UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

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

  

For the fiscal year ended April 30, 2019

 

☐ 

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

  

For the transition period from ___________ to ___________

 

Commission file number 000-55519

 

Force Protection Video Equipment Corp.

(Exact name of registrant as specified in its charter)

     

Florida

 

45-1443512

(State of other jurisdiction of

incorporation or organization)

 

(IRS Employer

 Identification Number)

 

 

 

1600 Olive Chapel Rd., Apex, NC

 

27502

(Address of principal executive offices)

 

(Zip Code)

 

 (919) 780-7897

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

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

 

Common Stock, $0.0001 Par Value

(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o 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 o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12-months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒     No o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

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

 

Large accelerated filer

o

Accelerated filer 

o

Non-Accelerated filer

o (Do not check if a smaller reporting company)

Smaller reporting company

 

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

 

The aggregate market value of the common stock of the registrant held by non-affiliates was approximately $76,000 as of October 31, 2018, the last business day of the registrant’s most recently completed second fiscal quarter. As of July 10, 2020, there were 841,184,289 shares of common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

TABLE OF CONTENTS

 

FORCE PROTECTION VIDEO EQUIPMENT CORP.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED APRIL 30, 2019

 

 

 

 

PAGE

 

PART I

 

 

 

 

Item 1.

Business

 

 

4

 

Item 1A.

Risk Factors

 

 

6

 

Item 2.

Properties

 

 

7

 

Item 3.

Legal Proceedings

 

 

7

 

Item 4.

Mine Safety Disclosures

 

 

7

 

 

 

 

 

 

 

PART II

 

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities

 

 

8

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

8

 

Item 8.

Financial Statements

 

 

14

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

 

41

 

Item 9A.

Controls and Procedures

 

 

41

 

Item 9B.

Other Information

 

 

42

 

 

 

 

 

 

 

PART III

 

 

 

 

Item 10.

Directors, Executive Officers, and Corporate Governance

 

 

43

 

Item 11.

Executive Compensation

 

 

46

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

 

46

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

 

47

 

Item 14.

Principal Accountant Fees and Services

 

 

48

 

 

 

 

 

 

 

PART IV

 

 

 

 

Item 15.

Exhibits and Financial Statement Schedules

 

 

49

 

 

 

 

 

 

 

SIGNATURES

 

 

50

 

 

 

 

 

 

 

EXHIBIT INDEX

 

 

51

 

 

 

 

 

 

 

CERTIFICATIONS

 

 

 

 

  

 
2

Table of Contents

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Statements in this Report may be “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company issues “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this Report, including the risks described under “Risk Factors,” “Management’s Discussion and Analysis” and “Our Business.”

 

There are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors, include, without limitation, the following: our ability to develop our technology platform and our products; our ability to protect our intellectual property; the risk that we will not be able to develop our technology platform and products in the current projected timeframe; the risk that our products will not achieve performance standards in clinical trials; the risk that the clinical trial process will take longer than projected; the risk that our products will not receive regulatory approval; the risk that the regulatory review process will take longer than projected; the risk that we will not be unsuccessful in implementing our strategic, operating and personnel initiatives; the risk that we will not be able to commercialize our products; any of which could impact sales, costs and expenses and/or planned strategies. Additional information regarding factors that could cause results to differ can be found in this Report and in our other filings with the Securities and Exchange Commission.

 

The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act. Unless otherwise provided in this Report, references to the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Force Protection Video Equipment Corp.

 

 
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 PART I

 

ITEM 1:BUSINESS

 

Overview

 

The Company is in the business of selling video and audio capture devices initially targeted to law enforcement agencies. With over 30 years of marketing to law enforcement, the Company’s CEO, Paul Feldman is able to leverage his extensive knowledge and base of contacts to produce sales. The Company has established a web site at www.forceprovideo.com whereby customers can view the Company’s products and place orders. We believe that given recent current events between law enforcement agencies and the public, which has been widely reported by the media, there is a significant market opportunity for the Company’s products. In the first quarter of fiscal 2016, the Company received multiple orders for the LE10 camera System. The LE10 is a small bodied, high definition (HD) camera which is half the size and half the price of most law enforcement cameras currently available. The LE10 and more recent addition the LE50 are rich with features that make them ideal for on-demand video and audio capture. The LE10 and LE50 do not require special software or expensive storage contracts. The video files can quickly be downloaded into a standard law enforcement case file and the micro SD cards are sealed in the provided static evidence bags and then securely stored in the department’s evidence locker. The Company’s Video LE10 and LE50 cameras are a rugged design which incorporates Ambarella (NASDAQ “AMBA”) made chips that allow the cameras to record high definition video.

 

Product Development and Sales

 

Our on-body mini-camera was developed by Paul Feldman, our Chief Executive Officer, President and Director who has significant experience in the development and commercialization of security and surveillance related products. From 2001 through August 2009, Mr. Feldman served as President and a Director of Law Enforcement Associates, Inc., a manufacturer of surveillance products and audio intelligent devices which were sold to the U.S. military and law enforcement. Patent technologies previously developed by Mr. Feldman include U.S. Patent Number 7,631,601 Surveillance Projectile and U.S. Patent Number 2006/0283,345 Surveillance Projectile.

 

Our video and audio capture devices are compact, ergonomic, tamperproof and designed to capture HD video and/or audio on demand enabling our customers to capture content while engaged in a wide range of activity. We also sell accessories that enhance the functionality and versatility of our products, including mounts, such as the helmet, handlebar, roll bar and tripod mounts, as well as mounts that enable users to wear the camera on their bodies, such as the wrist housing, chest harness and head strap. Other accessories include spare batteries, charging accessories and memory drives. Our products are marketed primarily to law enforcement due to their unique need to capture important events in the course of their duties.

 

Our primary products consist of video and audio recording devices as follows:

 

LE10 Law Enforcement Video Recorder. Retail price: $195. The LE10 on-body camera is designed for use by law enforcement and can be mounted on helmets, tactical vest and riot shields. The LE10 provides high quality video and a sensor that allows the device to shoot in full HD at 30 fps, and 8 MP photos with shutter speed of 8fps in burst mode. In photo mode, the user can take pictures with a delayed timer. The device has three (3) resolutions and slow-motion capability allowing its user to create highly quality video while engaged in a variety of physical activity. The LE10 has built-in Wi-Fi, providing connectivity with a smartphone or tablet to enable remote control and content viewing functionality. Video taken by the LE10 is stored on a micro HD SD card which can be transferred to a computer for use as evidence. Downloading the video into evidence requires no special software or expensive cloud storage contracts. The LE10 is equipped with a high definition microphone to capture and record audio. The LE10 can also be used only as a standalone audio recorder to record witness statements or conduct interviews.

 

LE50 HD Body Cam. Retail price: $495. The LE50 includes many of the LE10 features in an on-body camera designed for use by law enforcement which can be mounted on helmets, tactical vest and riot shields. The LE50 provides up to 10 hours of high quality video with a built in audio announcement feature, 50 hours of standby time, sound and vibration operation indication, 2″ TFT-LCD High Resolution Color Display, 32 GB of internal tamper proof storage, supports up to 128GB of memory, 140 degree field of view, white led illumination, waterproof level of IP65, metal clip with 360 degrees rotation, one button tag of important file feature and GPS recording.

 

SC1 Sunglass Camera. Retail price: $199.95. The SC1 Sunglass Camera is made from TR90 high impact resistant and flexible material and features a 150° wide-angle full HD 1080p video camera, with one-hour record time, built between the eyes with the controls and battery built into the glasses’ ultra slim frame. A full range of polarized and clear lenses are available and easily interchangeable.

 

Surveillance Cameras. Retail price: $100-$1,800. The Surveillance cameras now offered are state of the art, disguised cameras sold exclusively to law enforcement. Due to the sensitive nature of these products no further information may be disclosed.

 

Our manufacturer provides a one (1) year warranty for our products, and customers can purchase another year.

 

Our customers include the federal government and more than five hundred (500) state and local law enforcement agencies.

 

 
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Table of Contents

 

Distribution

 

Customers purchase products from our website, printed catalogs and by telephone order. All products are shipped from our manufacturer to our facility in North Carolina where we process and ship product to our customers using Federal Express or United Parcel Services. Customers pay all shipping charges for orders less than $200.

 

Manufacturing

 

We purchase our finished products on an as needed basis from several manufacturers in Shenzhen China, Taiwan, and the USA. Our manufacturers provide production, labeling and packaging of our finished product according to our specifications which is confirmed with each order placed. We are not subject to any supplier agreements which means we are not obligated to purchase a minimum amount of product or place orders in the future. We pay for all products we order at the time the order is placed. Upon placing an order, our manufacturer creates a purchase order reflecting: (i) the product ordered, (ii) price per item (iii) total cost for the order, (iv) total cost to ship product ordered from our manufacturer to our facility, (iv) that immediate payment in required at the time of the order, and (v) the delivery date and delivery address. All material used to manufacture our products is located, purchased and paid for by our manufacturers who invoices us only for our finished product. All products offered by Force Protection Video have a twelve (12) month warranty.

 

Marketing

 

Currently, our sales and marketing efforts include printed marketing brochures catalogs featuring our products which we distribute to state and local law enforcement agencies. We create and deliver brochures to state and local law enforcement, every four (4) weeks, using U.S. Mail. Our data base contains over 25,000 law enforcement agencies nationwide.

 

We believe that a marketing strategy focused on print marketing to law enforcement will provide our target customers with the opportunity to view our specific information about our products and their features, which is an optimal strategy to increase sales.

 

Product Development

 

We expense all product development costs as incurred. Product development costs have been negligible for the past few years but are incurred as needed to support new product ideas and launches.

 

Product Warranty

 

We accept returns of products two (2) weeks after purchase. Additionally, our manufacturer provides a twelve (12) month warranty on all products manufactured and the Company offers an extended warranty for year two. The occurrence of any material defects or product recalls could make us liable for damages and warranty claims. Any negative publicity related to the perceived quality of our products could affect our brand image, decrease retailer, distributor and customer demand, and adversely affect our operating results and financial condition. Warranty claims may result in litigation, the occurrence of which could adversely affect our business and operating results.

 

Competition

 

The market for on-body cameras is highly competitive. Further, we expect competition to increase in the future as existing competitors introduce new and more competitive offerings alongside their existing products, and as new market entrants introduce new products into our markets. We compete against established, well-known camera manufacturers such as Axon- Taser,WatchGuard and Provision. Many of our current competitors have substantial market share, diversified product lines, well- established supply and distribution systems, strong worldwide brand recognition and greater financial, marketing, research and development and other resources than we do.

 

In addition, many of our existing and potential competitors have substantial competitive advantages, such as:

 

·

longer operating histories;

·

the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products;

·

broader distribution and established relationships with channel partners;

·

access to larger established customer bases;

·

greater financial resources;

·

large intellectual property portfolios; and

·

the ability to bundle competitive offerings with other products and services

  

 
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Moreover, smartphones and tablets with photo and video functionality have significantly displaced traditional camera sales. It is possible that, in the future, the manufacturers of these devices, such as Apple Inc. and Samsung, may design them for use in a range of conditions, including challenging physical environments, or develop products similar to ours. In addition to competition or potential competition from large, established companies, new companies may emerge and offer competitive products. Further, we are aware that certain companies have developed cameras designed and labeled to appear similar to our products, which may confuse consumers or distract consumers from purchasing our products.

 

Increased competition may result in pricing pressures and reduced profit margins and may impede our ability to continue to increase the sales of our products or cause us to lose market share, any of which could substantially harm our business and results of operations

 

Seasonality

 

Our business, as well as the industry in which we operate, is not seasonal.

 

Intellectual Property

 

We currently have a patent pending on a new product

 

Other than the aforementioned pending patent, we have no registered or patented intellectual property. Trademarks and trade names distinguish the various companies from each other. If customers are unable to distinguish our products from those of other companies, we could lose sales to our competitors. We do not have any registered trademarks and trade names, so we only have common law rights with respect to infractions or infringements on its products. Many subtleties exist in product descriptions, offering and names that can easily confuse customers. The name of our principal products may be found in numerous variations of the name and descriptions in various media and product labels. This presents a risk of losing potential customers looking for our products and buying someone else’s because they cannot differentiate between them.

 

Employees

 

As of the date of this report, we have three full time employees including Paul Feldman who is our Director, Chief Executive Officer and Chief Financial Officer. Mr. Feldman spends approximately sixty (60) hours per week on our business. We have one full time employees who provide clerical and administrative services and one full time sales person.

 

None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppages. We maintain good relationships with our employees.

 

ITEM 1A. RISK FACTORS

 

In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries, including the United States, and infections have been reported globally. The spread of COVID-19 has affected segments of the global economy and may affect our operations.

 

Our business has been disrupted, but the extent to which the coronavirus impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact. International stock markets have begun to reflect the uncertainty associated with the slow-down in the American, European, and Asian economies, and the reduced levels of international travel experienced since the beginning of January 2020 and the significant decline in the Dow Industrial Average in February and March 2020, was largely attributed to the effects of COVID-19.

 

 
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The COVID-19 outbreak is a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could materially impact our efforts to effectuate a business combination.

 

ITEM 2: PROPERTIES

 

We occupy approximately 1600 square feet at 1600 Olive Chapel Rd., Apex, NC 27502-6764 pursuant to a lease agreement which expires on November 30, 2020. Our annual rent payments for this location are $19,800 in year 1 and $20,394 in year 2.

