Table of Contents
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This registration statement on Form 10 contains “forward-looking statements.” These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. We use the words “anticipate”, “believe”, “could”, “design,” “estimate”, “expect”, “intend”, “forecast,” “goal,” “may”, “plan”, “potential”, “predict”, “project”, “should”, “target,” “will,” “would” or the negatives or other tense of such terms and other similar expressions intended to identify forward-looking statements. Forward-looking statements relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include those listed under
Item 1A. Risk Factors
and elsewhere in this registration statement. These forward-looking statements include, among other things, statements relating to:
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our anticipated growth strategies and our ability to manage the expansion of our business operations effectively;
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our ability to keep up with rapidly changing technologies and evolving industry standards;
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our ability to source our needs for skilled employees;
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the loss of key members of our senior management; and
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uncertainties with respect to the legal and regulatory environment surrounding our technologies.
If any of these risks and uncertainties materialize, or if the assumptions underlying any of our forward-looking statements prove incorrect, then our actual results, level of activity, performance or achievements may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if additional information becomes available in the future. Any forward-looking statement speaks only as of the date on which it is made.
Unless otherwise specified, the terms “we,” “us,” “our,” “Company,” “BYOC” and “Beyond Commerce” refer to Beyond Commerce, Inc. and its consolidated subsidiaries.
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Item 1.
Business
About Beyond Commerce
We plan to operate within two markets: (1) the Business-to-Business Internet Marketing Technology and Services market and (2) the Information Management market. Our goal is to develop proprietary software for digital transformation of clients’ existing content. We believe our planned platform, strategy, and suite of software products and services will provide secure and scalable information control solutions for global companies. We believe our planned software will assist organizations in finding, utilizing, and sharing business information between devices in ways that are intuitive, efficient and productive. We believe that our business model will ensure that information will remain secure and private, as necessitated by the current market climate.
In addition, BYOC plans to provide solutions which facilitate the exchange of information and data transactions between supply chain participants, such as manufacturers, retailers, distributors and financial institutions. The goal is to automate potential client internal processes thereby increasing productivity and lowering costs. BYOC plans to develop proprietary algorithms which it will embed in the planned software to enable clients to access data and gain insight into their business, through that data, leading to improved internal decision making.
BYOC plans to offer the proposed software through traditional on-premise solutions, Software as a Service (“SaaS”), as a cloud based solution, or a combination of on-premise, SaaS or cloud based solutions. We will work with our clients and their needs as to which delivery method they prefer. We believe giving clients a choice and flexibility will help us to obtain long-term client value.
Corporate History and Background
Beyond Commerce was incorporated under the laws of the State of Nevada on, January 12, 2006 under the name “Reel Estate Services, Inc.” for the purposes of operating as a media hub for high traffic web properties, utilizing social networking and e-commerce.
On December 28, 2007, the Company entered into an agreement and plan of reorganization with its former shareholder and former sole officer and director, BOOMj.com, Inc. (“BOOMj”), and Time Lending Sub, Inc., a subsidiary of the Company (“Sub”) pursuant to which Sub merged with and into BOOMj. As a result of the merger, the business of BOOMj became the business of the Company. BOOMj operated as a multi-faceted niche portal and social networking site targeting baby boomers and the Generation Jones demographics. Subsequently on January 14, 2008, the Company changed its name to “BOOMj, Inc.”
BOOMj’s operations migrated into an e-commerce platform known as i-SUPPLY, an online storefront that offered easy to use, fully customizable e-commerce services, and revenue solutions for any third-party website large or small, and hosted local ads, providing extensive reach for our proprietary advertising partner network platform. On February 23, 2009, the Company changed its name to “Beyond Commerce, Inc.” and its ticker symbol to “BYOC” in order to better reflect its business strategy.
During the third quarter of 2009 the Company formed another subsidiary, KaChing KaChing, Inc., a Nevada corporation (“KaChing”). KaChing operated an e-commerce platform which provided a complete turn-key e-commerce solution to third-party store owners. KaChing allowed individual online store owners the ability to create, manage and earn money from product sales generated from their individual webstores. On April 22, 2010, KaChing merged out of the Company and into Duke Mining Company, Inc. to become a new public company.
