
—
|
|
Discount from derivative issuance
|
|
$
|
280,795
|
|
|
|
—
|
|
Cash paid for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of These Financial Statements
|
VIVA
ENTERTAINMENT GROUP INC.
Notes
to Financial Statements
NOTE
1 – NATURE OF OPERATIONS
Description
of Business and History
The
Company was incorporated on October 26, 2009 in the State of Nevada. The Company originally engaged in the development of a website
and also the design and development of a catalogue to sell over the counter and prescription medications, and supplements. In
2012, the Company undertook a change in focus to the natural resources sector where it was engaged in the acquisition and exploration
of base metals and mineral mining properties.
On
April 5, 2016, the Company completed the purchase of Viva Entertainment Group, Inc. (“Viva Entertainment”), a Delaware
corporation, from EMS Find, Inc. (“EMS”) pursuant to a stock purchase agreement. Viva Entertainment’s Chief
Executive Officer, Johnny Falcones, was appointed as the Company’s sole director, President and Chief Executive Officer
to manage the development and marketing of Viva Entertainment’s over the top (IPTV/OTT) application for connected TV’s,
desktop computers, tablets, and smart phones.
Pursuant
to the stock purchase agreement, the Company and EMS agreed to transfer control of Viva Entertainment to the Company through the
purchase of all outstanding shares of stock of Viva Entertainment by the Company in exchange for the issuance to EMS of a 10%
promissory note in the principal amount of $100,000, due six months from the Closing (the “EMS Note”), and the issuance
of 22,000,000 shares of common stock to Johnny Falcones. For accounting purposes, the transaction was treated as a reverse merger
since the acquired entity now forms the basis for operations and the transaction resulted in a change in control, with the acquired
company electing to become the successor issuer for reporting purposes. The accompanying financial statements have been prepared
to reflect the assets, liabilities and operations of Viva Entertainment Group, Inc. exclusive of Black River Petroleum since all
predecessor operations were discontinued. As part of the transaction, stock payable and amounts due to former officers were forgiven,
with the balances recorded as Contributed Capital. For equity purposes, additional paid-in capital and retained deficit shown
are those of Viva, exclusive of Black River Petroleum. Viva had no operations prior to the quarter ended April 30, 2016.
In
management’s opinion, all adjustments necessary for a fair statement of the results for the presented periods have been
made. All adjustments made were of a normal recurring nature.
Viva
Entertainment Group Inc. (the “Company”) develops and markets Viva Entertainment’s over the top (IPTV/OTT) application
for connected TV’s, desktop computers, tablets, and smart phones. The Company is based in Briarwood, New York.
Going
Concern
These
financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations
and continue its operations for the next fiscal year. Realization value may be substantially different from carrying
values as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. As
of April 30, 2017, the Company has a working capital deficiency and has an accumulated deficit of $15,379,416. The
continuation of Viva Entertainment Group as a going concern is dependent upon the continued financial support from its shareholders,
the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These
factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim information Regulation S-K. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In
the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation
have been included. These financial statements should be read in conjunction with out audited financial statements for the
year ended October 31, 2016.
Use
of Estimates
The
preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of net revenue and expenses in the reporting period. We regularly evaluate our estimates and assumptions
related to the useful life and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation
allowances. We base our estimates and assumptions on current facts, historical experience and various other factors 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 and the accrual of costs and expenses that are not readily apparent from other sources. The actual results
experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between
our estimates and the actual results, our future results of operations will be affected.
Loss
Per Common Share
The
Company reports net loss per share in accordance with provisions of the FASB. The provisions require dual presentation
of basic and diluted loss per share. Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss
per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.
As of April 30, 2017 and 2016, there were no dilutive common stock equivalents outstanding.
Fair
Value of Financial Instruments
Pursuant
to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all
financial instruments included on its balance sheet as of April 30, 2017 and October 31, 2016. The Company’s financial instruments
consist of cash and derivative liabilities. The Company considers the carrying value of such amounts in the financial
statements to approximate their fair value due to the short-term nature of these financial instruments.
The
Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial
liabilities. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally
accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively
with limited exceptions.