 

ITEM 3: LEGAL PROCEEDINGS

 

We are not aware of any pending or threatened litigation against us that we expect will have a material adverse effect on our business, financial condition, liquidity, or operating results. We cannot assure you that we will not be adversely affected in the future by legal proceedings.

 

ITEM 4: MINE SAFETY DISCLOSURE

 

Not Applicable.

 

 
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PART II

 

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Our common stock trades on the Over the Counter Markets Group Inc. Pink tier under the symbol “FPVD”.

 

The following table sets forth the closing high and low bid quotations of our common stock for each quarter during the past two fiscal years as reported by the OTC:

 

 

 

As of April 30, 2019

 

Fiscal Year 2019

 

High*

 

 

Low*

 

First quarter ended July 31, 2018

 

$ 0.0012

 

 

$ 0.0002

 

Second quarter ended October 31, 2018

 

$ 0.0003

 

 

$ 0.0001

 

Third quarter ended January 31, 2019

 

$ 0.0003

 

 

$ 0.0001

 

Fourth quarter ended April 30, 2019

 

$ 0.0002

 

 

$ 0.0001

 

 

 

 

As of April 30, 2018

 

Fiscal Year 2018

 

High*

 

 

Low*

 

First quarter ended July 31, 2017

 

$ 0.2290

 

 

$ 0.0121

 

Second quarter ended October 31, 2017

 

$ 0.0400

 

 

$ 0.0062

 

Third quarter ended January 31, 2018

 

$ 0.0067

 

 

$ 0.0025

 

Fourth quarter ended April 30, 2018

 

$ 0.0040

 

 

$ 0.0007

 

 

Transfer Agent

Our Transfer Agent is Interwest Transfer Co., Inc. located at 1981 Murray Holladay Road, Suite 100, Salt Lake City, Utah. Their telephone number is 801-272-9294 and their website is www.interwesttc.com.

 

Holders

As of April 13, 2020, there are approximately 41 holders of record of our common stock in certificate form, exclusive of those brokerage firms and/or clearing houses holding our Common Stock in street name for their clientele (with each such brokerage house and/or clearing house being considered as one holder). We have 841,184,289 shares of common stock issued and outstanding.

 

Dividend Policy

We have not paid any dividends to the holders of our common stock and we do not expect to pay any such dividends in the foreseeable future as we expect to retain our future earnings for use in the operation and expansion of our business.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

At the present time, we have no securities authorized for issuance under equity compensation plans.

 

Additional Information

 

Copies of our annual reports, quarterly reports, current reports, and any amendments to those reports, are available free of charge on the internet at www.sec.gov. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document, in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward Looking Statements

 

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Report. Some of the statements contained in this Report that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

 

·

Our ability to attract and retain management, and to integrate and maintain technical information and management information systems;

·

Our ability to raise capital when needed and on acceptable terms and conditions;

·

The intensity of competition;

·

General economic conditions; and

·

Changes in government regulations.

  

 
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The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

 

Overview

The Company is in the business of selling video and audio capture devices initially targeted to law enforcement agencies. The Company has established a web site at www.forceprovideo.com whereby customers can view the Company’s products and place orders. We believe that given recent current events between law enforcement agencies and the public, which has been widely reported by the media, there is a significant market opportunity for the Company’s products.

 

Products

Our video and audio capture devices are compact, ergonomic, tamperproof and designed to capture HD video and/or audio on demand enabling our customers to capture content while engaged in a wide range of activity. We also sell accessories that enhance the functionality and versatility of our products, including mounts, such as the helmet, handlebar, roll bar and tripod mounts, as well as mounts that enable users to wear the camera on their bodies, such as the wrist housing, chest harness and head strap. Other accessories include spare batteries, charging accessories and memory drives. Our products are marketed primarily to law enforcement due to their unique need to capture important events in the course of their duties.

 

Our primary hardware products consist of our undercover surveillance devices which are restricted sales items to law enforcement agencies, the LE10 Law Enforcement Video Recorder, the LE15 and LE50 and the Recon 2000 HD Body Cams and evidence software as well as the SC1 Sunglass Camera.

 

Distribution

Customers purchase products from our website and by telephone order. All products are shipped from our manufacturer to our facility in North Carolina where we process and ship product to our customers using Federal Express or United Parcel Services. Customers pay all shipping charges.

 

Marketing

Currently, our sales and marketing efforts include print marketing catalogs featuring our products to state and local law enforcement agencies. We create and deliver brochures and catalogs to state and local law enforcement, every four (4) weeks, using U.S. Mail.

 

Results of Operations

As of April 30, 2019, we had total assets of $44,342 and total liabilities of $766,471. Since our inception to April 30, 2019, we have an accumulated a deficit of $4,573,287 and negative cash flows from operations of $41,461. We anticipate that we will continue to incur losses for the foreseeable future. Our financial statements have been prepared assuming that we will continue as a going concern. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through the sale of equity or debt securities.

 

Year Ended April 30, 2019 Compared with the year ended April 30, 2018

 

Revenue

Revenue is generated from the sale of our video and audio capture devices and related accessories. For the year ended April 30, 2019, the Company recognized $163,740 of revenue compared to $159,672 during the year ended April 30, 2018. The increase in sales is due to the introduction of our line of covert video surveillance devices as well as an increase in product demand and the implementation of our marketing strategy. To increase future sales volume, the Company has begun to actively seek out and submit competitive product quotes in response to police department requests for quotes (“RFQ”) as well as the continued introduction of new products.

 

 
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Gross profit

The Company incurred a gross loss of $20,668 during the year ended April 30, 2019 compared to a gross profit of $86,376 during the year ended April 30, 2018. Our Gross margin collapsed in 2019 primarily due to lower of cost-or-market adjustments to inventory and the recognition of minimum software license fees for salable product with no meaningful corresponding product sales. The Company anticipates fluctuations in the mix of product sales and expects its gross margin to fluctuate due to changes in product mix.

 

Operating Expenses

General and administrative costs include costs related to personnel, professional fees, travel and entertainment, public company costs, product development, insurance and other office related costs. General and administrative costs decreased by $278,457 to $212,914 during the year ended April 30, 2019 compared to $491,371 during the year ended April 30, 2018. General and administrative costs decreased during 2019 primarily due to lower costs related to professional services, personnel, travel and product development costs.

 

Sales and marketing costs include costs to promote and sell our products. Sales and marketing costs decreased by $79,504 to $9,303 during the year ended April 30, 2019 compared to $88,807 the year ended April 30, 2018. Sales and marketing costs decreased due to more strategic marketing activities.

 

Other Income (Expense)

The elements of other income (expense) primarily relate to our convertible promissory notes. During the year ending April 30, 2019, the Company recorded $63,788 in default penalties associated with three convertible notes payable. During the years ended April 30, 2019 and 2018, the Company incurred $103,992 and $43,141, respectively, of interest expense related to the stated interest of our notes; and $134,753 and $499,475, respectively, of accretion of the debt discount resulting from note issuance fees and the beneficial conversion feature contained on our convertible promissory notes. In addition, during the year ending April 30, 2019, the Company recognized a gain on the sale of assets of $1,593 compared to a loss of $648 during the year ended April 30, 2018.

 

Liquidity and Working Capital

 

Our principal source of liquidity is cash in the bank and salable inventory. As of April 30, 2019, our current assets totaled $7,210 and were comprised of $397 in cash and $6,813 of accounts receivable. As of April 30, 2019, we had negative working capital of $747,347 and negative cash flows from operations of $41,461. For the year ended April 30, 2019, we had a net loss of $543,825, accumulated deficit of $4,573,287, and stockholders’ deficit of $727,129. These conditions raise doubt about our ability to continue as a going concern. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. We expect to raise additional funds through private or public equity investment in order to expand the range and scope of business operations. We will try to raise additional funds through private or public equity but there is no assurance that such additional funds will be available for us to finance our operations on acceptable terms, if at all. If we are unable to raise additional capital or generate positive cash flow, it is unlikely that we will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

During the year ended April 30, 2019, net cash flows used by operating activities was $41,461, compared to $495,107 during the year ended April 30, 2018.

 

During the year ended April 30, 2019, net cash flows provided by investing activities was $6,646, compared to net cash flows used in investing activities of $3,746 during the year ended April 30, 2018.

 

During the year ended April 30, 2019, we generated net cash flows from financing activities of $28,892 primarily from the issuance of short-term loans compared to $316,400 from the issuance of convertible promissory notes during the year ended April 30, 2018. To date, we have financed our operations primarily through the issuance of debt and equity.

 

 
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Publicly Reporting Company Considerations

 

We will face several material challenges of operating as a publicly reporting company and we expect to incur significant costs and expenses applicable to us as a public company. We anticipate that our ongoing costs and expenses of complying with our public reporting company obligations will be approximately $50,000 annually, which we expect to pay for out of proceeds from our financing efforts during the next twelve months from the date of this report. Subsequent to the next twelve-month reporting and compliance period, we expect to pay for our publicly reporting company compliance and reporting costs from our gross profits, although there is no assurance that sufficient revenues will be generated to cover said costs. We must structure, establish, maintain and operate our Company under corporate policies designed to ensure compliance with all required public company laws, rules and regulations, including, without limitation, the Securities Act of 1933, the Securities Act of 1934, the Sarbanes- Oxley Act of 2002, the Foreign Corrupt Practices Act and the respective rules and regulations promulgated thereunder. Some of our more significant challenges of being a publicly reporting company will include the following:

 

·

We will have to carefully prepare and file, in the format mandated by the SEC, all periodic filings as required by the Securities Exchange Act of 1934 (Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and interim reports of material significant events on Form 8-K), as well as insider reporting compliance for all officers and director under Section 16 of the Securities Exchange Act of 1934 on Forms 3, 4 and 5;

 

 

·

We will have to assure that our corporate governance principles and Board minutes are properly drafted and maintained;

 

 

 

 

·

We will have to carefully analyze and assess all disclosures in all forms of public communications, including periodic SEC filings, press releases, website postings, and investor conferences to assure legal compliance;

 

 

 

 

·

We will have assured corporate and SEC legal compliance with respect to proxy statements and information statements circulated for our annual shareholder meetings, shareholder solicitations and other shareholder information events;

 

 

 

 

·

We will have to assure securities law compliance for all equity-based employee benefit plans, including registration statements and prospectus distribution procedures;

 

 

 

 

·

We will have to continuously analyze the specific impact on our Company of all significant SEC initiatives, policies, proposals and developments, as well as assess the rules of the Public Company Accounting Oversight Committee on governance procedures of the Company and our audit committee;

 

 

 

 

·

We will have to comply with the specific listing requirements of a stock exchange if we qualify and apply for such listing;

 

 

 

 

·

Being a public company increases our director and officer liability insurance costs;

 

 

 

 

·

We will have to interface with our Transfer Agent regarding issuance and trading of our common stock, which may include Rule 144 stock transfer compliance matters; and

 

 

 

 

·

We will incur additional costs for legal services as a function of our needs to seek guidance on securities law disclosure questions and evolving compliance standards.

 

We have assigned a high priority to corporate compliance and our public company reporting obligations, however, there can be no assurance that we will have sufficient cash resources available to satisfy our public company reporting and compliance obligations. If we are unable to cover the cost of proper administration of our public company compliance and reporting obligations, we could become subject to sanctions, fines and penalties, our stock could be barred from trading in public capital markets and we may have to cease operations.

 

Our actual results may differ from our projections if there are material changes in any of the factors or assumptions upon which we have based our projections. Such factors and assumptions, include, without limitation, the development of our proprietary technology platform and our products, the timing of such development, market acceptance of our products, protection of our intellectual property, our success in implementing our strategic, operating and personnel initiatives and our ability to commercialize our products, any of which could impact sales, costs and expenses and/or planned strategies and timing. As a result, it is possible that we may require significantly more capital resources to meet our capital needs.

  

 
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Off- Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Critical Accounting Estimates

 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that have a significant impact on the results that we report in our financial statements. Some of our 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. Certain of these significant accounting policies require us to make critical accounting estimates, as defined below.

 

A critical accounting estimate is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:

 

 

·

we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and

 

·

different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

 

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

Our most critical accounting estimates include:

 

 

·

the recognition and measurement of current and deferred income taxes, which impact our provision for taxes

 

·

Fair value measurements

 

Below, we discuss this policy further, as well as the estimates and judgments involved.

 

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current period and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

 

When accounting for Uncertainty in Income Taxes, first, the tax position is evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company’s utilization of U.S. Federal net operating losses will be limited in accordance to Section 381 rules. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

  

 
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Fair Value Measurements

Fair value is 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. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

 

Level 1 — Quoted prices for identical assets and liabilities traded in active exchange markets, such as the national stock exchanges.

 

Level 2 — Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.

 

Level 3 — Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data.

 

The Company has various processes and controls in place to ensure that fair value is reasonably estimated. Where market information is not available to support internal valuations, independent reviews of the valuations are performed and any material exposures are evaluated.

 

Many of our financial instruments are issued in conjunction with the issuance of debt. At the time of issuance, we allocate the proceeds received to the various financial instruments and this involves the determination of fair value. From time to time, the fair value of these financial instruments exceeds the proceeds received. When this occurs, we critically evaluate the validity of the fair value computation.