As a result of the merger transaction, KaChing ceased to be a wholly-owned subsidiary, and BYOC’s interest in the outstanding capital stock of KaChing was reduced to 20.8%. On April 17, 2013 Beyond Commerce’s ownership in KaChing was transferred back to Benjamin Mayer of the firm Mayer & Associates. During 2015, the Company wrote off its entire ownership stake in KaChing and used it as a tax loss carry-forward.
On October 9, 2009, LocalAdLink Inc., a wholly-owned subsidiary of the Company (“LocalAdLink”) sold its LocalAdLink Software (the “Software”) and all of their related assets, including the rights to the name LocalAdLink, the LocalAdLink trademark, the website domain “www.LocalAdLink.com” and a local search directory and advertising network that brings local advertising to geo-targeted consumers. The Company continued to sell advertising services as it had prior to the inception of LocalAdLink, Inc., on a different scale and with a greater emphasis on business-to-
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business sales. As of December 31, 2017, the Company decided to close and remove this subsidiary from its financials going forward.
During the second quarter 2010, the Company entered into a share exchange agreement with all of the shareholders of Adjuice, Inc. (“Adjuice”), an online media and marketing company. Pursuant to the agreement, the Company issued 5,100,000 shares of its common stock in exchange for all of the issued and outstanding stock of Adjuice. The purchase of this transaction was to enhance the Company’s presence in the Ad Networking business. The Adjuice network distributed leads to over 350 retail clients along seven major sales verticals, all offering top payouts. Adjuice owned and managed over 120 sites, all optimized for brand recognition and conversion performance. Adjuice had a solid infrastructure for selling its own products, targeting advertisers, publishers and their related downstream partners with Adjuice’s tailored lead generation programs. As of December 31, 2017, the Company decided to close and remove this subsidiary from its financials going forward.
On March 31, 2011, the Company acquired AIM Connection, Inc., a leading direct sales affiliate, SEO provider, social network and website generator. AIM Connection combines Internet marketing techniques and automation software, and allows all aspects of the marketing process to be controlled and managed by the client. As of December 31, 2017, the Company decided to close and remove this subsidiary from its financials going forward.
On July 28, 2011, a judgement with civil case number: 2:08-cv-00496-KJD-LRL was entered in favor of George Pursglove, the Company’s current CEO, from his counter suit against BOOMj.com, a wholly-owned subsidiary of Beyond Commerce, Inc. The judgement was in the amount of $20,775 for damages as to the claim for failure to pay wages, $3,000,000 for damages as to the conversion claim and $3,000,000 for punitive damages for a total of $6,020,775 (the “July Judgment”). The July Judgment accrues interest at a rate of 5.286% per annum. As of March 31, 2018, the total amount of principal and interest was $7,812,426.
In 2017, the Company reevaluated the commercial viability of its previous operations of all of the aforementioned subsidiaries and determined that many of these businesses were no longer viable. The Company discontinued the operations of the aforementioned subsidiaries as of December 31, 2017.
On April 27, 2017, the Company held a Special Meeting of Stockholders where the stockholders approved and ratified, among other things: (i) the reinstatement of Beyond Commerce with the Secretary of State of the State of Nevada and the appointment of Mr. Pursglove as sole director; and (ii) the exchange of a portion of the July Judgment against Beyond Commerce into shares of common stock of the Company
On May 1, 2017, the Company issued Mr. Pursglove 1,556,632 shares of common stock, par value $0.001 per share, reducing the July Judgment by $12,453. On the same date, the Company authorized the designation of its “blank check” preferred stock, par value $0.001 per share, as Series A Convertible Preferred Stock (the “Series A Preferred Stock”).