ASC
820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair
value, except for the fair value of leased property as defined in SFAS 13. ASC 820-10 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources
(observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, that are developed based
on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad
levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are
described below:
|
•
|
Level
1
|
Unadjusted quoted
prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
•
|
Level
2
|
Inputs other than
quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including
quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities
in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest
rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
•
|
Level
3
|
Inputs that are
both significant to the fair value measurement and unobservable. These inputs rely on management's own assumptions about the
assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs are developed based
on the best information available in the circumstances and July include the Company's own data.)
|
The
following presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring
basis as of April 30, 2017 and October 31, 2016:
April
30, 2017:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Convertible Notes Payable, net
|
|
$
|
471,650
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
471,650
|
|
Derivative Liability
|
|
|
1,064,233
|
|
|
|
|
|
|
|
|
|
|
|
1,064,233
|
|
Total
|
|
$
|
1,535,883
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,535,883
|
|
October
31, 2016:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Convertible Notes Payable, net
|
|
$
|
367,323
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
367,323
|
|
Derivative Liability
|
|
|
1,248,689
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,248,689
|
|
Total
|
|
$
|
1,616,012
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,616,012
|
|
Derivative
Financial Instruments
Fair
value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity
instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company
uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible
debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.
If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments
as derivative financial instruments.
Once
determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease
in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair
value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.
Cash
and Cash Equivalents
For
purposes of the Condensed Statements of Cash Flows, the Company considers liquid investments with an original maturity of three
months or less to be cash equivalents. As of April 30, 2017 and October 31, 2016, the Company had no cash equivalents.
NOTE
3 – RELATED PARTY TRANSACTIONS
In
connection with the acquisition of Viva Entertainment and the resignation of our former officers and directors, the Company received
forgiveness of stock payable of $3,390,000 and amounts due to former CEO of $132,854. These amounts were written off prior to
closing and have therefore not been included in Equity. However, the former CEO funded an additional $30,000 to the Company for
working capital during the year ended October 31, 2016.
The
detail composition of $329,840 in accrued wages with related parties as of April 30, 2017 is as follows: Johnny Falcones $114,265,
Alberto Gomez $123,288 and John Sepulveda $92,288. This accrual covered services rendered by the employees for the period from
April, 2016 through April 30, 2017 less payments made to such employees during the period.
The
detail composition of the $12,600 in stock payable with related parties as of April, 2017 is as follows: Alberto Gomez $12,600.
This stock payable is due to unissued shares earned on the employment agreements during the year ended October 31, 2016.
In
addition, John Sepulveda funded $10,000 to the Company for working capital during the year ended October 31, 2016 which remains
outstanding together with advances of $27,060 from the spouse of the company’s Chief Executive as of April 30, 2017.
NOTE
4 – CONVERTIBLE NOTES PAYABLE
|
|
Principal
Balance
|
|
Loan
Discount
|
|
Accrued
Interest
|
October
31, 2016
|
|
$
|
975,100
|
|
|
$
|
(607,777
|
)
|
|
$
|
43,426
|
|
Issued
in the year
|
|
$
|
33,000
|
|
|
|
—
|
|
|
|
—
|
|
Converted
into stock or repaid
|
|
|
(316,763
|
)
|
|
|
—
|
|
|
|
(14,024
|
)
|
Amortization
of debt discount
|
|
|
—
|
|
|
|
462,179
|
|
|
|
—
|
|
Interest
accrued
|
|
|
—
|
|
|
|
—
|
|
|
|
39,907
|
|
April
30, 2017
|
|
$
|
691,337
|
|
|
$
|
(145,598
|
)
|
|
|
69,309
|
|
The
Company evaluated the terms of the conversion features of its convertible debentures in accordance with ASC Topic No. 815 - 40,
Derivatives and Hedging - Contracts in Entity's Own Stock
and determined they are indexed to the Company's common stock
and the conversion features meet the definition of a liability, and therefore bifurcated the conversion features and accounted
for them as a separate derivative liability.