  

 
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ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

 

INDEX TO FINANCIAL STATEMENTS

 

Reports of Independent Registered Public Accounting Firms

 

 

14-15

 

 

 

 

 

 

Consolidated Balance Sheets

 

 

16

 

 

 

 

 

 

Consolidated Statements of Operations

 

 

17

 

 

 

 

 

 

Consolidated Statements of Stockholders’ Deficit

 

 

18

 

 

 

 

 

 

Consolidated Statements of Cash Flows

 

 

19

 

 

 

 

 

 

Notes to Consolidated Financial Statements

 

 

20

 

 

 
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Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of Force Protection Video Equipment Corp:

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of Force Protection Video Equipment Corp. (the Company) as of April 30, 2019 and the related consolidated statements of income, changes in stockholders’ deficit, and cash flows for the year ended April 30, 2019, 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 April 30, 2019, and the results of its operations and its cash flows for the year ended April 30, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financials have been prepared assuming the Company will continue as a going concern. As of April 30, 2019, the Company had an accumulated deficit of $4,573,287, has negative working capital of $747,347, and net cash used in operations of $41,461. The Company has generated limited revenue and may continue to experience losses in the near term. These factors and the need for additional financing in order for the Company to meet its business plan, raise substantial doubt about its ability to continue as a going concern. Management’s plan to continue as a going concern is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated 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 audits. 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 audit, 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 consolidated 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 consolidated 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.

 

 

Very truly yours,

 

/s/Assurance Dimensions

 

 

 

We have served as the Company’s auditor since 2019

 

Margate, Florida

 

 

 

July 23, 2020

 

 

 
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of Force Protection Video Equipment Corp.

 

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Force Protection Video Equipment Corp. (the Company) as of April 30, 2018, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended April 30, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2018, and the results of its operations and its cash flows for the year ended April 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

The accompanying consolidated financials have been prepared assuming the Company will continue as a going concern. As of April 30, 2018, the Company had accumulated losses of approximately $4,000,000, has $440,000 working capital deficit and has generated limited revenue, and may experiences losses in the near term. These factors and the need for additional financing in order for the Company to meet its business plan, raise substantial doubt about its ability to continue as a going concern. Management’s plan to continue as a going concern is also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. 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 audit, 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 consolidated 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 consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

 

/s/Soles, Heyn & Company LLP

We have served as the Company’s auditor since 2018. Soles,

 

Heyn & Company, LLP

West Palm Beach, Florida August 14, 2018

 

 
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Table of Contents

 

Force Protection Video Equipment Corp

 

 

 

 

 

 

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

April 30,

 

 

April 30,

 

 

 

2019

 

 

2018

 

ASSETS

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 397

 

 

$ 6,320

 

Accounts receivable

 

 

6,813

 

 

 

9,235

 

Inventory

 

 

-

 

 

 

117,889

 

Prepaid inventory

 

 

-

 

 

 

8,798

 

Total current assets

 

 

7,210

 

 

 

142,242

 

 

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $11,049 and $7,922, respectively

 

 

6,274

 

 

 

16,669

 

Operating lease right of use asset

 

 

29,208

 

 

 

45,001

 

Deposits

 

 

1,650

 

 

 

1,650

 

Total assets

 

$ 44,342

 

 

$ 205,562

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 263,173

 

 

$ 99,702

 

Shareholder advance

 

 

14,650

 

 

 

7,500

 

Deferred software maintenance revenue

 

 

1,270

 

 

 

-

 

Operating lease

 

 

18,033

 

 

 

15,440

 

Loans

 

 

17,966

 

 

 

-

 

Convertible promissory notes, net of discount of $0 and $21,225, respectively

 

 

439,465

 

 

 

459,398

 

Total current liabilities

 

 

754,557

 

 

 

582,040

 

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

 

Warranty

 

 

136

 

 

 

143

 

Operating lease

 

 

11,778

 

 

 

29,811

 

Total liabilities

 

 

766,471

 

 

 

611,994

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 5)

 

 

 

 

 

 

 

 

Redeemable Preferred Stock

 

 

5,000

 

 

 

5,000

 

Series A Preferred Stock, $0.0001 par value; 20,000,000 authorized; issued and outstanding 5,000,000 at April 30, 2019 and April 30, 2018, respectively

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit)

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value 20,000,000,000 shares authorized; issued and outstanding 841,184,289 and 194,415,754 at April 30, 2019 and April 30, 2018, respectively

 

 

84,119

 

 

 

19,441

 

Additional paid-in capital

 

 

3,762,039

 

 

 

3,598,589

 

Accumulated deficit

 

 

(4,573,287 )

 

 

(4,029,462 )

Total stockholders’ equity (deficit)

 

 

(727,129 )

 

 

(411,432 )

Total liabilities and stockholders’ equity (deficit)

 

$ 44,342

 

 

$ 205,562

 

 

 

 

 

 

 

 

 

 

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

  

 
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Table of Contents

 

Force Protection Video Equipment Corp

Consolidated Statements of Operations

For the Years Ended April 30, 2019 and 2018

 

 

 

April30,

2019

 

 

April 30,

2018

 

Income

 

 

 

 

 

 

Net revenue

 

$ 163,740

 

 

$ 159,672

 

Cost of goods sold

 

 

184,408

 

 

 

73,296

 

Gross (loss)/profit

 

 

(20,668 )

 

 

86,376

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

General and administrative

 

 

212,914

 

 

 

491,371

 

Sales and marketing

 

 

9,303

 

 

 

88,807

 

Total operating expenses

 

 

222,217

 

 

 

580,178

 

Loss from operations

 

$ (242,885 )

 

$ (493,802 )

 

 

 

 

 

 

 

 

 

Other (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(103,992 )

 

 

(43,141 )

Accretion of debt discount

 

 

(134,753 )

 

 

(499,475 )

Gain (loss) on sale of asset

 

 

1,593

 

 

 

(648 )

Default financing penalties

 

 

(63,788 )

 

 

-

 

Total other (expense)

 

 

(300,940 )

 

 

(543,264 )

Loss before taxes

 

 

(543,825 )

 

 

(1,037,066 )

Provision for income taxes

 

 

-

 

 

 

-

 

Net loss

 

$ (543,825 )

 

$ (1,037,066 )

 

 

 

 

 

 

 

 

 

Net (loss) per common share basic and diluted

 

$ (0.00 )

 

$ (0.03 )

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding basic and diluted

 

 

832,752,965

 

 

 

40,926,044

 

 

 

 

 

 

 

 

 

 

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

  

 
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Table of Contents

    

Force Protection Video Corp

Consolidated Statements of Changes in Stockholders’ Deficit for the years ended April 30, 2019 and 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Common

Shares

 

 

Par

Value

 

 

Additional

Paid in

Capital

 

 

Accumulated

Deficit

 

 

Total

Deficit

 

Balance as of April 30, 2018

 

 

194,415,754

 

 

$ 19,441

 

 

$ 3,598,589

 

 

$ (4,029,462 )

 

$ (411,432 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued in satisfaction of loan debt and interest

 

 

646,768,535

 

 

 

64,678

 

 

 

50,611

 

 

 

-

 

 

 

115,289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount on convertible promissory note due to beneficial conversion feature

 

 

-

 

 

 

-

 

 

 

112,839

 

 

 

-

 

 

 

112,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(543,825 )

 

 

(543,825 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of April 30, 2019

 

 

841,184,289

 

 

$ 84,119

 

 

$ 3,762,039

 

 

$ (4,573,287 )

 

$ (727,129 )

 

 

 

Common

Shares

 

 

Par

Value

 

 

 Additional

Paid in

Capital

 

 

 Accumulated Deficit

 

 

 Total

Deficit

 

Balance as of April 30, 2017

 

 

1,698,494

 

 

$ 170

 

 

$ 3,124,098

 

 

$ (2,992,396 )

 

$ 131,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued in satisfaction of loan debt and interest

 

 

192,516,391

 

 

 

19,251

 

 

 

297,845

 

 

 

-

 

 

 

317,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash

 

 

100,000

 

 

 

10

 

 

 

590

 

 

 

 

 

 

 

600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for services

 

 

100,000

 

 

 

10

 

 

 

590

 

 

 

 

 

 

 

600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reverse stock split share adjustment

 

 

869

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount on convertible promissory note due to beneficial conversion feature

 

 

-

 

 

 

-

 

 

 

175,466

 

 

 

-

 

 

 

175,466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,037,066 )

 

 

(1,037,066 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of April 30, 2018

 

 

194,415,754

 

 

$ 19,441

 

 

$ 3,598,589

 

 

$ (4,029,462 )

 

$ (411,432 )

 

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

  

 
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Table of Contents

 

Force Protection Video Equipment Corp

Consolidated Statements of Cash Flows

For the Years Ended April 30, 2019 and 2018

 

 

 

 

 

Years Ended April 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

Net (Loss)

 

$ (543,825 )

 

$ (1,037,066 )

Adjustments to reconcile net loss to net cash provided (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

 

5,418

 

 

 

5,224

 

Accretion of debt discount

 

 

134,753

 

 

 

499,475

 

Debt financing penalties

 

 

63,788

 

 

 

-

 

Impairment of asset (inventory)

 

 

110,418

 

 

 

-

 

Share based compensation expense

 

 

-

 

 

 

600

 

Gain (loss) on sale of asset

 

 

(1,593 )

 

 

648

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

2,422

 

 

 

(7,497 )

(Increase) decrease in inventory

 

 

4,722

 

 

 

(13,761 )

(Increase) decrease in other assets

 

 

15,793

 

 

 

(25,351 )

Increase (decrease) in accounts payable and accrued expenses

 

 

162,780

 

 

 

37,742

 

Increase (decrease) in other liabilities

 

 

3,863

 

 

 

44,879

 

Net cash (used) by operating activities

 

 

(41,461 )

 

 

(495,107 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of equipment and vehicles

 

 

-

 

 

 

(8,246 )

Proceeds from disposal of vehicle

 

 

6,646

 

 

 

4,500

 

Net cash (used) by investing activities

 

 

6,646

 

 

 

(3,746 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

 

-

 

 

 

600

 

Proceeds from sale of preferred stock

 

 

-

 

 

 

4,000

 

Proceeds from short term loans

 

 

39,574

 

 

 

-

 

Repayments of short-term loans

 

 

(23,332 )

 

 

-

 

Proceeds from shareholder advance

 

 

13,150

 

 

 

7,500

 

Repayments of shareholder advance

 

 

(6,000 )

 

 

-

 

Proceeds from convertible promissory notes

 

 

5,500

 

 

 

304,300

 

Net cash provided by financing activities

 

 

28,892

 

 

 

316,400

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash

 

 

(5,923 )

 

 

(182,453 )

Cash and cash equivalents at beginning of year

 

 

6,320

 

 

 

188,773

 

Cash and cash equivalents at end of year

 

$ 397

 

 

$ 6,320

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$ 1,060

 

 

$ -

 

Cash paid for income taxes

 

$ -

 

 

$ -

 

Non-cash operating activities:

 

 

 

 

 

 

 

 

Common stock issued as compensation

 

$ -

 

 

$ 600

 

Common stock issued for principal and interest on convertible notes payable

 

$ 115,289

 

 

$ 317,096

 

Operating lease right of use asset

 

$ -

 

 

$ 51,063

 

 

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

  

 
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FORCE PROTECTION VIDEO EQUIPMENT CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2019 AND 2018

 

NOTE 1 – ORGANIZATION AND SUMMARY of significant accounting policies

 

Organization

Force Protection Video Equipment Corp., together with its wholly owned subsidiary, Cobraxtreme HD Corp. (collectively, the Company), is in the business of selling video and audio capture devices and accessories to consumers and law enforcement. Force Protection Video Equipment Corp. was incorporated on March 11, 2011, under the laws of the State of Florida. On February 2, 2015 the Company changed its name to Force Protection Video Equipment Corp.

 

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

 

Going Concern

The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America and applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

 

During the years ended April 30, 2019 and 2018, the Company had a net operating loss of $543,825 and $1,037,066, respectively. As of April 30, 2019, the Company had negative working capital of $747,347, an accumulated deficit of $4,573,287, and net cash used in operations of $41,461.

 

In view of these conditions, the ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon funds from the sale of shares of stock, issuance of promissory notes and loans from its shareholders and private investors to finance its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount of capital that it can access. These consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

 

Earnings Per Share

Basic income per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, Earnings Per Share.

 

The computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS, if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money).

 

 
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Following is the computation of basic and diluted net loss per share for the years ended April 30, 2019 and 2018:

 

 

 

For the Years Ended

 

 

 

April 30,

 

 

April 30,

 

 

 

2019

 

 

2018

 

Basic and Diluted EPS Computation

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

Loss available to common stockholders’

 

$ (543,825 )

 

$ (1,037,066 )

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

832,752,965

 

 

 

40,926,044

 

 

 

 

 

 

 

 

 

 

Basic and diluted EPS

 

$ (0.00 )

 

$ (0.03 )

 

 

 

 

 

 

 

 

 

Potentially dilutive securities are not included in the calculation of diluted net loss per share attributable to common stockholders, because to do so would be anti-dilutive. Common stock equivalents pertaining to the Company’s Convertible Notes are as follows:

 

 

 

 

 

 

 

 

 

Convertible notes, principal and accrued interest

 

 

9,649,685,143

 

 

 

1,425,915,102

 

Convertible notes, penalties potentially settled in common stock

 

 

-

 

 

 

-

 

Total convertible note common stock equivalents

 

 

9,649,685,143

 

 

 

1,425,915,102

 

 

Concentrations of risk

During the year ended April 30, 2019, no customers accounted for greater than 10% of sales; while during the twelve months ended April 30, 2018, two customers accounted for 34.5% (24.1% and 10.4%) of sales.