Effective July 27, 2017, the Company filed a certificate of designation with the Secretary of State of the State of Nevada, pursuant to which it designated the Series A Preferred Stock. Each share of Series A Preferred Stock is convertible into one share of common stock. In addition, each share of Series A Preferred Stock entitles its holder to (i) cumulative, non-participating dividends in preference and priority to any declaration or payment of a dividend on any of the Company’s common stock, at a rate of 12% per annum, and (ii) three times (3x) voting preference over common stock. On the same date, the Company issued 250,000,000 shares of its Series A Preferred Stock to Mr. Pursglove, further reducing the award under the July Judgment owed to Mr. Pursglove by $250,000.
Business Overview and Strategy
We plan to focus on the acquisition of "big data" companies in the Business-to-Business (“B2B”) Internet Marketing Technology and Services (“IMT&S”) market and the Information Management (“IM”) market.
Market Dynamics IMT&S Segment
Market Opportunity
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the B2B IMT&S industry is a highly fragmented $345.5 billion global market, with $195 billion derived from the United States,
according to the December 2017 Magna Advertising Forecasts Winter Update.
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INTEGRATED SEARCH
: Data from IBISWorld Search Engines – US Market Research Report, November 2017, indicates that the revenue for this sector was approximately $60 billion last year following five years of 8.8% average growth.
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MARKET RESEARCH
: this global industry segment generated $44.5 billion in revenues last year, as reported from data derived from Statista Business Services – Market Research Industry -- Statistics.
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BUSINESS BIG DATA ANALYTICS
: Industry wide revenues were $122 billion in 2015 with projected revenues reaching $187 Billion by 2019 according to InformationWeek’s
Big Data.
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INTERNET PUBLISHING AND BROADCASTING
: $119 billion in revenues were generated last year following annual growth of 14.8% over the previous five years, as shown by data provided by IBISWorld Search Engines – US Market Research Report, November 2017.
Our business objective is to develop, acquire, and deploy disruptive strategic software technology and market-changing business models through selling our own products and the acquisitions of existing companies. We plan to offer a cohesive global digital product and services platform to provide our clients with a single point of contact for all their IMT&S and IM initiatives. Our proposed all-inclusive platform will result in substantial organic growth potential generated through cross-selling and upselling opportunities and future expansion possibilities for BYOC.
To further our business objectives, on December 14, 2017, we entered into an agreement with Service 800 Inc., a Minnesota corporation (“Service 800”) and the sole shareholder of Service 800 (the “Shareholder”), pursuant to which we have agreed to acquire all of the issued and outstanding shares of common stock of Service 800 from the Shareholder (the “Transaction”). Service 800 operates as a premium provider of Customer Feedback Management Platforms to their Fortune 500 and 1000 clients on a global basis. Service 800 provides survey authoring, response rates, feedback types and data analysis on their proprietary, cloud based, automated and centralized platform. Service 800 has currently 40 full time employees that provide services to 130 companies and 300 service organizations. Service 800’s current operations and strategic business plan is to further develop its marketing and Customer Experience platform to use within the framework of its current Fortune 500 and 1000 clients.
No assurance can be given that we will be successful in completing this Transaction or that we will be successful in realizing the anticipated strategic benefits of the Transaction.
Products and Services Overview
Our goal is to help companies and organizations derive value from their information. To do this, we intend to offer services and solutions such as Content Services, Business Process Management, Customer Experience Management, Discovery, Business Network, and Analytics.
With our planned products and services, we plan to deliver our customers the following::
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(i)
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Increased compliance and information governance resulting in reduced exposure to risk of regulatory sanctions related to how information is handled and protected;
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(ii)
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Improved operating efficiency through process digitization and automation;
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(iii)
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Better customer engagement through improved and integrated digital experiences and content delivery;
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(iv)
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Lower cost of electronic storage and management of information through improved classification and archiving strategies;
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Reduced infrastructure costs due to, among other factors, legacy decommissioning capabilities of BYOC and cloud and hosted services deployment models;
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(vi)
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Improved innovation, productivity and time-to-market as a result of letting employees, trading partners and customers work with information and collaborate in ways which are intuitive, automated, and flexible; and
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(vii)
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Increased revenue streams with the enablement of easy expansion across new channels and, ultimately, new markets.