The
following table summarized the convertible notes and activity in the six months ended April 30, 2017:
|
|
|
|
|
|
|
|
|
|
For
Six Months Ended:
|
|
April 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Issuances
|
|
|
|
|
|
|
|
Original
Amount
|
|
Conversions/
Asssignments
|
|
Change Due to Issuance
|
|
Ending
Balances
|
LG #1
|
|
5/3/16
|
|
5/3/17
|
|
|
78,750
|
|
|
|
10.0
|
%
|
|
50% of
lowest closing bid over 20 TD
|
|
|
78,750
|
|
|
|
(54,550
|
)
|
|
|
0
|
|
|
|
24,200
|
|
Cerberus #1
|
|
5/3/16
|
|
5/3/17
|
|
|
78,750
|
|
|
|
10.0
|
%
|
|
50% of lowest closing
bid over 20 TD
|
|
|
78750
|
|
|
|
(25,034
|
)
|
|
|
0
|
|
|
|
53,717
|
|
Greentree
#1
|
|
5/23/16
|
|
5/23/17
|
|
|
50,000
|
|
|
|
12.0
|
%
|
|
50%
of lowest 3 closing bid over 10 TD
|
|
|
50000
|
|
|
|
(29,593
|
)
|
|
|
0
|
|
|
|
20,407
|
|
LG #2
|
|
6/3/16
|
|
6/3/17
|
|
|
78,750
|
|
|
|
10.0
|
%
|
|
50% of lowest
closing bid over 20 TD
|
|
|
78,750
|
|
|
|
0
|
|
|
|
0
|
|
|
|
78,750
|
|
Cerberus #2
|
|
6/8/16
|
|
6/8/17
|
|
|
78,750
|
|
|
|
10.0
|
%
|
|
50% of lowest closing
bid over 20 TD
|
|
|
78,750
|
|
|
|
0
|
|
|
|
0
|
|
|
|
78,750
|
|
Collision #1
|
|
7/1/16
|
|
7/1/17
|
|
|
110,000
|
|
|
|
12.0
|
%
|
|
50% of lowest close
over 5 TD
|
|
|
110,000
|
|
|
|
(39,665
|
)
|
|
|
0
|
|
|
|
70,335
|
|
Greentree #2
|
|
7/1/16
|
|
7/1/17
|
|
|
50,000
|
|
|
|
12.0
|
%
|
|
50% of lowest close
over 5 TD
|
|
|
50,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
50,000
|
|
Essex #2
|
|
7/19/16
|
|
7/19/17
|
|
|
37,100
|
|
|
|
10.0
|
%
|
|
60% of lowest closing
bid over 20 TD
|
|
|
37,100
|
|
|
|
(37,100
|
)
|
|
|
0
|
|
|
|
0
|
|
Essex #1 - 4/6/16 $145k
Note (originally Black River)
|
|
8/1/16
|
|
3/30/17
|
|
|
145,000
|
|
|
|
10.0
|
%
|
|
55% of lowest closing
bid over 20 TD
|
|
|
145,000
|
|
|
|
(111,184
|
)
|
|
|
0
|
|
|
|
33,816
|
|
Rico #1
|
|
8/1/16
|
|
8/1/17
|
|
|
25,000
|
|
|
|
0.0
|
%
|
|
40% of lowest TP over
20 TD
|
|
|
25,000
|
|
|
|
(25,000
|
)
|
|
|
0
|
|
|
|
0
|
|
David Lewis -DBL #1
|
|
8/1/16
|
|
8/1/17
|
|
|
25,000
|
|
|
|
0.0
|
%
|
|
40% of lowest TP over
20 TD
|
|
|
25,000
|
|
|
|
(6,000
|
)
|
|
|
0
|
|
|
|
19,000
|
|
Cross Over Promotions
#1
|
|
8/2/16
|
|
2/2/17
|
|
|
35,000
|
|
|
|
0.0
|
%
|
|
60% of lowest closing
bid over 20 TD
|
|
|
35,000
|
|
|
|
(35,000
|
)
|
|
|
0
|
|
|
|
0
|
|
Collision #2
|
|
8/4/16
|
|
8/4/17
|
|
|
25,000
|
|
|
|
12.0
|
%
|
|
50% of lowest 3 bids
10 TD
|
|
|
25,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
25,000
|
|
Greentree #3
|
|
8/4/16
|
|
8/4/17
|
|
|
25,000
|
|
|
|
12.0
|
%
|
|
50% of lowest 3 bids
10 TD
|
|
|
25,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
25,000
|
|
Hector Cruz Consulting
#1
|
|
8/5/16
|
|
2/5/17
|
|
|
25,000
|
|
|
|
8.0
|
%
|
|
60% of lowest closing
bid over 20 TD
|
|
|
25,000
|
|
|
|
(12,000
|
)
|
|
|
0
|
|
|
|
13,000
|
|
Benites Consulting
#1
|
|
8/20/16
|
|
2/20/17
|
|
|
13,000
|
|
|
|
8.0
|
%
|
|
60% of lowest closing
bid over 20 TD
|
|
|
13,000
|
|
|
|
(13,000
|
)
|
|
|
0
|
|
|
|
0
|
|
Crown Bridge 450k #1
|
|
9/7/16
|
|
9/7/17
|
|
|
45,000
|
|
|
|
8.0
|
%
|
|
50% of lowest closing
bid over 20 TD
|
|
|
45,000
|
|
|
|
(13,872
|
)
|
|
|
0
|
|
|
|
31,128
|
|
Greentree #4
|
|
9/12/16
|
|
9/12/17
|
|
|
50,000
|
|
|
|
12.0
|
%
|
|
50% of lowest 3 bids
10 TD
|
|