 

The Company relies on third parties for the supply and manufacture of its capture devices, some of which are sole-source suppliers. The Company believes that outsourcing manufacturing enables greater scale and flexibility. As demand and product lines change, the Company periodically evaluates the need and advisability of adding manufacturers to support its operations. In instances where a supply and manufacture agreement does not exist or suppliers fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to its customers on time, if at all. During the year ended April 30, 2019, there were no inventory purchases. During the year ended April 30 2018, four suppliers accounted for 62.6% (19.2%, 16.9%, 14.3% and 12.2%) of the Company’s inventory purchases.

 

Summary of Significant Accounting Policies

 

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Our most significant estimates are for stock-based compensation; assumptions used in calculating derivative liabilities, and deferred tax valuation allowances. We evaluate our estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

 

 
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Cash and Cash Equivalents

Cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at either April 30, 2019 or 2018.

 

Cash Flow Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

 

Inventory

The Company’s inventory is comprised of finished goods and primarily includes cameras and recording equipment. The Company’s inventory is stated at the lower of cost or market and expensed to cost of goods sold upon sale using the average-cost method. The Company also makes prepayments against the future delivery of inventory classified as prepaid inventory. During the year ended April 30, 2019, the Company wrote down $110,418 of obsolete inventory. The Company plans to become a drop ship third-party seller that will reduce the need to carry inventory.

 

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances. The Company does not have a history of significant bad debt and has not recorded any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve with none this period.

 

Leases

In accordance with ASU 2016-02, Leases (Topic 842), the Company recognizes lease assets and liabilities with terms in excess of twelve months on its balance sheet. The Company capitalizes operating lease obligations as a right-of-use asset with a corresponding liability based on the present value of future operating leases.

 

Property and Equipment

Fixed assets are carried at cost, less accumulated depreciation and amortization. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.

 

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. Depreciation for financial statement purposes is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

 

 

 

Estimated

 

 

Useful Lives

Vehicles

 

5 years

Office Equipment

 

3 - 5 years

Furniture & equipment

 

5 - 7 years

 

 
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Long-Lived Assets

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

 

Income Taxes

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.

 

Accounting for Uncertainty in Income Taxes

 

The Company applies the provisions of ASC Topic 740-10-25, Income Taxes – Overall – Recognition (“ASC Topic 740-10-25”) with respect to the accounting for uncertainty of income tax positions. ASC Topic 740-10-25 clarifies the accounting for uncertainty in income taxes recognized in a company’s consolidated financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-25 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of April 30, 2019, tax years since 2009 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years.

 

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) and Accounting Standards Codification (“ASC”) Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers (“ASC 340-40”), (collectively, “Topic 606”). On May 1, 2018, the Company adopted Topic 606 by applying the modified retrospective method of adoption for all contracts that were not substantially completed as of the adoption date. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. The Company implemented ASU 2014-09 for the interim and annual reporting periods of 2019, which resulted in no changes to how we recognize revenue.

 

Our revenue is generated from the sale of products consisting primarily of video and audio capture devices and accessories. We recognize revenue when control of our products is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. We consider a performance obligation satisfied once we have transferred control of a product to the customer, meaning the customer has the ability to use and obtain the benefit of the product. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. Revenue from product sales is generally recognized upon shipment to the end customer, which is when control of the product is deemed to be transferred. Payment or invoicing typically occurs upon shipment and the term between invoicing and when payment is due is not significant. Revenue is recorded net of discounts and promotions and is disaggregated based on significant product line. Refer to Note 6. Segments and Geographic Data.

 

 
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Marketing and Advertising Costs

Marketing and advertising costs are expensed as incurred. The Company recognized $9,303 and $88,807 in marketing and advertising costs during the twelvemonths ended April 30, 2019 and 2018, respectively.

 

Stock Based Compensation

Under ASC 718, Compensation – Stock Compensation, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

 

In July 2019, the FASB released Accounting Standards Update (ASU) No. 2018-09, Codification Improvements. ASU 2018-09 that affect a wide variety of Topics in the FASB Accounting Standards Codification including the guidance in paragraph 718-740-35-2, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting is unclear on whether an entity should recognize excess tax benefits (or tax deficiencies) for compensation expense that is taken on the entity’s tax return. The amendment to paragraph 718-740-35-2 in this update clarifies that an entity should recognize excess tax benefits (that is, the difference in tax benefits between the deduction for tax purposes and the compensation cost recognized for financial statement reporting) in the period in which the amount of the deduction is determined. This includes deductions that are taken on the entity’s return in a different period from when the event that gives rise to the tax deduction occurs and the uncertainty about whether (1) the entity will receive a tax deduction and (2) the amount of the tax deduction is resolved.

 

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that have a significant impact on the results that we report in our financial statements. Some of our 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. Certain of these significant accounting policies require us to make critical accounting estimates, as defined below.

 

A critical accounting estimate is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:

 

 

·

we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and

 

 

 

 

·

different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

  

Many of our financial instruments are issued in conjunction with the issuance of debt. At the time of issuance, we allocate the proceeds received to the various financial instruments and this involves the determination of fair value. From time to time, the fair value of these financial instruments exceeds the proceeds received. When this occurs, we critically evaluate the validity of the fair value computation.

 

 
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Financial Instruments

The Company’s balance sheets include the following financial instruments: cash, accrued expenses, notes payable and payables to a stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the notes payable and amounts due to stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities.

 

FASB Accounting Standards Codification (ASC) topic, “Fair Value Measurements and Disclosures”, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also 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 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 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 defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

  

Beneficial Conversion Features

ASC 470-20 applies to convertible securities with beneficial conversion features that must be settled in stock and to those that give the issuer a choice in settling the obligation in either stock or cash. ASC 470-20 requires that the beneficial conversion feature should be valued at the commitment date as the difference between the conversion price and the fair market value of the common stock into which the security is convertible, multiplied by the number of shares into which the security is convertible. This amount is recorded as a debt discount and amortized over the life of the debt. ASC 470-20 further limits this amount to the proceeds allocated to the convertible instrument.

 

Recent Accounting Pronouncements

We have reviewed all FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

In August 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement. The new standard modifies disclosure requirements including removing requirements to disclose the valuation process for Level 3 measurements and adding requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. The new standard is effective for interim and annual periods beginning after December 15, 2019. The Company does not expect adoption of ASU 2018-13 to have a material impact on its financial statements or disclosures.

 

 
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In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company does not expect adoption of ASU 2017-11 to have a material impact on its consolidated financial statements.

 

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment awards require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company implemented ASU 2017-09 for the interim and annual reporting periods of 2019, which resulted in no impact on its consolidated financial statements.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) and Accounting Standards Codification (“ASC”) Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers (“ASC 340-40”), (collectively, “Topic 606”). On May 1, 2018, the Company adopted Topic 606 by applying the modified retrospective method of adoption for all contracts that were not substantially completed as of the adoption date. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. The Company implemented ASU 2014-09 for the interim and annual reporting periods of 2019, which resulted in no changes to how we recognize revenue.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Conforming Amendments Related to Leases. This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the statement of condition and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. The new lease guidance was effective for fiscal years beginning after December 15, 2018, and had a material effect on the Company’s financial statements as noted further in Note 5. The Company early adopted this standard during fiscal year 2018.

 

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, the Company has not identified any standards that it believes merit further discussion. The Company believes that none of the new standards will have a significant impact on its consolidated financial statements.

 

 
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NOTE 2 - Fixed Assets

 

Fixed assets consisted of the following:

 

 

 

April 30,

 

 

April 30,

 

 

 

2019

 

 

2018

 

Vehicles

 

$ -

 

 

$ 7,654

 

Furniture and fixtures

 

 

9,656

 

 

 

10,936

 

Computers and office equipment

 

 

4,226

 

 

 

4,226

 

Leasehold improvements

 

 

1,775

 

 

 

1,775

 

Total fixed assets

 

 

15,657

 

 

 

24,591

 

Accumulated depreciation

 

 

(9,383 )

 

 

(7,922 )

Total fixed assets

 

$ 6,274

 

 

$ 16,669

 

 

The Company sold two assets during the year ending April 30, 2019 for an aggregate of $6,646 in cash and the Company recognized a gain on the sale of assets in the amount of $1,593. During the year ended April 30, 2018, the Company sold a vehicle for proceeds of $4,500 and recorded a loss on the sale of $648.

 

During the twelve months ended April 30, 2019 and 2018, the Company recognized $5,418 and $5,224, respectively in depreciation expense.

 

NOTE 3 – CONVERTIBLE PROMISSORY NOTES

 

The Company determined that each convertible promissory note conversion feature is indexed to the Company’s stock, which is an input to a fair value measurement of a fixed-for-fixed option on equity shares. Thus, the conversion feature of the notes meets the scope exception under FASB Accounting Standards Codification (“ASC”) 815-40-15-7 and treatment under ASC 470-20 – Debt with Conversion and Other Options is appropriate.

 

As of April 30, 2019, seven of the Company’s convertible promissory notes remain outstanding beyond their respective maturity dates; triggering an event of technical default under the respective agreements. Consequently, the Company is accruing interest on these notes at their respective default rates and has recorded default penalties of $63,788 in the aggregate. As a result of being in default on these notes, the Holders could, at their sole discretion, call these Notes in their entirety, including all associated penalties provided for under the respective agreements.

 

As of April 30, 2019, the Company owed $439,465 in principal and $147,456 in accrued interest on its remaining outstanding convertible promissory notes. As of April 30, 2018, the Company owed $480,623 in principal (before a debt discount of $21,225) and $62,281in accrued interest (included in accounts payable and accrued expenses) on its remaining outstanding convertible promissory notes.

 

 

 

April 30,

2019

 

 

April 30,

2018

 

Convertible promissory notes, various lending institutions, maturing at variable dates ranging from 180 days to one year from origination date, 8-12% interest and default interest of 12-24%, convertible at discount to trading price (60-61%) based on various measurements of prior trading, at face value of remaining original note principal balance, net of unamortized debt discounts and attributable deferred financing costs in the amount of $0 and $21,225, respectively.

 

 

 

 

 

 

Principal

 

$ 439,465

 

 

$ 480,623

 

Debt discount

 

 

-

 

 

 

(21,225 )

Total Principal

 

$ 439,465

 

 

$ 459,398

 

 

 
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Table of Contents

  

Summary of Convertible Note Transactions:

 

April 30,

2019

 

 

April 30,

2018

 

 

 

 

 

 

 

 

Convertible notes, May 1

 

$ 480,623

 

 

$ 427,128

 

Additional notes, face value

 

 

5,500

 

 

 

363,375

 

Default Penalties

 

 

63,788

 

 

 

-

 

Payments and adjustments

 

 

-

 

 

 

-

 

Settlement of debt

 

 

-

 

 

 

-

 

Conversions of debt

 

 

(110,446 )

 

 

(309,880 )

Unamortized debt discounts

 

 

-

 

 

 

(21,225 )

Convertible notes, balance

 

$ 439,465

 

 

$ 459,398

 

 

RDW Capital, LLC

The RDW Notes have identical terms and conditions including convertibility into common stock at the holder’s option, at a price for each share of common stock equal to 60% of the lowest traded price during the twenty (20) trading days immediately preceding the applicable conversion, and subject to anti-dilution and market adjustments set forth in the Agreement. The Notes mature in six months and bear an interest rate of 8%. In no event shall RDW effect a conversion if such conversion results in RDW beneficially owning in excess of 4.99% of the outstanding common stock of the Company. The Notes and accrued interest may be prepaid in whole or in part at any time with ten (10) days written notice to the holder for the sum of the outstanding principal and interest multiplied by one hundred and thirty percent (130%). Any principal and interest unpaid when due shall bear interest at 24% and RDW may accelerate the outstanding principal, plus accrued and unpaid interest, and other amounts owing through the date of acceleration and the amount due will be one hundred thirty percent (130%) of the outstanding principal amount of the Note and accrued and unpaid interest. In the event the Company defaults on the accelerated balance, and at the request of the Holder, the Company must pay one hundred fifty percent (150%) of the outstanding balance plus accrued interest and default interest. Acceleration by the Holder requires notice to the Company and to date, the Company has not received a notice of acceleration. The Company is required to reserve three (3) times the number of shares necessary for the issuance of common stock upon conversion; however, as of April 30, 2019, RDW Capital agreed to forego the reserve requirement called for under the Note.

 

Note 3 - On March 10, 2016, the Company entered into a Securities Purchase Agreement and amendments thereto, with RDW Capital, LLC, pursuant to which the Company received $210,000 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $180,000 after payment of $30,000 in legal fees.

 

The principal was discounted for the OID, due diligence fees, stock issued to an advisor in connection with the note totaling $18,000, and the intrinsic value of the beneficial conversion feature. The calculated intrinsic value was $227,391. As this amount resulted in a total debt discount that exceeded the note principal, the discount recorded for the beneficial conversion feature was limited to the principal amount of the note.

 

The Note became due and payable on September 10, 2016 and the Company is in default of its obligations under the Note and the default interest rate of 24% per annum is being accrued beginning on September 11, 2016.

 

During the years ended April 30, 2019 and 2018, respectively, the Company issued no common shares for payment on the note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $792 and $792 in principle and $0 and $0 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 13,196,334.

 

 
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Note 4 - On May 13, 2016, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC pursuant to which the Company received $105,000 in financing through the execution of a Convertible Promissory Note (RDW Note 4). The Company received proceeds of $82,500 after payment of a $5,000 OID and $17,500 of legal and due diligence fees.