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Content Services
We plan to facilitate content services with an integrated set of technologies to allow customers to manage information throughout the content services lifecycle and improve business productivity, all while mitigating the risk and controlling the costs of growing volumes of data. We intend to make our content services solutions available via on-premise, SaaS and increasingly cloud-based solutions, which will include next-generation SaaS platform for content services. The proposed SaaS platform will be comprised of a set of consumer-grade, end-user productivity applications that enable users to access, share, create and collaborate on content, across any device.
Business Process Management (BPM)
We believe our planned BPM solution will provide software capabilities for analyzing, automating, monitoring and optimizing structured business processes that typically fall outside the scope of existing enterprise systems. We believe our envisioned BPM solutions will help empower employees, customers and partners.
Our proposed BPM solutions will include 260 Process Suit and 260 Process Solutions.
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260 Process Suite
will put businesses in direct control of its processes and fosters alignment between business and Information Technology (IT), resulting in tangible benefits for both. Our Process Suite will offer a single platform that can be accessed simply through a web browser and is built from the ground up to be truly multi-tenant and support all of the deployment models required for on-premise, private or public clouds.
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260 Process Suite Solutions
will be packaged applications built on the Process Suite and address specific business problems. For some of these solutions, we plan to include Contract Management, Cloud Brokerage Services, Digital Media Supply Chain, and Enterprise App Store, to name a few.
Customer Feedback Management (CFM)
We believe our planned CFM solutions will generate improved time-to-market by giving customers, employees, and channel partners personalized and engaging experiences.
We intend our proposed CFM solutions to will include:
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Web Content Management
will provide software for authoring, maintaining, and administering websites designed to offer a “visitor experience” that integrates content from internal and external sources.
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Digital Asset Management
will provide a set of content management services for browsing, searching, viewing, assembling, and delivering rich media content such as images, audio and video.
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Customer Communications Management Software
will make it possible for organizations to process and deliver highly personalized documents in paper or electronic format rather than a “one message fits all” approach.
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Social Software
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help companies “socialize” their web presence by adding blogs, wikis, ratings and reviews, and build communities for public websites and employee intranets.
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Portal
which will enable organizations to aggregate, integrate and personalize corporate information and applications and provide a central, contextualized, and personalized view of information for executives, departments, partners, and customers.
Customer Experience CX
We believe our planned CX solutions will help customers organize and visualize all relevant content to enable business users to quickly locate information in order to make better-informed decisions based on timely, contextualized information.
Our proposed CX solutions shall include:
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Search
addresses information security and productivity requirements by securely indexing all information for fast retrieval and real-time monitoring.
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Smart Navigation
improves the end-user experience of websites by enabling intuitive visual exploration of site content through contextual navigation.
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Auto-Classification
improves the quality of information governance through intelligent metadata extraction and accurate classification of information.
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CX Silos
makes it possible for organizations to deal with the issue of so-called “information silos” resulting from, for instance, numerous disconnected information sources across the enterprise. Using a framework of adapters, an information access platform allows organizations to consolidate, decommission, archive and migrate content from virtually any system or information repository.
Business Network (BN)
Our proposed BN solution will be a set of offerings that facilitate efficient, secure, and compliant exchange of information inside and outside the enterprise.
Our proposed BN solutions will include:
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Business-to-Business (B2B) Integration
services that help optimize the reliability, reach, and cost efficiency of an enterprise's electronic supply chain while reducing costs, infrastructure and overhead.
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Secure Messaging
helps to share and synchronize files across an organization, across teams and with business partners, while leveraging the latest smartphones and tablets to provide information on the go without sacrificing information governance or security.
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BYOC Analytics
We believe our proposed BYOC Analytics solutions in which we plan to develop will help organizations gain insight from their structured and unstructured data, make predictions, visualize and report on business processes, customer interactions and a myriad of other sources of information. This analytical data can then be used to refine business processes or content utilization, make predictions, identify trends, improve customer service or be applied in a multitude of different scenarios.