|
50,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
50,000
|
|
PowerUp Lending
|
|
1/3/17
|
|
11/10/17
|
|
|
28,000
|
|
|
|
8.0
|
%
|
|
50% of lowest 3 bids
10 TD
|
|
|
28,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
28,000
|
|
GPL Ventures
|
|
1/25/17
|
|
7/25/17
|
|
|
35,000
|
|
|
|
12.0
|
%
|
|
50% of lowest 1 bids
20 TD
|
|
|
35,000
|
|
|
|
(896
|
)
|
|
|
0
|
|
|
|
34,104
|
|
4/5/16 EMS Find $106k
- amended 2/27/17
|
|
2/27/17
|
|
3/31/18
|
|
|
106,000
|
|
|
|
10.0
|
%
|
|
40% of lowest TP over
20 TD
|
|
|
0
|
|
|
|
(84,765
|
)
|
|
|
106,000
|
|
|
|
21,236
|
|
Williams Holding $25k
- assigned from Robert Rico note
|
|
3/1/17
|
|
3/1/18
|
|
|
25,000
|
|
|
|
0.0
|
%
|
|
40% of lowest TP over
20 TD
|
|
|
0
|
|
|
|
(9,950
|
)
|
|
|
25,000
|
|
|
|
15,050
|
|
George Harrison Note
for $5k
|
|
3/15/17
|
|
3/15/18
|
|
|
5,000
|
|
|
|
12.0
|
%
|
|
40% of lowest closing
bid over 20 TD
|
|
|
0
|
|
|
|
0
|
|
|
|
5,000
|
|
|
|
5,000
|
|
Biz Development $13k
- assigned from Benites Consulting note
|
|
3/20/17
|
|
9/20/17
|
|
|
13,000
|
|
|
|
8.0
|
%
|
|
55% of lowest closing
bid over 20 TD
|
|
|
0
|
|
|
|
(12,344
|
)
|
|
|
13,000
|
|
|
|
656
|
|
Biz Development $9k
- assigned from Hector Cruz Consulting Note
|
|
3/22/17
|
|
9/22/17
|
|
|
9,000
|
|
|
|
8.0
|
%
|
|
55% of lowest closing
bid over 20 TD
|
|
|
0
|
|
|
|
0
|
|
|
|
9,000
|
|
|
|
9,000
|
|
Global Opportunity
Group/Howard Schraub - $53k - assigned from EMS Find
|
|
3/27/17
|
|
3/31/18
|
|
|
53,795
|
|
|
|
10.0
|
%
|
|
50% of lowest closing
bid over 20 TD
|
|
|
0
|
|
|
|
(20,143
|
)
|
|
|
53,795
|
|
|
|
33,652
|
|
Biz Development $6k
- assigned from Hector Cruz Consulting Note
|
|
4/20/17
|
|
10/20/17
|
|
|
6,000
|
|
|
|
8.0
|
%
|
|
55% of lowest closing
bid over 20 TD
|
|
|
0
|
|
|
|
0
|
|
|
|
6,000
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,255,895
|
|
|
|
|
|
|
|
|
|
859,400
|
|
|
|
(351,395
|
)
|
|
|
217,795
|
|
|
|
725,800
|
|
NOTE
4 – CONVERTIBLE NOTES PAYABLE - CON’T
As
of October 2016, the company issued convertible promissory notes totaling $323,000 as consideration for services contracts to
the following individuals:
Name
|
Amount
|
Date
|
Dbl Group
|
$
|
25,000
|
|
|
August 1, 2016
|
|
Robert Rico
|
$
|
25,000
|
|
|
August 1, 2016
|
|
Crossover Promotions
|
$
|
35,000
|
|
|
August 2, 2016
|
|
Hector Cruz
|
$
|
25,000
|
|
|
August 5, 2016
|
|
Mercedes Benites
|
$
|
13,000
|
|
|
August 17, 2016
|
|
Greentree Financial Group, Inc.
|
$
|
50,000
|
|
|
May 23, 2016
|
|
Greentree Financial Group, Inc.
|
$
|
50,000
|
|
|
July 1, 2016
|
|
Greentree Financial Group, Inc.
|
$
|
25,000
|
|
|
August 4, 2016
|
|
Greentree Financial Group, Inc.
|
$
|
50,000
|
|
|
September 12, 2016
|
|
Collision Capital LLC
|
$
|
25,000
|
|
|
August 4, 2016
|
|
These
notes bear interest between 0 -12% and are due and payable twelve months from the date of issuance. They can be converted into
common shares of the Company’s common stock at the request of the holder after six months at a discount of 40% off the lowest
preceding 20-day trading price of at the time of conversion.
ASC
815 requires assessment of the fair market value of derivative liability at the end of each reporting period and recognition of
any change in the fair market value as other income or expense.