 

The principle was discounted for the value of the OID, legal and due diligence fees and intrinsic value of the BCF. The calculated intrinsic value was $70,000. As this amount resulted in a total BCF debt discount that was less than note principal, the full $70,000 discount was recognized and accreted over the 6-month term of the Note.

 

The Note became due and payable on November 13, 2016 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum is being accrued beginning on November 14, 2016.

 

During the years ended April 30, 2019 and 2018, respectively, the Company issued no common shares for interest payments on the Note. During the year ended April 30, 2017, the Company issued 71,341,227 common shares for a value of $105,000, satisfying the note principal, and leaving a balance due of $4,540 in accrued interest.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $0 and $0 in principle and $4,540 and $4,540 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 75,664,694.

 

Note 5 - On May 20, 2016, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC pursuant to which the Company received $52,500 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $45,000 after payment of a $2,500 OID and $5,000 of due diligence fees.

 

The principle was discounted for the value of the OID, legal and due diligence fees and intrinsic value of the BCF. The calculated intrinsic value was $35,000. As this amount resulted in a total BCF debt discount that was less than note principal, the full $35,000 discount was recognized. The resulting $42,500 discount was accreted over the 6-month term of the Note.

 

The Note became due and payable on November 20, 2016 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum is being accrued beginning on November 21, 2018.

 

During the years ended April 30, 2019 and 2018 respectively, the Company issued no common shares for the remaining accrued interest on the Note. During the year ended April 30, 2017, the Company issued 116,769 common shares for a value of $52,500, satisfying the note principal, and leaving a balance due of $2,742 in accrued interest.

 

As of April 30, 2019, and 2018, respectively, the Company owed $0 and $0 in principle and $2,742 and $2,742 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 45,706,301.

 

Note 6 - On August 22, 2016, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC pursuant to which the Company received $157,500 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $130,000 after payment of a $7,500 OID and $20,000 of legal and due diligence fees.

 

The principle was discounted for the value of the OID, legal and due diligence fees and intrinsic value of the BCF. The calculated intrinsic value was $105,000. As this amount resulted in a total BCF debt discount that was less than note principal, the full $105,000 discount was recognized. The resulting $132,500 discount was accreted over the 6-month term of the Note.

 

 
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The Note became due and payable on February 22, 2017 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum has been accrued beginning on February 23, 2017.

 

During the year ended April 30, 2019, the Company issued no common shares for payment on the Note. During the year ended April 30, 2018, the Company issued 4,919,733 common shares for a value of $38,890..During the year ended April 30, 2017, the Company issued 474,212 common shares for a value of $125,826, satisfying the note principal, and leaving a balance due of $889 in accrued interest.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $0 and $0 in principle and $889 and $889 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 14,817,664.

 

Note 7 – In connection with RDW SPA 4 under which RDW agreed to purchase an aggregate of up to $367,500 in principal amount of notes, on September 1, 2016, the Company issued to RDW a convertible note due on March 1, 2017 in the principal amount of $157,500 of which the Company received proceeds of $130,000 after payment of a $7,500 OID and legal and due diligence fees totaling $20,000. The second tranche for $210,000 will occur on the date that is two trading days from the date a registration statement is declared effective by the SEC. On March 16, 2018, the Company and RDW agreed to amend the Note to extend the Maturity Date to October 31, 2018.

 

The principle was discounted for the value of the OID, legal and due diligence fees and intrinsic value of the BCF. The calculated intrinsic value was $105,000. As this amount resulted in a total BCF debt discount that was less than note principal, the full $105,000 discount was recognized. The resulting $132,500 discount was accreted over the 6-month term of the Note.

 

The Note became due and payable on October 31, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum has been accrued beginning on November 1, 2018.

 

During the year ended April 30, 2019, the Company issued no common shares for payment on the Note. During the year ended April 30,2018, the Company issued 24,585,900 common shares for a value of $131,800, and was applied to the Note principal.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $25,700 and $25,700 in principle and $22,221 and $15,074 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 798,697,280.

 

Note 8 – On February 6, 2017, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC, pursuant to which the Company received $210,000 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $180,000 after payment of $10,000 OID and legal and due diligence fees totaling $20,000. On March 16, 2018, the Company and RDW agreed to amend the Note to extend the Maturity Date to October 31, 2018.

 

The principle was discounted for the value of the OID, legal and due diligence fees and intrinsic value of the BCF. The calculated intrinsic value was $217,000. As this amount resulted in a total debt discount that exceeded the principal, the discount recorded for the BCF was limited to the principal amount of the Note. The resulting $210,000 discount was accreted over the 6-month term of the Note.

 

The Note became due and payable on October 31, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum began accruing on November 1, 2018 and the Company has recorded a default penalty of $23,625, which increases the principle balance of the note.

 

During the year ended April 30, 2019 and 2018, respectively, the Company issued 57,100,000 and 53,560,000 common shares for a value of $14,754 and $32,437, and was applied to the Note principal.

 

 
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As of April 30, 2019, and April 30, 2018, respectively, the Company owed $1,221 and $15,975 in principle and $9,914 and $5,512 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 185,767,820.

 

Note 9 – On March 30, 2017, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC, pursuant to which the Company received $78,750 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $62,500 after payment of $3,750 OID and legal and due diligence fees totaling $12,500. On March 16, 2018, the Company and RDW agreed to amend the Note to extend the Maturity Date to October 31, 2018.

 

The principle was discounted for the value of the OID, fees and intrinsic value of the BCF. The calculated intrinsic value was $72,000. As this amount resulted in a total debt discount that exceeded the principal, the discount recorded for the BCF was limited to the principal amount of the Note. The resulting $78,750 discount was accreted over the 6-month term of the Note.

 

The Note became due and payable on October 31, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum began accruing on November 1, 2018.

 

During the year ended April 30, 2019, the Company issued 130,800,000 common shares for a value of $16,322, and was applied to the principal on the Note. During the year ended April 30, 2018, the Company issued no common shares for payment on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $86,053 and $78,750 in principle and $22,833 and $7,243 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 814,760,939.

 

Note 10 – On April 26, 2017, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC, pursuant to which the Company received $110,000 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $90,000 after payment of $10,000 OID and legal fees totaling $10,000. On March 16, 2018, the Company and RDW agreed to amend the Note to extend the Maturity Date to October 31, 2018.

 

The principle was discounted for the value of the OID, fees and intrinsic value of the BCF. The calculated intrinsic value was $134,000. As this amount resulted in a total debt discount that exceeded the principal, the discount recorded for the BCF was limited to the principal amount of the Note. The resulting $110,000 discount was accreted over the 6-month term of the Note.

 

The Note became due and payable on October 31, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum began accruing on November 1, 2018.

 

During the year ended April 30, 2019, the Company issued no shares on the Note. During the year ended April 30, 2018, the Company issued 100,218,200 shares, satisfying the principle balance of the Note.

 

As of April 30, 2019, and 2018, respectively, the Company owed $7,510 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 125,169,335.

 

Note 11 – On May 30, 2017, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC, pursuant to which the Company received $78,750 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $65,000 after payment of $3,875 OID and legal and due diligence fees totaling $9,875. On March 16, 2018, the Company and RDW agreed to amend the Note to extend the Maturity Date to October 31, 2018.

 

 
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The principle was discounted for the value of the OID and issuance fees. The BCF intrinsic value was $102,000. As this amount resulted in a BCF that exceeded the Note proceeds, accretion of the BCF was limited to $65,000 which was accreted over the 6-month term of the Note.

 

The Note became due and payable on October 31, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum began accruing on November 1, 2018 and the Company has recorded a default penalty in the amount of $24,413, which was added to the principle balance of the Note.

 

During the years ended April 30, 2019 and 2018, the Company issued no shares on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $105,788 and $81,375 in principal and $24,784 and $6,288 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 2,176,205,030.

 

Note 12 – On August 7, 2017, the Company entered into a Securities Purchase Agreement with RDW Capital, LLC, pursuant to which the Company received $52.500 in financing through the execution of a Convertible Promissory Note. The Company received proceeds of $46,000 after payment of $2.500 OID and legal and due diligence fees totaling $4.000. On March 16, 2018, the Company and RDW agreed to amend the Note to extend the Maturity Date to October 31, 2018.

 

The principle was discounted for the value of the OID and issuance fees. The BCF intrinsic value was $107,283. As this amount resulted in a BCF that exceeded the Note proceeds, accretion of the BCF was limited to 46,000 which was accreted over the 6-month term of the Note.

 

The Note became due and payable on October 31, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 24% per annum began accruing on November 1, 2018 and the Company has recorded a default penalty in the amount of $15,750, which was added to the principle balance of the Note.

 

During the years ended April 30, 2019 and 2018, respectively, the Company issued no shares against the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $68,250 and $52,500 in principal and $14,979 and $3,197 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 1,387,141,670.

  

Power Up Lending Group Ltd.

The Power Up Notes have identical terms and conditions, including convertibility into common stock, at the holder’s option any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note, at a price for each share of common stock equal to 61% of the average of the lowest two (2) trading prices during the twenty (20) trading days immediately preceding the applicable conversion. In no event shall Power Up effect a conversion if such conversion results in Power Up beneficially owning in excess of 4.99% of the outstanding common stock of the Company. The Notes and accrued interest may be prepaid within the 180-day period following the issuance date at an amount equal to 115% - 140% of the outstanding principle and unpaid interest. After expiration of the 180 days, the Note may not be prepaid. Any principal and interest unpaid when due shall bear interest at 22%. Upon the occurrence of an event of default the balance of principle and interest shall become immediately due at the default amount which is equal to the sum of the unpaid principal and unpaid interest multiplied by 150%.

 

 
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Power Up Settlement

On March 15, 2019, the Company received a Notice of Default from 111 Recovery Corp, as Assignee from Power Up Lending Group, Ltd. The Notice stated that the Company was in default of one or more Convertible Promisory Notes which, prior to the default, had aggregate and outstanding principal balances of $97,950. The Notice stated that as a result of the default, 111 Recovery Corp is demanding immediate payment of $146,925. On October 8, 2018, the Company and the assignee of Power Up, “Recovery”, agreed to settle the amount of all outstanding Notes, in final settlement of all related claims for the aggregate sum of $146,925. At closing, the Company was obligated to pay the first installment of $30,000; the second installment of $15,000 due on October 22, 2019, and the third and final amount of $15,000 by November 5, 2019. Should the Company fail to pay the settlement amount by the deadline, Recovery shall have all rights under the Notes and SPA’s to convert the debt amount into common stock of the Company pursuant to the terms and provisions of the Notes. Recovery, in addition, is entitled to obtain an affirmative injunction from the Court which injunction shall remain in full force and effect until Recovery has converted the debt obligation. Recovery will also have the right to enter a money judgement and have immediate execution thereon for the default amount together with accrued and unpaid interest and full default interest against the Company, giving the Company credit for all sums received by Recovery prior to enforcement. The Company subsequently met all the terms of the final settlement.

 

Power Up Note 1 – On October 20, 2017 the Company sold a 12% convertible note in the principal amount of $70,000 of which the Company received $60,300 after payment of legal fees of $9,700. The Note matured on July 30, 2018 and bears a default interest rate of 22%.

 

The intrinsic value of the BCF was computed as the difference between the fair value of the common stock issuable upon conversion of the Note and the total price to convert based on the effective conversion price on the date of issuance. The calculated intrinsic value was $44,754 and is being accreted over the 10-month term of the Note.

 

During the year ended April 30, 2019, the Company issued 243,760,201 common shares in satisfaction of $66,030 in principle and $4,200 in accrued interest. During the year ended April 30, 2018, the Company issued 9,232,558 common shares in satisfaction of $3,970 in principle on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $0 and $66,030 in principal and $0 and $4,554 in accrued interest.

 

Power Up Note 2 – On November 16, 2017, the Company sold a 12% convertible note in the principal amount of $36,000 of which the Company received $30,000 after payment of legal fees of $6,000.

 

The intrinsic value of the BCF was computed as the difference between the fair value of the common stock issuable upon conversion of the Note and the total price to convert based on the effective conversion price on the date of issuance. The calculated intrinsic value was $23,016 and is being accreted over the 9.5-month term of the Note.

 

The Note became due and payable on August 30, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 22% per annum began accruing on August 31, 2018.

 

During the year ended April 30, 2019, the Company issued 138,791,667 common shares for a value of $9,050, which was applied against the principal on the Note. During the year ended April 30, 2018, the Company issued no shares against the balance on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $26,950 and $36,000 in principal and $9,850 and $2,006 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 603,279,747. The number of common shares the Company is required to have in reserve on the note is 1,809,839,240.

 

 
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Power Up Note 3 – On January 5, 2018 the Company sold a 12% convertible note in the principal amount of $38,000 of which the Company received $32,000 after payment of legal fees.

 

The intrinsic value of the BCF was computed as the difference between the fair value of the common stock issuable upon conversion of the Note and the total price to convert based on the effective conversion price on the date of issuance. The calculated intrinsic value was $24,295 and is being accreted over the 10-month term of the Note.

 

The Note became due and payable on October 10, 2018 and the Company is in default of its obligations under the Note. The default interest rate of 22% per annum began accruing on October 11, 2018.

 

During the years ended April 30, 2019 and 2018, the Company issued no shares against the balance on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $38,000 and $38,000 in principal and $8,961 and $1,464 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to hold in its reserves is equal to the amount required to satisfy the Note, which is 769,851,266.The number of common shares the Company is required to have in reserve on the note is 2,309,553,798.