Our planned BYOC Analytics solutions include:
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Embedded Reporting and Visualization
which will be used to embed reports and visualizations of data in an array of applications, including the BYOC EIM Suites and many third-party data sources.
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Big Data Analysis
is the analysis of large sets of information from databases, files, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems and a variety of other sources. Our planned modeling and predictive algorithms may be applied to this data using BYOC solutions to extract meaningful insight or predictive models to solve customer problems or help with operational insight.
Our Business Strategy
Growth
We plan to grow our business and strengthen our future service offerings in the IMT&S market through product development, strategic acquisitions and integration and organic growth. We are a value-oriented and disciplined acquirer. Currently we are in the process of identifying potential acquisitions of companies in the IMT&S markets. As of the date of this registration statement, we have executed two non-binding letters of intent for the potential acquisition of two companies (“LOIs”), and are currently in the due diligence process. While acquiring companies that operate complementary businesses will be one of our leading growth drivers, our growth strategy also includes organic growth through product and software innovation. We plan to create sustained value by expanding distribution and adding value through up-selling and cross-selling across our planned multiple proprietary marketing platforms to our future customers. We believe our ability to leverage our global presence will be helpful to our ability to grow organically.
We plan on acquiring operating companies that will help us provide a well-rounded product line to our future customers. We believe that such acquisitions will be our primary driver to growth, similar to high-performing conglomerates. By focusing on these acquisitions and the integration of niche businesses, we believe this will well position us to incorporating them into our existing platforms and technology services, ultimately allowing us to offer future customers a full suite of software solutions and services.
We have developed a philosophy, which we refer to as “The Beyond Commerce Business System”, that is designed to create value by leveraging a clear set of operational mandates for integrating newly acquired companies and assets. We see our ability to successfully integrate acquired companies and assets into our business as a strength and pursuing strategic acquisitions is an important aspect to our growth strategy. However, no assurance can be given that we will be successful in consummating such acquisitions or that we will be successful in realizing anticipated strategic benefits of such acquisitions.
Funding Agreements
On February 13, 2018, we entered into a financial advisory agreement with Maxim Group, LLC a leading full-service investment banking, securities and wealth management firm (“Maxim”), pursuant to which Maxim will provide certain advisory services, including strategic corporate planning, financial advisory and investment banking services. On May 31, 2018, we entered into a separate financial advisory agreement with Maxim, which effectively expanded the arrangement to include Maxim’s provision of mergers and acquisitions services, to include the sourcing of and negotiation with potential targets. Pursuant to the agreement, Maxim will assist in BYOC’s global expansion plan, and accelerate product growth and innovation. Additionally, Maxim, will among other things, assist the Company in its efforts to become a fully reporting company under Securities and Exchange Commission guidelines and also advise the Company with respect to its efforts to list on a national securities exchange.
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On March 27, 2018, we secured a seventeen (17) month non-dilutive bridge loan in the principal amount of $1 million through Chicago Venture Partners. Within the bridge loan certain milestones must be met, including the Company’s successful registration with the SEC via a Form 10 with audited financials. Currently the Company has no additional commitment for either a debt or equity funding from any source.
Potential Product Revenues
Our forecasted business will consist of four revenue streams: (1) software license; (2) cloud services and subscriptions; (3) customer support; and (4) professional services.
License
Our forecasted license revenues will consist of fees earned from the licensing of software products to our future customers. We believe that license revenues will be impacted by the strength of general economic and industry conditions, the competitive strength of our future software offerings, and our potential acquisitions. A potential customer’s decision to license our software products often involves a comprehensive implementation process across the customer’s network or networks and the licensing and implementation of our planned software products may entail a significant commitment of resources by prospective customers.
Cloud Services and Subscriptions
Our forecasted cloud based services and subscription revenues will consist of (i) software as a service offerings, (ii) managed service arrangements and (iii) subscription revenues relating to on-premise offerings. We believe these offerings will allow our potential customers to transmit a variety of content between various mediums and to securely manage enterprise information without the commitment of investing in related hardware infrastructure.