Changes
in Derivative Liabilities were as follows:
October 31, 2016
|
|
$
|
1,248,689
|
|
Issuance of derivative
|
|
|
411,135
|
|
Conversion into stock or assignment
|
|
|
(705,588
|
)
|
Extinguishment of debt
|
|
|
(10,590
|
)
|
Change in fair value
|
|
|
120,587
|
|
April 30, 2017
|
|
$
|
1,064,233
|
|
NOTE
5 – NOTES PAYABLE
Pursuant
to the Stock Purchase Agreement, the Company issued to EMS a promissory note in the principal amount of $100,000, due six months
from the Closing, which represents the purchase price paid by the Company for Viva Entertainment. All principal and interest was
converted into common stock during the quarter ended April 30, 2017 (see Note 4).
NOTE 6
- COMMON STOCK
During the three months ended
April 30, 2017 the Company had the following common stock transactions:
|
·
|
98,050,000 shares issued to various
individuals for services previously rendered valued at a total of $9,213,195 using the share value on the date of agreement
|
|
·
|
14,500,000 shares issued for cash proceeds
of $12,000.
|
|
·
|
684,093,740 shares were issued on the conversion of notes payable as follows:
|
Holder
|
|
Conversion Date
|
|
Principal Converted
|
|
Shares Issued
|
|
|
|
|
|
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
11/3/2016
|
|
|
10,000
|
|
|
|
4,434,590
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
11/4/2016
|
|
|
5,000
|
|
|
|
2,173,913
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
11/4/2016
|
|
|
10,000
|
|
|
|
4,434,590
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
11/4/2016
|
|
|
10,000
|
|
|
|
4,434,590
|
|
LG #1
|
|
11/4/2016
|
|
|
13,000
|
|
|
|
6,502,542
|
|
Cerberus #1
|
|
11/10/2016
|
|
|
10,000
|
|
|
|
4,952,903
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
12/7/2016
|
|
|
10,000
|
|
|
|
3,952,570
|
|
Greentree #1
|
|
12/19/2016
|
|
|
10,000
|
|
|
|
6,666,667
|
|
LG #1
|
|
12/20/2016
|
|
|
8,550
|
|
|
|
6,491,978
|
|
LG #1
|
|
1/9/2017
|
|
|
8,500
|
|
|
|
8,649,704
|
|
Cerberus #1
|
|
1/10/2017
|
|
|
8,900
|
|
|
|
8,929,492
|
|
LG #1
|
|
1/19/2017
|
|
|
8,650
|
|
|
|
8,824,914
|
|
Collision #1
|
|
1/21/2017
|
|
|
8,100
|
|
|
|
6,000,000
|
|
Essex #2
|
|
1/23/2017
|
|
|
10,000
|
|
|
|
9,166,666
|
|
Cross Over Promotions #1
|
|
1/25/2017
|
|
|
(35,000
|
)
|
|
|
—
|
|
Essex #2
|
|
1/30/2017
|
|
|
13,000
|
|
|
|
10,833,333
|
|
David Lewis -DBL #1
|
|
2/1/2017
|
|
|
(6,000
|
)
|
|
|
5,000,000
|
|
Collision #1
|
|
2/1/2017
|
|
|
(8,400
|
)
|
|
|
6,000,000
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
2/1/2017
|
|
|
—
|
|
|
|
11,145,833
|
|
LG #1
|
|
2/2/2017
|
|
|
(8,650
|
)
|
|
|
8,856,514
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
2/21/2017
|
|
|
(1,350
|
)
|
|
|
12,300,000
|
|
Essex #2
|
|
2/21/2017
|
|
|
(13,000
|
)
|
|
|
12,745,098
|
|
GPL Ventures
|
|
2/23/2017
|
|
|
(178
|
)
|
|
|
17,800,000
|
|
LG #1
|
|
2/24/2017
|
|
|
(7,200
|
)
|
|
|
9,724,937
|
|
GPL Ventures
|
|
2/24/2017
|
|
|
(178
|
)
|
|
|
17,800,000
|
|
Essex #2
|
|
2/24/2017
|
|
|
(1,100
|
)
|
|
|
2,350,322
|
|
GPL Ventures
|
|
2/27/2017
|
|
|
(200
|
)
|
|
|
20,000,000
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
2/28/2017
|
|
|
(14,184
|
)
|
|
|
17,535,758
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
2/28/2017
|
|
|
(12,000
|
)
|
|
|
14,545,454
|
|
Rico #1
|
|
3/1/2017
|
|
|
(25,000
|
)
|
|
|
—
|
|
GPL Ventures
|
|
3/15/2017
|
|
|
(340
|
)
|
|
|
34,000,000
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
3/15/2017
|
|
|
(14,141
|
)
|
|
|
17,140,412
|
|
LG #1
|
|
3/15/2017
|
|
|
(7,792
|
)
|
|
|
9,739,725
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
3/16/2017
|
|
|
(10,335
|
)
|
|
|
20,500,000
|
|
Collision #1
|
|
3/17/2017
|
|
|
(13,200
|
)
|
|
|
22,372,881
|
|
Benites Consulting #1
|
|
3/20/2017
|
|
|
(13,000
|
)
|
|
|
—
|
|
Hector Cruz Consulting #1
|
|
3/22/2017
|
|
|
(6,000
|
)
|
|
|
—
|
|
GPL Ventures
|
|
3/22/2017
|
|
|
(340
|
)
|
|
|
34,000,000
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
3/23/2017
|
|
|
(3,315
|
)
|
|
|
9,991,211
|
|
4/5/16 EMS Find $106k - amended 2/27/17
|
|
3/27/2017
|
|
|
(53,795
|
)
|
|
|
—
|
|
4/5/16 EMS Find $106k - amended 2/27/17
|
|
4/4/2017
|
|
|
(13,230
|
)
|
|
|
26,459,000
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
4/6/2017
|
|
|
(15,000
|
)
|
|
|
53,863,636
|
|
Greentree #1
|
|
4/7/2017
|
|
|
(19,593
|
)
|
|
|
24,970,589
|
|
Williams Holding $25k - assigned from Robert Rico note #10 for $15k