 

Power Up Note 4 – On January 5, 2018 the Company sold a 12% convertible note in the principal amount of $33,000 of which the Company received $27,500 after payment of legal fees. The Note matures on December 15, 2018 and bears interest at 12%.

 

The intrinsic value of the BCF was computed as the difference between the fair value of the common stock issuable upon conversion of the Note and the total price to convert based on the effective conversion price on the date of issuance. The calculated intrinsic value was $21,098 and is being accreted over the 9-month term of the Note.

 

During the years ended April 30, 2019 and 2018, the Company issued no shares against the balance on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $33,000 and $33,000 in principal and $6,357 and $613 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to hold in its reserves is equal to the amount required to satisfy the Note, which is 645,204,813.The number of common shares the Company is required to have in reserve on the note is 1,935,614,439.

 

Adar Bays, LLC

The Adar Notes bear interest at the rate of 8% per annum. All interest and principal must be repaid on or before March 5, 2019. After six months, the Adar Notes are convertible into common stock, at Adar’s option, at a conversion price equal to 60% of the lowest trading price of our common stock during the 20 prior trading days prior to conversion. The Company is required to reserve three (3) times the number of shares necessary for the issuance of common stock upon conversion. The two Adar Collateralized Notes may only be converted by Adar in the event they are paid in full. In addition, the Note contains pre-payment penalties. The Company is only required to make payments on the Back-End Notes if Adar funds the Collateralized Notes.

 

Adar has agreed to restrict its ability to convert the Adar Notes and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The Adar Notes are a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. The Adar Notes also provides for penalties and rescission rights if the Company does not deliver shares of its common stock upon conversion within the required timeframes. In the event of default, the note interest rate increases to 24%.

 

 
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Adar Settlement

On October 3, 2019, the Company and Adar Bays, LLC agreed to enter into a Payment Agreement to settle the amounts outstanding on two previously outstanding Notes, whereby the Company would repay the debt in three installments; $37,000 by October 4, 2019, $18,750 by October 23, 2019, and $18,750 by November 23, 2019. The Company subsequently met all the terms of the final settlement.

 

Adar Note 1 - On March 5, 2018, the Company entered into a Securities Purchase Agreement with Adar Bays, LLC providing for the purchase of a Convertible Promissory Note in the principal amount of $52,500; and two Collateralized Secured Promissory Notes also in the amount of $52,500 each (the “Adar Collateralized Notes”) and the delivery by the Company of two Back End Notes payable to Adar each in the principal amount of $52,500. The first $52,500 financing closed on March 5, 2018 with the Company receiving net proceeds of $43,500 after payment of legal fees of $6,500 and a 5%, or $2,500 original issue discount. On May 24, 2018 Adar funded $5,789 under one of the Adar Collateralized Notes with the Company receiving net proceeds of $5,500 after payment of a 5% original issue discount.

 

The intrinsic value of the Adar Notes beneficial conversion feature exceeded their proceeds thereby limiting the accretion of the BCF to $43,500 and $5,500 for Adar Note 1 and the Adar Collateralized Note, respectively. Accretion is over the 12-month term of the Adar Notes.

 

During the year ended April 30, 2019, the Company issued 76,316,667 shares against the principle balance on the Note.

 

As of April 30, 2019, and April 30, 2018, respectively, the Company owed $53,710 and $52,500 in principal and $14,904 and $648 in accrued interest.

 

As of April 30, 2019, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 994,400,796. The number of common shares the Company is required to have in reserve is 2,983,202,389, which is equal to three times the amount sufficient to satisfy the note at each measurement date.

 

NOTE 4 - SHORT TERM LOANS

 

On September 25, 2018, the Company repaid the then outstanding balance of the ACH Loan totaling $13,372 with funds received from Strategic Funding Source, Inc.

 

On September 25, 2018, the Company borrowed $39,574 from Strategic Funding Source, Inc. under the Loan Agreement. Pursuant to the terms of the Loan Agreement, the Company received $13,233 of proceeds after deductions for $395 of service fees and $11,340 related to interest. Repayment is achieved through 246 daily bank account withdrawals of $156. The Loan Agreement is secured by all current and future assets of the Company. As of April 30, 2019, the Company was in arrears under the terms of the Agreement by $13,104 and the balance owed on the note was $17,966, after a debt discount of $10,234.

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

Product Warranties

The Company’s manufacturer(s) provide the Company with a 2-year warranty. The Company products are sold with a 1-year manufacturer’s warranty. The Company offers a 1-year extended warranty for a fee. The extended warranty expires at the end of the second year from the date of purchase with warranty costs during the two-year period being born by the manufacturer. As a result, the Company has no, or limited warranty liability exposure.

 

 
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Operating Leases

On November 15, 2017, the Company entered into a lease of office space at 1600 Olive Chapel Road, Apex, North Carolina 27502. The lease expires on November 30, 2020 and includes an option to extend the lease an additional term or three years. Rent is $1,650 per month and is increased each anniversary by 3%. The Company paid a $1,650 security deposit. The Company had early adopted ASC 2016-2; Leases (Topic 842) during fiscal year 2018. As a result, the Company was required to estimate and record the right of use asset (“ROU Asset”) and lease liability on the face of the Company’s balance sheet. Accordingly, the new lease guidance became effective for the Company on May 1, 2017, which is the beginning of the earliest comparative period presented in the financial statements in which the Company first applies the new lease accounting guidance.

 

During fiscal year 2018, the Company determined the ROU Asset and lease liability to be $51,063 which compares to the total, undiscounted cash flow payments of the initial three-year term of $61,200. As of April 30, 2018, since the right of use asset and lease liability were the same, there was not adjustment to retained earnings. The company determined that there was no discount rate implicit in the lease. Thus, the Company used its incremental borrowing rate of 12% to discount the lease payments in the determination of the ROU asset and lease liability.

 

On March 21, 2015, the Company entered into a lease of office space at 130 Iowa Lane, Suite 102, Carry, North Carolina 27511. During January, 2018, the Company moved and this lease was terminated with no further obligations.

 

The Company has no other non-cancelable operating leases. The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of April 30, 2019:

 

Fiscal Year

 

 

 

2020

 

$ 20,649

 

2021

 

$ 12,253

 

 

 

$ 32,902

 

 

As of April 30, 2019, total operating lease liability was as follows:

 

Total undiscounted cash flows

 

$ 32,902

 

Less unamortized interest

 

 

(3,091 )

Total operating lease liability

 

$ 29,811

 

Less short-term liability

 

$ (18,033 )

Total long-term operating lease liability

 

$ 11,778

 

 

During the twelve months ended April 30, 2019 and 2018, operating lease expense for rent for office space totaled $17,905 and $17,119, respectively.

 

NOTE 6 - SEGMENT AND GEOGRAPHIC DATA

 

Contract assets represent accrued revenues that have not yet been billed to the customers due to certain contractual terms other than the passage of time. For the twelve months ended April 30, 2019, the Company did not have any contract assets. Receivables from customers are included in current assets on the consolidated balance sheet. Due to the nature of our sales transactions, we have elected the following practical expedients: (i) Shipping and handling costs are treated as fulfillment costs. Accordingly, shipping and handling costs are classified as a component of Cost of goods sold while amounts billed to customers are classified as a component of Net Sales.

  

 
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The Company’s operations are disaggregated as follows. All of the Company’s revenues are derived from business in North America. The following tables disaggregate our revenue by major product line, type of customer, and timing of revenue recognition:

  

Major Product Lines

 

Product Lines

 

Revenue

 

 

% of sales

 

Cameras

 

$ 150,940

 

 

 

92.18 %

Accessories

 

 

7,210

 

 

 

4.40 %

Software

 

 

5,590

 

 

 

3.41 %

Total Net Revenue

 

$ 163,740

 

 

 

100.00 %

 

Types of Customers

 

Customer Type

 

% of sales

 

Federal

 

 

91.00 %

State, Local

 

 

2.00 %

Non-government

 

 

7.00 %

Total Net Revenue

 

 

100.00 %

 

Timing of Revenue Recognition

 

 

 

Revenue

 

 

Percentage

 

Transferred at a point in time

 

$ 163,740

 

 

 

100.00 %

Transferred over time

 

 

-

 

 

 

0 %

Total Net Revenue

 

$ 163,740

 

 

 

100.00 %

  

NOTE 7 – INCOME TAXES

 

The Company accounts for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under 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.

 

The Tax Cuts and Jobs Act of 2017 changed the top corporate federal tax rate from 35% to one rate of 21%. This rate will be effective for corporations whose tax year begins after January 1, 2018, and it is a permanent change. Under ASC 740, the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The resulting amendments to IRC Section 172 disallow the carryback of net operating losses but allow for the indefinite carryforward of those net operating losses. Pursuant to Section 172(e)(2) of the statute, the amended carryback and carryover rules apply to any net operating loss arising in a taxable year ending after December 31, 2017. In addition to the carryover and carryback changes, the Act also introduces a limitation on the amount of net operating losses that a corporation may deduct in a single tax year under section 172(a) equal to the lesser of the available net operating loss carryover or 80 percent of a taxpayer’s pre-NOL deduction taxable income (the ”80-percent limitation”). This limitation applies only to losses arising in tax years that begin after December 31, 2017 based upon section 172(e)(1) of the amended statute. The Company also has a state tax rate of approximately 3% for fiscal year 2019 and 2018.

 

 
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April 30,

 

 

 

2019

 

 

2018

 

Income tax provision (benefit) at blended rate

 

$ (132,000 )

 

$ (217,784 )

Nondeductible items

 

 

-

 

 

 

105,325

 

Subtotal

 

 

(132,000 )

 

 

(112,460 )

Change in valuation allowance

 

 

132,000

 

 

 

112,460

 

Income Tax Expense

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Net deferred tax assets and liabilities were comprised of the following:

 

 

 

 

 

 

 

 

Net Operating Losses

 

$ 552,679

 

 

$ 420,679

 

Valuation allowance

 

 

(522,679 )

 

 

(420,679 )

Deferred tax asset, net

 

$ -

 

 

$ -

 

 

As of April 30, 2019, the Company has estimated tax net operating loss carryforwards of approximately $4 million, which can be utilized or expire in 2037 and the remainder is carried forward indefinitely.

 

The Company has adopted the accounting guidance related to uncertain tax positions, and has evaluated its tax positions and believes that all of the positions taken by the Company in its tax returns are more likely than not to be sustained upon examination. The Company returns are subject to examination by federal and state taxing authorities generally for three years after they are filed.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

The majority shareholder has advanced funds since inception for the purpose of financing working capital. As of April 30, 2019, and 2018, the Company owed $14,650 and $7,500, respectively. The advances are payable upon demand and non-interest bearing.

  

During the year ended April 30, 2018, the Company issued 4,000,000 shares of the Company’s Series A Preferred Shares to its sole director and chief executive officer in exchange for $4,000.

  

Pursuant to the Employment Agreement for the Company’s CEO which was extended for an additional three years to November 30, 2020, Mr. Feldman is entitled to an annual salary of $100,000. As of April 30, 2019, the Company owed deferred compensation in the amount of $16,538 as Mr. Feldman has agreed to defer until such time the Company has sufficient cash flows to support his salary under the agreement.

 

NOTE 9 –REDEEMABLE PREFERRED STOCK AND StockholderS’ DEFICIT

 

Redeemable Preferred Stock

As of April 30, 2019, and April 30, 2018, respectively, there were 5,000,000 shares of par value $0.0001, Series A Preferred Stock outstanding. The Preferred Stock pays no dividends and has no conversion rights into common stock. Each share of Preferred Stock is entitled to 200 votes per share and is redeemable in whole, but not in part, at the option of the holder for $0.0001 per share. Due to the redemption feature being at the option of the holder, the Company classifies the purchase price in the temporary equity section of the balance sheet.

 

During the year ended April 30, 2018, the Company issued 4,000,000 shares of Series A Preferred Stock to Paul Feldman, CEO in exchange for $4,000. Each Series A preferred share is entitled to 200,000 (i.e., 200:1) votes per share and carries no right of conversion into shares of common stock.

 

 
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Common Stock

As of April 30, 2019, and April 30, 2018, there were 841,184,289 and 194,415,754 shares of common stock outstanding, respectively.

 

As of April 30, 2019, and 2018, respectively, the Company accreted its debt discounts related to the beneficial conversion feature in our convertible promissory notes in the amounts of $113,286 and $433,316.

 

On September 20, 2018, the Company amended its Articles of Incorporation to affect a 1:1,000 reverse stock split. As of the date of this filing, the Company is waiting for FINRA to approve this corporate action. All share amounts included in this report have not been updated to reflect the reverse split.

 

On May 17, 2018, the Company filed its Amended Articles of Incorporation which increased its authorized common stock to 20,000,000,000 shares and it Series A Preferred to 20,000,000 shares, with no changes in par value. The increase in the common stock was made necessary because of the reserves required by the Company’s holders of convertible notes.

 

During the twelve months ended April 30, 2019, the Company issued an aggregate of 646,768,535 shares of common stock in exchange for convertible notes and accrued interest totaling $115,289.

 

During the year ended April 30, 2018, the Company issued 192,516,391 shares of common stock in exchange for convertible notes totaling $317,096. In addition, a total of 100,000 common shares were issued for cash in the amount of $600, and 100,000 common shares were issued for services and valued at $600.