In addition, we plan to offer B2B integration solutions, such as messaging services, and managed services. Messaging services will (i) allow for the automated and reliable exchange of electronic transaction information, such as purchase orders, invoices, shipment notices and other business documents, among businesses worldwide, and (ii) provide an end-to-end fully outsourced B2B integration solution to our customers, including program implementation, operational management, and customer support. We believe these planned services will enable customers to effectively manage the flow of electronic transaction information with their trading partners and reduce the complexity of disparate standards and communication protocols.
Customer Support
We plan on integrating our proposed customer support offering to customers together with the purchase of a license of our future enterprise information management software products. This customer support will typically renew on an annual basis; customer support revenues will be a sizeable portion of total revenue, as they are with our many of our competitors. Through our planned customer support programs, customers will receive access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble issues. Additionally, our planned customer support teams will handle questions on the use, configuration, and functionality of our products and can help identify software issues, develop solutions, and document enhancement requests for consideration in future product releases.
Professional Service and Other
We plan to provide consulting and learning services to customers and generally these services will relate to the implementation, training and integration of our licensed product offerings into the customer's systems.
We believe our planned consulting services will help customers build solutions that will enable them to leverage their investments in our technology and in existing enterprise systems. Implementation of these services will range from simple modifications to meet specific departmental needs to enterprise applications that will integrate with multiple existing systems.
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Our learning services advisors will analyze our customers' education and training needs, focusing on key learning outcomes and timelines, with a view to creating an appropriate education plan for the employees of our customers who work with our products. Education plans will be designed to be flexible and can be applied to any phase of implementation: pilot, roll-out, upgrade or refresher. Our learning services will employ a blended approach by combining mentoring, instructor-led courses, webinars, eLearning and potentially, focused workshops.
Planned Acquisitions
We believe our future competitive position in the marketplace will be dependent upon our ability to maintain a complex and evolving array of technologies, products, services and capabilities. Considering the continually evolving marketplace in which we intend to operate, we plan to regularly evaluate acquisition opportunities within the IMT&S market and at any time may be in various stages of discussions with respect to such opportunities.
Pursuing strategic acquisitions is an important aspect to our current and future growth strategy, which we expect to continue, in order to strengthen our service offerings in the IMT&S market. As discussed elsewhere in this registration statement, we entered into an agreement for the acquisition of all of the issued and outstanding shares of Service 800. We plan to complete this acquisition during 2018. We also entered into two non-binding LOIs relating to two proposed acquisitions. However, no assurance can be given that we will be successful in completing such acquisitions, or that we will realize the anticipated strategic benefits following close of the proposed acquisitions.
We believe our planned acquisitions support our long-term strategy for growth. We believe such acquisitions will strengthen our competitive position, help us obtain a customer base and provide greater scale to accelerate innovation, and begin revenues. We plan to continue to identify strategic acquisitions of complementary companies, products, services and technologies which we believe will augment our existing business.
Research and Development
The industry in which we plan to operate and compete is subject to rapid technological developments, evolving industry standards, changes in customer requirements and competitive new products and features. As a result, we believe our success, in part, will depend on our ability to build and enhance our products in a timely and efficient manner and to develop and introduce new products that meet client needs while reducing total cost of ownership. To achieve these objectives, we plan to make and expect to make research and development investments through internal and third-party development activities, third-party licensing agreements and potentially through technology acquisitions.
As of December 31, 2017 and 2016, we have not engaged in research and development activities.
Marketing and Sales
Customers
Currently we do not have any customers; however, if we are successful in closing the business combination with Service 800, we will acquire their existing client base of 130 companies and 300 service organizations.
Market and Competition
The IMT&S industry is highly fragmented and competitive. Key competitive factors include contractual terms and competitive pricing, quality of service, reputation, technical and industry expertise, scope of services, innovative service and product offerings. Key success factors include the ability to access the latest available and most efficient technology and techniques; maintain a highly skilled workforce; maintain effective cost controls, and good project management skills.