|
|
4/7/2017
|
|
|
(9,950
|
)
|
|
|
24,875,000
|
|
Essex #1 - 4/6/16 $145k Note (originally Black River)
|
|
4/7/2017
|
|
|
(10,000
|
)
|
|
|
22,222,222
|
|
Biz Development $13k - assigned from Benites Consulting note #16 for $14k
|
|
4/10/2017
|
|
|
(12,344
|
)
|
|
|
27,070,175
|
|
Hector Cruz Consulting #1
|
|
4/20/2017
|
|
|
(6,000
|
)
|
|
|
—
|
|
Global Opportunity Group/Howard Schraub - $53k - assigned from 4/5/16 EMS
|
|
4/20/2017
|
|
|
(20,143
|
)
|
|
|
40,286,521
|
|
4/5/16 EMS Find $106k - amended 2/27/17
|
|
4/27/2017
|
|
|
(17,740
|
)
|
|
|
44,350,000
|
|
Crown Bridge 450k #1
|
|
4/27/2017
|
|
|
(10,000
|
)
|
|
|
20,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(244,997
|
)
|
|
|
684,093,740
|
|
Each
of these issuances was made pursuant to an exemption from registration under Rule 144 of the Securities Act of 1933.
NOTE
7 – STOCK ISSUABLE
Common stock issuable consists of the value of
shares payable under employment contracts with officers of the Company. During the six months ended April 30, 2017, the Company
issued 58,000,000 shares to Johnny Falcones under his employment contract, the value of which on the date the of the contract,
$499,800, was offset against stock issuable. Common stock issuable was $12,600 and $512,400 as of April 30, 2017 and October 31,
2016.
NOTE 8
– SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and
has determined that no material subsequent events exist through the date of this filing apart from the following:
•
|
Subsequent to April 30, 2017, the Company
issued a total of 2,120,000,000 shares of restricted common stock to several individuals for cash proceeds of $127,500.
|
|
|
•
|
Subsequent to April 30, 2017, the Company amended its Articles
of Incorporation to increase the authorized common stock to 4.9 billion shares. This action was undertaken by a majority
vote of shareholders.
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary
Notice Regarding Forward Looking Statements
The
information contained in Item 2 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”). Actual results may materially differ from those projected in the forward-looking statements as a result of certain
risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected
in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to
be correct or that actual results will not be different from expectations expressed in this report.
This
filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect
to our business, strategies, products, future results and events, and financial performance. All statements made in this filing
other than statements of historical fact, including statements addressing operating performance, events, or developments which
management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume
growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about
future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,”
“expect,” “intend,” “anticipate,” “estimate,” “may,” variations of
such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements,
and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain
risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially
from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not
undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.
Readers
should not place undue reliance on these forward-looking statements, which are based on management’s current expectations
and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions
(including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements
could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause
or contribute to such differences include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K
and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested
parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.
Overview
Viva
Entertainment Group Inc. (the “Company”) is a business that develops and markets Viva Entertainment’s over the
top (IPTV/OTT) application for connected TV’s, desktop computers, tablets, and smart phones. The Company is based in Briarwood,
New York.
We
were incorporated in the State of Nevada on October 26, 2009. From inception, we were originally engaged in the development of
a website and also the design and development of a catalogue to sell over the counter and prescription medications, and supplements.