 

NOTE 10 – SUBSEQUENT EVENTS

 

On October 3, 2019, the Company and Adar Bays, LLC agreed to enter into a Payment Agreement to settle the amounts outstanding on two previously outstanding Notes, whereby the Company would repay the debt in three installments; $37,000 by October 4, 2019, $18,750 by October 23, 2019, and $18,750 by November 23, 2019. The Company subsequently met all the terms of the final settlement.

 

On October 11, 2019, the Company entered into a secured promissory note with RDW Capital, LLC in the amount of $27,500. The Note matures on April 11, 2020 and bears an interest rate of 5%. Interest payments are due and payable on the 90-day anniversary of the execution of the note, and with the principal payment of the note on or before the maturity date. In security for the note, the Company’s President has pledged the Preferred Shares of the Company registered on the books of the Company in his or designees name and shall be the sole recourse the Note Holder has in relation to repayment of the Note. The Company subsequently satisfied the balance of the Note by the due date.

 

Pursuant to a Securities Purchase Agreement originally dated August 8, 2017, the Company entered into additional convertible promissory notes with RDW Capital, LLC for aggregate proceeds of $208,256. The Notes mature six months from the respective dates of issuance, bear interest at 8%, and are convertible into common stock of the Company at the Holder’s option. The conversion price for each share of common stock is equal to 60% of the lowest traded price during the twenty (20) trading days immediately preceding the applicable conversion (subject to anti-dilution and market adjustments set forth in the Agreement). Upon the occurrence of any default, and at the Holder’s option, the Holder may require the Company to convert all or any part of the Note into common stock at the Alternative Conversion Price which is 50% of the lowest traded price during the twenty (20) days prior to the conversion date. In no event shall RDW effect a conversion if such conversion results in RDW beneficially owning in excess of 4.99% of the outstanding common stock of the Company. The Notes and accrued interest may be prepaid in whole or in part at any time with ten (10) days written notice to the holder for the sum of the outstanding principal and interest multiplied by one hundred and thirty percent (130%). Any principal and interest unpaid when due shall bear interest at 24% and RDW may accelerate the outstanding principal, plus accrued and unpaid interest, and other amounts owing through the date of acceleration and the amount due will be one hundred thirty percent (130%) of the outstanding principal amount of the Note and accrued and unpaid interest. In the event the Company defaults on the accelerated balance, and at the request of the Holder, the Company must pay one hundred fifty percent (150%) of the outstanding balance plus accrued interest and default interest. The Company is required to reserve three (3) times the number of shares necessary for the issuance of common stock upon conversion.

 

On October 15, 2019, the Company was notified that the Notes held by RDW Capital, LLC, were assigned by them to RedDiamond Partners, LLC in a private transaction. The terms of the original Notes remained unchanged.

 

Power Up Settlement

On October 8, 2018, the Company and the assignee of Power Up, “Recovery”, agreed to settle the amount of all outstanding Notes, in final settlement of all related claims for the aggregate sum of $146,925. At closing, the Company was obligated to pay the first installment of $30,000; the second installment of $15,000 due on October 22, 2019, and the third and final amount of $15,000 by November 5, 2019. Should the Company fail to pay the settlement amount by the deadline, Recovery shall have all rights under the Notes and SPA’s to convert the debt amount into common stock of the Company pursuant to the terms and provisions of the Notes. Recovery, in addition, is entitled to obtain an affirmative injunction from the Court which injunction shall remain in full force and effect until Recovery has converted the debt obligation. Recovery will also have the right to enter a money judgement and have immediate execution thereon for the default amount together with accrued and unpaid interest and full default interest against the Company, giving the Company credit for all sums received by Recovery prior to enforcement. The Company subsequently met all the terms of the final settlement.

 

 
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ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

On October 14, 2019, the Registrant was informed by Soles, Heyn & Company, LLP (“SH”) that the firm was resigning and thus terminating its services as the Registrant’s independent registered public accounting firm effective October 14, 2019. On October 16, 2019, the Registrant retained Assurance Dimensions as its principal independent accountants. The decision to retain Assurance Dimensions as the Registrant’s principal independent accountants was approved by the Registrant’s Board of Directors.

 

ITEM 9A: CONTROLS AND PROCEDURES

 

(a) Evaluation of Disclosure Controls and Procedures

 

As of April 30, 2019, under the direction of the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a — 15(e) under the Securities Exchange Act of 1934, as amended. Based on the evaluation of these controls and procedures required by paragraph (b) of Sec. 240.13a-15 or 240.15d-15 the disclosure controls and procedures have been found to be ineffective.

 

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

(b) Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of 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 in accordance with 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. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

 

 
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Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of April 30, 2019. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on that evaluation, our management concluded that as of the end of the fiscal year covered by this Annual Report on Form 10-K that our internal control over financial reporting has not been effective due to the following material weaknesses:

 

(1) Lack of segregation of duties. Management has found it necessary to limit the Company’s administrative staffing in order to conserve cash, until the Company’s level of business activity increases. As a result, there is limited segregation of duties amongst the employees, and the Company has identified this as a material weakness in the Company’s internal controls. The Company intends to remedy this material weakness by hiring additional employees and reallocating duties, including responsibilities for financial reporting, among the employees as soon as there are sufficient resources available. However, until such time, this material weakness will continue to exist. Despite the limited number of employees and limited segregation of duties, management believes that the Company is capable of following its disclosure controls and procedures effectively.

 

(2) Lack of in-house US GAAP Expertise. Our current accounting personnel perform adequately in the basic accounting and recordkeeping function. However, our operations and business practices include complex technical accounting issues that are outside the routine basic functions. These technical accounting issues are complex and require significant expertise to ensure that the accounting and reporting are accurate and in accordance with generally accepted accounting principles.

 

 (3) Lack of formal documentation. We maintain very informal controls over the billing and invoicing procedures. As a result, invoicing delays have occurred. This is a significant material weakness in the billing cycle because this will cause inaccuracies in the ultimate completion of the sale, which is the collection of cash. Also, sales cutoff complications could arise due to these delays in billing. Bills should be sent to customers as soon as possible to expedite payment and otherwise keep the accounting system current.

 

We frequently are unable to obtain appropriate shipping documentation from the shipping department. Better controls need to be placed over these documents because they may be required for such things as supporting claims that deliveries to customers have been made and the goods were received in satisfactory condition.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permanently exempts non-accelerated filers (generally issuers with a public float under $75 million) from complying with Section 404(b) of the Sarbanes-Oxley Act of 2002.

 

(c) Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

  

ITEM 9B: OTHER INFORMATION 

 

None.

 

 
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PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE DIRECTORS AND EXECUTIVE OFFICERS

 

The following table presents information with respect to our officers, directors and significant employees as of April 30, 2019:

 

Name

 

Age

 

Position

Paul Feldman

 

55

 

Chief Executive Officer, President and Chief Financial Officer, Director

 

Biographical Information Regarding Officers and Directors

 

Mr. Feldman has served as our sole Director, President, CEO and CFO since February 1, 2015. From October 2011 to January 29, 2015, Mr. Feldman served as President of Cobra Xtreme Video, Inc. which sold video cameras to consumers and had sales in excess of $300,000 Prior to that, Mr. Feldman had been an officer and director of a publicly traded company. From 2001 through August 2009, Mr. Feldman served as President and a Director of Law Enforcement Associates, Inc. (LEA) whose common stock was previously listed on the OTCBB and the American Stock Exchange. LEA was in the business of manufacturing surveillance products and audio intelligent devices which were sold to the military and law enforcement. In his last year at LEA, Mr. Feldman helped LEA increase its net sales to over $10,000,000. In addition, Mr. Feldman was a named inventor on multiple patents relating to video surveillance

 

Term of Office

 

All of our directors are appointed for a one-year term to hold office until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the Board of Directors, and are elected or appointed to serve until the next Board of Directors meeting following the annual meeting of stockholders. Our executive officers are appointed by our Board of Directors and hold office until removed by the Board.

 

 Significant Employees

 

At the present time, we have only one significant employee, our President, Mr. Paul Feldman whose employment agreement provides for a base salary of $100,000 per year. For the year ended April 30, 2019, Mr. Feldman has agreed to permanently forego his compensation until such time the Company’s revenues support the agreed upon compensation.

 

Family Relationships

 

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, during the past five years, none of the following occurred with respect to a present director (or person nominated to become director), executive officer, founder, promoter or control person: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. 

 

 
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Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16 of the Exchange Act requires our Directors, executive officers, and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports of beneficial ownership (Form 3) and reports of changes in beneficial ownership (Forms 4 and 5) of our Common Stock and our other equity securities. Officers, Directors, and greater than 10% shareholders are required by the SEC’s regulations to furnish us with copies of all Section 16(a) reports they file.

 

Based solely upon a review of Forms 3 and 4 furnished to the company under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year and Forms 5 furnished to the company with respect to its most recent fiscal year and any written representations received by the company from persons required to file such forms, the following persons – either officers, directors or beneficial owners of more than ten percent of any class of equity of the company registered pursuant to Section 12 of the Securities Exchange Act – failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year or prior fiscal years:

 

 

 

# of Late Reports

 

# of Transactions

Not Timely Reported

 

# of Failures to File

a Required Report

Paul Feldman

 

0

 

8

 

1

 

Code of Ethics

 

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. To the knowledge of the Company, there have been no reported violations of the Code of Ethics.

  

Whistleblower Procedures Policy

 

In accordance with the requirements of Section 301 of the Sarbanes-Oxley Act of 2002, the Board of Directors of the Company has adopted a Whistleblower Procedures Policy, stating that all employees of the Company are strongly encouraged to report any evidence of financial irregularities which they may become aware of, including those with respect to internal controls, accounting or auditing matters. Under the Whistleblower Procedures Policy, the management of the Company shall promptly and periodically communicate to all employees with access to accounting, payroll and financial information the means by which they may report any such irregularities. In the event an employee is uncomfortable for any reason reporting irregularities to his or her supervisor or other management of the Company, employees may report directly to any member of the Board of Directors of the Company. The identity of any employee reporting under these procedures will be maintained as confidential at the request of the employee, or may be made on an anonymous basis. Notice must be provided to all of the Company’s employees with access to accounting, payroll and financial information in respect of these procedures.

 

The Company does not have any Committees of the Board

 

CORPORATE GOVERNANCE

 

Director Independence

 

We are not listed on a major U.S. securities exchange and, therefore, are not subject to the corporate governance requirements of any such exchange, including those related to the independence of directors. Upon our listing on any national securities exchange or any inter-dealer quotation system, we will elect such independent directors as is necessary under the rules of any such securities exchange.

 

Board Leadership Structure

 

We currently have one executive officer who is also a Director. Our Board has reviewed the Company’s current Board leadership structure. In light of the Company’s size, nature of the Company’s business, regulatory framework under which the Company operates, stockholder base, the Company’s peer group and other relevant factors, the Company has determined that this structure is currently the most appropriate Board leadership structure for our company. Nevertheless, the Board intends to carefully evaluate from time to time whether our current structure should be modified based on what the Board believes is best for the Company and our stockholders.

 

 
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Board Role in Risk Oversight

 

Risk is inherent in every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including strategic risks, enterprise risks, financial risks, and regulatory risks. While our management is responsible for day to day management of various risks we face, the Board, as a whole, is responsible for evaluating our exposure to risk and to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board reviews and discusses policies with respect to risk assessment and risk management. The Board also has oversight responsibility with respect to the integrity of the Company’s financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements.

 

Audit Committee

 

The Board does not currently have a standing Audit Committee. The full Board performs the principal functions of the Audit Committee. The full Board monitors our financial reporting process and internal control system and reviews and appraises the audit efforts of our independent accountants.

 

Compensation Committee

 

The Board does not currently have a standing Compensation Committee. The full Board establishes our overall compensation policies and reviews recommendations submitted by our management.

 

Nominating Committee

 

The Board does not currently have a standing Nominating Committee. We do not maintain a policy for considering nominees. Our Bylaws provides that the number of Directors shall be fixed from time to time by the Board, but in no event shall be less than the minimum required by law. The Board of Directors shall be large enough to maintain our required expertise but not too large to function efficiently. Director nominees are recommended, reviewed and approved by the entire Board. The Board believes that this process is appropriate due to the relatively small number of directors on the Board and the opportunity to benefit from a variety of opinions and perspectives in determining director nominees by involving the full Board.

 

While the Board is solely responsible for the selection and nomination of directors, the Board may consider nominees recommended by stockholders as it deems appropriate. The Board evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. Although we do not have a policy regarding diversity, the Board does take into consideration the value of diversity among Board members in background, experience, education and perspective in considering potential nominees for recommendation to the Board for selection. Stockholders who wish to recommend a nominee should send nominations to our President, Paul Feldman, 1600 Olive Chapel Rd., Apex, NC 27502, that includes all information relating to such person that is required to be disclosed in solicitations of proxies for the election of directors. The recommendation must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected.

 

Compensation Consultants

 

We have not historically relied upon the advice of compensation consultants in determining Named Executive Officer compensation. Instead, the full Board reviews compensation levels and makes adjustments based on their personal knowledge of competition in the market place, publicly available information and informal surveys of human resource professionals.

 

 
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Stockholder Communications

 

Stockholders who wish to communicate with the Board may do so by addressing their correspondence to the Board at Force Protection Video Equipment Corp., Attention: Paul Feldman, 1600 Olive Chapel Rd., Apex, NC 27502. The Board shall review and respond to all correspondence received, as appropriate.

  

ITEM 11: EXECUTIVE COMPENSATION

 

Executive Compensation

 

The following table sets forth compensation for each of the past two fiscal years with respect to each person who served as an Executive Officer of the Company and each of the four most highly-compensated executive officers of the Company who earned a total annual salary and bonuses that exceeded $100,000 in any of the two preceding fiscal years.