The market for our proposed products and related services is highly competitive, subject to rapid technological change and shifting customer needs and economic pressures. In the Customer Feedback Management Platform (CX) market, our competitors may have single (or narrowly-tailored) solutions or they may have a range of information management solutions. Given the markets in which we plan to operate and the products and services we plan to offer, we believe our top competitors to be Clarabridge, Confirmit, InMoment, MartizCX, Medallia, NICE, Qualtrics, Satmetrix Systems, SMG and Verint Systems.
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Many of BYOC’s competitors in the IMT&S industry are small and of those, many are non-employing firms. Companies in the industry offer a broad range of product and services tailored to different markets. This mobility has allowed smaller firms to dominate the industry composition, as they tend to provide services to a specific niche market and/or within a specific geographic region. Despite their prevalence, smaller firms contribute only a small percentage of industry revenue. The bulk of revenue is generated by several high-profile global corporations, such as IBM, Hewlett-Packard, EMC Corporation, SAS, and Accenture. Larger companies maintain an advantage over smaller firms in that they can service national and international clients, with more resources and capabilities, and as such are able to command a higher premium.
We believe that certain competitive factors will affect the market for our future software products and related services, which may include: (i) vendor and product reputation; (ii) product quality, performance and price; (iii) the availability of software products on multiple platforms; (iv) product scalability; (v) product integration with other enterprise applications; (vi) software functionality and features; (vii) software ease of use; (viii) the quality of professional services, customer support services and training; and (ix) the ability to address specific customer business problems. We believe the relative importance of each of these factors depends upon the concerns and needs of each specific customer.
Intellectual Property Rights
Our future success and ability to compete will depend on our ability to develop and maintain our intellectual property and proprietary technology and to operate without infringing on the proprietary rights of others. Software products are generally licensed to customers on a non-exclusive basis for internal use in a customer's organization. We plan to also grant rights in intellectual property that we plan on developing or acquiring to third-parties to allow them to market certain of our future products on a non-exclusive or limited-scope exclusive basis for an application of such product or to a specific geographic region.
We plan to rely on a combination of copyright, patent, trademark and trade secret laws, non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights. The duration of patents is determined by the laws of the country of issuance and for the U.S. is typically 17 years from the date of issuance of the patent or 20 years from the date of filing of the patent application resulting in the patent. While we believe our intellectual property will be an asset, and our ability to maintain and protect our intellectual property rights is important to our success, we do not anticipate that our business will not be materially dependent on any patent, trademark, license, or other intellectual property right.
Employees
We currently only have one full-time employee, Mr. George Pursglove. Mr. Pursglove is our President and Chief Executive Officer. However, if we are successful in completing the acquisition of Service 800, we will acquire their existing employee base of 40 employees and approximately 320 independent contractors.
Item 1A. RISK FACTORS.
An investment in our common stock is highly speculative and involves a high degree of risk. In determining whether to purchase the Company’s common stock, an investor should carefully consider all of the material risks described below, together with the other information contained in this report. An investor should only purchase the Company’s securities if he or she can afford to suffer the loss of his or her entire investment.
General Business and Industry Risks
We have no assets and no current operations and face many of the risks and difficulties frequently encountered by an early stage company.
As of December 31, 2017, the Company chose to close and remove the following subsidiaries from our consolidated financial statements on a go-forward basis: LocalAdLink, Inc., Adjuice, Inc., and Aim Connection, Inc. As a result, we have no assets and no current operations. There can be no assurance that our planned operations will be
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profitable. To begin operations and become profitable, we must raise additional working capital. We have no commitment for funding and there can be no assurance that we will be able to secure additional debt or equity financing and, if obtained, will be available on terms acceptable to us. If we are not successful in securing additional financing when needed, we may be unable to execute our business strategy, which could result in curtailment of our operations.