In 2012, we undertook a change in our focus to the natural resources sector where it was engaged in the acquisition and exploration
of base metals and mineral mining properties. After an unsuccessful exploration program on our mineral properties we decided to
enter the market for over the top (IPTV/OTT) application for connected TV’s, desktop computers, tablets, and smart phones.
On
April 5, 2016, we completed the purchase from EMS Find, Inc. (“EMS”) of Viva Entertainment Group, Inc. (“Viva
Entertainment”), a Delaware corporation and a subsidiary of EMS, pursuant to a stock purchase agreement (“Stock Purchase
Agreement”), and Viva Entertainment’s Chief Executive Officer, Johnny Falcones, resigned from all positions at EMS
and has been elected as our sole director and President and Chief Executive Officer to manage the development and marketing of
Viva Entertainment’s over the top (IPTV/OTT) application for connected TV’s, desktop computers, tablets, and smart
phones.
This
purchase represents a new business and industry which we operate in. Pursuant to the Stock Purchase Agreement, the Company and
EMS agreed to transfer control of Viva Entertainment to the Company through the purchase from the Seller by the Purchaser of all
800 outstanding shares of stock of Viva Entertainment to the Company in exchange for the issuance to EMS of a 10% promissory note
in the principal amount of $100,000, due six months from the Closing (the “EMS Note”), which represents the purchase
price paid by us for Viva Entertainment. In connection with the closing, Alexander Stanbury, our former President and Chief
Executive Officer, transferred to Johnny Falcones 26,629,371 shares of restricted common stock of the Company from the shares
of common stock owned by Mr. Stanbury in exchange for payment of $93,625 from the $135,000 of financing arranged with Essex Global
Investment Corp. for the acquisition of the Company (the “Acquisition Financing Facility”).
On
April 6, 2016, we closed on the $135,000 Acquisition Financing Facility pursuant to a securities purchase agreement, dated April
6, 2016 (the "Essex Securities Purchase Agreement"), with Essex Global Investment Corp, a Nevada corporation ("Essex"),
for the sale of a convertible promissory note (the "Essex Note") in the principal amount of $145,000, with an original
issue discount of $10,000.
The
Essex Note, which is due on March 30, 2017, bears interest at the rate of 10% per annum. All principal and accrued interest on
the Note is convertible at any time into shares of our common stock at the election of Essex at a conversion price for each share
of Common Stock equal to 55%
of the lowest reported trading price of the Company’s common stock for the twenty
prior trading days including the day upon which the conversion notice is received us or our transfer agent. The conversion price
discount will be decreased to 45% if the Company experiences a DTC "chill" on its shares. If we are not current within
ninety days from the date of the Note, the conversion discount will increase by 20%, so that the conversion price would be 35%
of the trading price as calculated above.
We
have the right to prepay the Essex Note during the first six months following the date of issuance of the Essex Note with a premium
of up to 135% of all amounts owed to Essex, including default interest, depending upon when the prepayment is effectuated. The
Essex Note may not be redeemed after 180 days.
The
Essex Note contains default events which, if triggered and not timely cured, will result in default interest and penalties.
On
April 8, 2016, in connection with the purchase of Viva Entertainment Group, Inc., our Board of Directors authorized the issuance
of an aggregate of 37,170,629 shares of common stock, comprised of 22,000,000 issued to our Founder and Chief Executive Officer
(5,000,000 of which are registered in name of the wife of the CEO), 13,170,629 as common shares for consulting services to various
consultants and 2,000,000 common shares as consideration for an investor entering into a share purchase agreement. An additional
500,000 common shares was issued for general corporate purposes.
Plan
of Operation
As
of April 30, 2017 we had a working capital deficiency of $2,309,397, have not generated revenue, and have an accumulated deficit
of $15,379,416.
Our
auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have
not generated any revenues or profits.
We
have only four officers and directors. They are responsible for our managerial and organizational structure which will include
preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, they
will be responsible for the administration of the controls. Should they not have sufficient experience, they may be incapable
of creating and implementing the controls which may cause us to be subject to sanctions and fines by the SEC which ultimately
could cause you to lose your investment.
Limited
Operating History
There
is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any
revenues to date. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital resources.
Results
of Operations
Revenues
As
of the date of this report, we have yet to generate any revenues from our business operations.
Operating
Expenses
For
the three and six months ended April 30, 2017, we incurred operating expenses in the amounts of $9,259,133 and $9,495,681, respectively.
We had no operating expenses incurred during the three and six months ended April 30, 2016. Our operating expenses were comprised
of: (i) consulting services expenses of $6,640 and $32,305 for the three and six months ended April 30, 2017, respectively (ii)
general and administrative expenses of $484,044 and $576,085 for the three and six months ended April 30, 2017, respectively,
and (iii) wage expenses of $8,768,449 and $8,887,291 for three and six months ended April 30, 2017, respectively. Due to a reverse
merger into an operating company with no prior operations in April of 2016, there are no prior period expenses.