 

Summary Compensation Table

 

Name and Principal Position

 

Year Ended

April 30,

 

Salary

($)

 

 

Bonus

($)

 

 

Option

Awards

($)

 

 

All Other Compensation

($)

 

 

Total

($)

 

Paul Feldman (1),

CEO, CFO

 

2019

 

$ 16,538

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$ 16,538

 

 

 

2018

 

$ 105,769

 

 

 

-

 

 

 

-

 

 

 

6,000

 

 

$ 111,769

 

 

(1) Mr. Feldman became the Company’s Director, President, Secretary, Chief Executive officer and Chief Financial Officer on February 1, 2015. On November 24, 2015, the Company and Mr. Feldman entered into an employment agreement. Pursuant to Mr. Feldman’s Employment Agreement, he is entitled to an annual salary of $100,000 for a term of 2 years. On December 1, 2017, Mr. Feldman’s employment agreement was extended for an additional three years to November 30, 2020. During the year ended April 30, 2019, Mr. Feldman agreed to defer his compensation until such time the Company’s revenues support the agreed upon compensation. As of April 30, 2019, the balance owed to Mr. Feldman was $16,538. Other Compensation consisted of a car allowance. We may award our officers and directors shares of common stock or stock purchase options as non-cash compensation as determined by the Board of Directors from time to time.

 

Director Compensation

 

For the years ended April 30, 2019 and 2018, respectively, the directors were not awarded any options or paid any cash compensation.

  

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth certain information as of July 1, 2019 by (i) all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock, (ii) each director, director nominee, and Named Executive Officer; and (iii) all executive officers and directors as a group:

 

* less than 1%

 

(1)Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of Company preferred stock and common stock. Except as indicated the address of each beneficial owner is 1600 Olive Chapel Rd., Apex, NC 27502.

 

 
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(2)Calculated pursuant to rule 13d-3(d) of the Exchange Act. Beneficial ownership is calculated based on 448,998,178 shares of Common Stock and 5,000,000 shares of Series A Preferred Stock issued and outstanding on a fully diluted basis as of July 1, 2018. Each share of preferred stock is entitled to vote on all matters submitted to the Company’s stockholders and are entitled to such number of votes as is equal to 200,000 times the number of shares of Series A Preferred Stock such holder owns. The Series A Preferred Stock is not convertible into shares of common stock. Under Rule 13d-3(d) of the Exchange Act, shares not outstanding which are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but are not deemed outstanding for the purpose of calculating the percentage owned by each other person listed.

 

(3)Calculated based on 448,998,178 shares of Common Stock and 5,000,000 shares of Series A Preferred Stock, with common stock equivalent voting rights of 200:1, issued and outstanding as of July 1, 2018. Holders of the Series A Preferred Stock are entitled to vote on all matters submitted to the Company’s stockholders.

 

Potential Changes in Control

 

At the present time, there are no arrangements known, including any pledge by any person of securities, the operation of which may at a subsequent date result in a change in control of the Company.

 

Stock Option Plan Information

 

To date, the Company has not adopted a Stock Option Plan. The Company may adopt an option plan in the future.

 

Adverse Interests

 

The Company is not aware of any material proceeding to which any director, officer, or affiliate of the Company, or any owner of record or beneficially of more than five percent of any class of the Company’s voting securities, or security holder is a party adverse to the Company or has a material interest adverse to the Company.

 

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

   

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

 

Except as otherwise disclosed herein, since the beginning of the last fiscal year the Company has not entered into any other transactions, nor are there any currently proposed transactions, in which the Company was, or is, to be a participant and in which any related person had or will have a direct or indirect material interest.

 

During the past five years, none of the following occurred with respect to any founder, promoter or control person: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

 

 
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ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Audit Fees

  

On October 16, 2019, the Registrant appointed Assurance Dimensions as its principal independent accountant. Prior to the appointment of Assurance Dimensions, Soles, Heyn, & Company, LLP acted as the Company’s principal independent accountant. The aggregate fees of our principal independent accountants for professional services rendered for the audit of the financial statements included in our Annual Report on Form 10-K and review of interim financial statements included in the quarterly reports on Form 10-Q for the year ended April 30, 2019 and 2018, totaled $16,000 and $26,000, respectively.

 

Audit- Related Fees

 

The Company did not pay any audit-related fees for the year ended April 30, 2019 and 2018 which are not disclosed in “Audit Fees” above.

 

Tax Fees

 

There were no tax fees billed by our principal independent accountants for tax compliance for the year ended April 30, 2019 and 2018.

 

All Other Fees

 

There were no other fees billed for services other than those described above for the years ended April 30, 2019 and 2018.

 

Audit Committee Pre--Approval Policies

 

Our sole Director reviewed the audit and non--audit services rendered by Assurance Dimensions during the periods set forth above and concluded that such services were compatible with maintaining the auditors’ independence. All audit and non--audit services performed by our independent accountants are pre-approved by our Board of Directors to assure that such services do not impair the auditors’ independence from us.

 

 
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PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

(a) The following documents are filed as a part of this Form 10-K:

  

1. Financial Statements

 

The following financial statements are included in Part II, Item 8 of this Form 10-K:

 

 

·

Report of Independent Registered Public Accounting Firm

 

·

Balance Sheets as of April 30, 2019 and 2018

 

·

Statements of Operations for the years ended April 30, 2019 and 2018

 

·

Statements of Stockholders’ Deficit for the years ended April 30, 2019 and 2018

 

·

Statements of Cash Flows for the years ended April 30, 2019 and 2018

 

·

Notes to Financial Statements

  

 2. Exhibits

 

The exhibits listed in the Exhibit Index, which appears immediately following the signature page, are incorporated herein by reference, and are filed as part of this Form 10-K.

 

3. Financial Statement Schedules

 

Financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the financial statements or notes described in Item 15(a)(1) above.

 

 
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Table of Contents

  

SIGNATURES

 

Pursuant to the requirements of Sections 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Force Protection Video Equipment Corp.

(Registrant)

       

July 23, 2020

By: /s/ Paul Feldman

 

 

Paul Feldman

 
   

Chief Executive Officer, Chief Financial Officer and Director

(Principal Executive Officer and Principal Financial Officer)

 

 

 
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Table of Contents

  

Exhibit Index

 

Exhibit No.

 

Description of Exhibit

3.1

 

Articles of Incorporation dated March 11, 2011 (1)

3.2

 

Amendment to Articles of Incorporation dated March 28, 2011 (1)

3.3

 

Amendment to Articles of Incorporation dated September 25, 2013 (1)

3.4

 

Amendment to Articles of Incorporation dated January 30, 2015 (1)

3.5

 

Amendment to Articles of Incorporation dated December 1, 2015 (1)

3.6

 

Amendment to Articles of Incorporation filed on January 19, 2016 to increase the authorized common stock outstanding from 50,000,000 to 250,000,000; par value $0.0001 and to create a series of preferred stock consisting of 1,000,000 shares designated as Series A Preferred stock; par value $0.0001 (12)

3.7

 

Amendment to Articles of Incorporation effective September 8, 2016 to increase the authorized common stock outstanding to 750,000,000; par value $0.0001 and increase Series A Preferred stock to 5,000,000; par value $0.0001 (7)

3.8

 

Bylaws (1)

3.9

 

Amendment to Articles of Incorporation filed on March 31, 2017 to reduce the number of common shares outstanding in a 1:250 reverse stock split (8)

3.10

 

Amendment to Articles of Incorporation effective December 8, 2017 to increase the authorized common stock outstanding to 2,000,000,000 and increase Series A Preferred stock to 15,000,000 (12)

10.1

 

Securities Purchase Agreement dated November 12, 2015 with RDW Capital, LLC (1)

10.2

 

First Amended Securities Purchase Agreement dated November 12, 2015 with RDW Capital LLC (1)

10.3

 

Second Amended Securities Purchase Agreement dated November 12, 2015 with RDW Capital, LLC (1)

10.4

 

Registration Rights Agreement dated November 12, 2015 with RDW Capital, LLC (1)

10.5

 

Convertible Promissory Note dated November 12, 2015 held by RDW Capital, LLC (1)

10.6

 

Convertible Promissory Note dated December 31, 2015 held by RDW Capital, LLC (2)

10.7

 

Convertible Promissory Note dated March 10, 2016 held by RDW Capital, LLC (5)

10.8

 

Third Amended Securities Purchase Agreement dated February 17, 2016 with RDW Capital, LLC (1)

10.9

 

Fourth Amended Securities Purchase Agreement dated February 17, 2016 with RDW Capital, LLC (3)

10.10

 

Securities Purchase Agreement dated May 9, 2016 with RDW Capital, LLC (4)

10.11

 

Convertible Promissory Note dated May 13, 2016 held by RDW Capital, LLC (4)

10.12

 

Convertible Promissory Note dated May 20, 2016 held by RDW Capital, LLC (5)

10.13

 

Registration Rights Agreement dated May 9, 2016 with RDW Capital, LLC (4)

10.14

 

Securities Purchase Agreement dated August 22, 2016 with RDW Capital, LLC (6)

10.15

 

Convertible Promissory Note dated August 22, 2016 held by RDW Capital, LLC (6)

10.16

 

Securities Purchase Agreement dated September 1, 2016 with RDW Capital, LLC (7)

10.17

 

Convertible Promissory Note dated September 1, 2016 held by RDW Capital, LLC (7)

10.18

 

Registration Rights Agreement dated September 1, 2016 with RDW Capital, LLC (7)

10.19

 

Convertible Promissory Note dated February 6, 2017 held by RDW Capital, LLC (9)

10.20

 

Securities Purchase Agreement dated March 31, 2017 with RDW Capital, LLC (8)

10.21

 

Convertible Promissory Note dated March 30, 2017 held by RDW Capital, LLC (8)

10.22

 

Convertible Promissory Note dated April 26, 2017 held by RDW Capital, LLC (9)

10.23

 

Convertible Promissory Note dated May 30, 2017 held by RDW Capital, LLC (9)

10.24

 

Securities Purchase Agreement dated August 8, 2017 with RDW Capital, LLC (10)

10.25

 

Convertible Promissory Note dated August 7, 2017 held by RDW Capital, LLC (10)

10.26

 

Securities Purchase Agreement dated October 20, 2017 with Power Up Lending Group, Ltd. (11)

10.27

 

Convertible Promissory Note dated October 20, 2017 with Power Up Lending Group, Ltd. (11)

10.29

 

Employment Agreement Paul Feldman (1)

10.30

 

Shenzen AE Technology Purchase Order (1)

10.31

 

Agreement with Carter, Terry & Company (1)

10.32

 

Convertible Promissory Note dated November 16, 2017 with Power Up Lending Group, Ltd. (13)

10.33

 

Convertible Promissory Note dated January 5, 2018 with Power Up Lending Group, Ltd. (13)

10.34

 

Form of Adar Securities purchase Agreement dated March 5, 2018 with Adar bays , LLC (14)

10.35

 

Form of Convertible Promissory Note dated March 5, 2018 with Adar bays, LLC (14)

10.36

 

Form of Back end Note 1 dated March 5, 2018 with Adar bays, LLC (14)

10.37

 

Form of Back end Note 2 dated March 5, 2018 with Adar bays, LLC (14)

10.38

 

Form of Collateralized Secured Promissory Note 1 dated March 5, 2018 with Adar bays, LLC (14)

10.39

 

Form of Collateralized Secured Promissory Note 2 dated March 5, 2018 with Adar bays, LLC (14)

10.40

 

Securities Purchase Agreement dated March 5, 2018 with Power Up Lending Group, Ltd. (15)

10.41

 

Convertible Promissory Note dated October 20, 2017 with Power Up Lending Group, Ltd. (15)

 

 
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31.1 *

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1 *

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 

 

 

101.INS

 

XBRL Instance Document**

101.SCH

 

XBRL Taxonomy Extension - Schema Document**

101.CAL

 

XBRL Taxonomy Extension - Calculation Linkbase Document**

101.DEF

 

XBRL Taxonomy Extension - Definition Linkbase Document**

101.LAB

 

XBRL Taxonomy Extension - Label Linkbase Document**

101.PRE

 

XBRL Taxonomy Extension - Presentation Linkbase Document**

----------- 

* Filed herewith

** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

(1)

Incorporated by reference to Form S-1 filed on February 22, 2016.

(2)

Incorporated by reference to Form 8-K filed on January 4, 2016.

(3)

Incorporated by reference to Form S-1/A filed on March 7, 2016

(4)

Incorporated by reference to Form 8-K filed on May 18, 2016.

(5)

Incorporated by reference to Form 10-K filed on June 27, 2016.

(6)

Incorporated by reference to Form 8-K filed on August 24, 2016.

(7)

Incorporated by reference to Form S-1 filed on October 11, 2016.

(8)

Incorporated by reference to Form 8-K filed on March 31, 2017.

(9)

Incorporated by reference to Form 10-K filed on July 27, 2017.

(10)

Incorporated by reference to Form 8-K filed on August 10, 2017.

(11)

Incorporated by reference to Form 8-K filed on October 25, 2017.

(12)

Incorporated by reference to Form 10-Q filed on December 14, 2017.

(13)

Incorporated by reference to Form 10-Q filed on February 28, 2018.

(14)

Incorporated by reference to Form 8-K filed on March 5, 2018.

(15)

Incorporated by reference to Form 8-K filed on March 8, 2018.

 

 

52

 

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