Net
Loss
Our
net loss for the three and six months ended April 30, 2017 was $9,647,118 and $10,625,937, respectively. The increase in net loss
was the result of the increase in compensation and above mentioned costs. Due to a reverse merger into an operating company with
no prior operations in April of 2016, there are no prior period expenses. During the three months ended April 30, 2017, we also
incurred an income of $11,927 for a gain on change of the derivative liability, offset by the interest expense of $400,332. During
the six months ended April 30, 2017, we had an expense of $250,928 for a loss on change of the derivative liability and $890,338
in interest expense. We had nothing in the comparable period in the prior year.
Liquidity
and Capital Resources
As
of April 30, 2017, we had cash of $372. As of October 31, 2016, we had cash of $385.
Net
cash used in operating activities was $72,073 for the six months ended April 30, 2017, which was comparable to the net cash used
in operating activities of $-0- for the six months ended April 30, 2016. The net cash used in operations was principally attributable
to net losses of $10,625,937 and $-0- during the six months ended April 30, 2017 and 2016, respectively, offset principally by
amortization of debt discount of $847,160 and $-0-, amortization expense of $3,440 and $-0-, common shares issued for services
of $9,213,196 and $-0-, and loss on change in derivative liability and derivative issuance totaled $250,927 and $-0- in such same
periods, respectively. There was no activity in the above mentioned categories in the prior period due to a reverse merger into
an operating company with no prior operations in April of 2016.
Cash
flows used for investing activities were $-0- and $-0- for the six months ended April 30, 2017 and 2016, respectively. This usage
was solely as a result of the effects of the reverse merger.
Cash
flows provided by financing activities were $72,060 and $-0- for the six months ended April 30, 2017 and 2016, respectively.
Positive cash flows from financing activities during the six months ended April 30, 2017 were due primarily to proceeds from related
party payable of $31,680, proceeds from sales of common stock and convertible notes in amount of $12,000 and $33,000, respectively.
There was no activity in the above mentioned categories in the prior period due to a reverse merger into an operating company
with no prior operations in April of 2016.
Currently
we have no revenues and have four salaried employees including Johnny Falcones, our officer and director. We currently require
very limited resources but intend to hire employees and consultants in the latter part of 2017 for the Viva Entertainment operations.
In due course, should we require capital for these operations, we will need to raise additional capital. There is no guarantee
that we will be able to raise further capital. At present, we have not made any arrangements to raise additional capital but are
diligently working on this.
If
we need additional capital and cannot raise it we will either have to suspend operations until we do raise the capital or cease
operations entirely. Other than as described in this paragraph, we have no other financing plans.
As
of the date of this report, we have yet to generate any revenues.
Off-Balance
Sheet Arrangements
We
have no off-balance sheet arrangements.
Recent
Accounting Pronouncements
In
March 2016, the FASB issued ASU 2016-09,
Stock Compensation,
which is intended to simplify the accounting for share-based
payment award transactions. The new standard will modify several aspects of the accounting and reporting for employee share-based
payments and related tax accounting impacts, including the presentation in the statements of operations and cash flows of certain
tax benefits or deficiencies and employee tax withholdings, as well as the accounting for award forfeitures over the vesting period.
The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that year, and
will be adopted by the Company in the first quarter of fiscal 2017. The Company anticipates the new standard will result in an
increase in the number of shares used in the calculation of diluted earnings per share and will add volatility to the Company’s
effective tax rate and income tax expense.
In
August 2015, FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective
Date” defers the effective date ASU No. 2014-09 for all entities by one year. Public business entities, certain not-for-profit
entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning
after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only
as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period.
All other entities should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2018,
and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply
the guidance in ASU No. 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim
reporting periods within that reporting period. All other entities also may apply the guidance in Update 2014-09 earlier as of
an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning
one year after the annual reporting period in which the entity first applies the guidance in ASU No. 2014-09. We are currently
reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial
condition.
In
July 2015, FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” more closely
align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS).
The amendments in this ASU do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory
method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO)
or average cost. An entity should measure inventory within the scope of this Update at the lower of cost and net realizable value.
Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of
completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail
inventory method. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2016, including
interim periods within those fiscal years. For all other entities, this ASU is effective for fiscal years beginning after December
15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments in this ASU should be applied
prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently
reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial
condition.
Other
pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not
applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows.
Subsequent
Events
Subsequent
to April 30, 2017, the Company issued a total of 2,120,000,000 shares of restricted common stock to several individuals on
the conversion of notes payable and associated accrued interest.