Although, our Chief Executive Officer has extensive knowledge of the markets in which we plan to operate, assessing the future prospects of our business is challenging in light of both known and unknown risks and difficulties we may encounter. Growth prospects in our industry can be affected by a wide variety of factors including:
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Competition from other similar companies;
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Changes in underlying consumer behavior;
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Our ability to access adequate financing on reasonable terms and our ability to raise additional capital in order to fund our operations;
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Challenges with new products, services and markets; and
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Fluctuations in the credit markets and demand for credit.
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We may not be able to successfully address these factors, which could negatively impact our growth, harm our business and cause our operating results to be worse than expected.
We have no proven ability to generate revenues, and any investment in our company is risky.
We do not have a meaningful operating history, so it will be difficult for you to evaluate an investment in our stock. We cannot assure that we will generate revenues or be profitable. As a result, investors will bear the risk of complete loss of their investment in the event we are not successful.
The accompanying financial statements have been prepared assuming that we will continue as a going concern.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2017, we had an accumulated deficit of $38,466,441. These matters raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should we be unable to continue as a going concern. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of December 31, 2017 with respect to this uncertainty.
Our ability to continue as a going concern is dependent upon our ability to generate profitable business operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities. Management’s plan to continue as a going concern is based on us obtaining additional capital resources through the sale of our securities and/or loans on an as needed basis. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described above and eventually attaining profitable operations.
In addition to the normal risks associated with a new business venture, there can be no assurance that our business plan will be successfully executed. Our ability to execute our business plan will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be available, or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. In this regard, we are restricted by the number of shares available for issuance in an equity financing, and we will likely need to increase out authorized capital in order to take advantage of such financing. However there can be no assurance that we will be successful in obtaining shareholder approval to increase our authorized capital. Further, we cannot give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable. To the extent that we are unsuccessful, we may need to curtail or cease our operations and implement a plan to extend payables or reduce overhead until sufficient additional capital is raised to support further operations. Our ability to continue as a going concern is dependent on management’s plans, which include further implementation of its business plan and continuing to raise funds through debt and/or equity raises
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We must raise additional capital to fund our operations.
We do not currently have sufficient capital to fund our current or anticipated operations. We may be unable to obtain additional capital when required. Future business development activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as legal compliance costs and accounting expenses) will require a substantial amount of additional capital and cash flow.
We may need to acquire additional funds in order to develop our business. We may seek to raise such capital through public or private equity financings, partnerships, collaborations, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, our ability to do so is subject to a number of risks, uncertainties, constraints and consequences, including, but not limited to, the following:
•our ability to raise capital through the issuance of additional shares of our common stock or convertible securities is restricted by the limited number of our residual authorized shares, the potential difficulty of obtaining stockholder approval to increase authorized shares and the restrictive covenants under our secured term loan agreement;
•issuance of equity-based securities will dilute the proportionate ownership of existing stockholders;
•our ability to obtain further funds from any potential loan arrangements is limited by our existing loan and security agreement;
•certain financing arrangements may require us to relinquish rights to various assets and/or impose more restrictive terms than any of our existing or past arrangements; and
•we may be required to meet additional regulatory requirements, and we may be subject to certain contractual limitations, which may increase our costs and harm our ability to obtain funding.
For these and other reasons, additional funding may not be available on favorable terms or at all. If we fail to obtain additional capital when needed, we may be required to delay, scale back or eliminate some or all of our research and development programs, reduce our selling, general and administrative expenses, be unable to attract and retain highly qualified personnel, refrain from making our contractually required payments when due (including debt payments) and/or be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection. Any of these consequences could harm our business, financial condition, operating results and prospects.
Any additional capital raised through the sale of equity may dilute the ownership percentage of our stockholders. Raising any such capital could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool of outstanding equity. The terms of securities we issue in future capital transactions may be more favorable to our new investors, and may include preferences, superior voting rights and the issuance of other derivative securities, and issuances of incentive awards under equity employee incentive plans, which may have a further dilutive effect.
Our ability to obtain financing may be impaired by factors such as the capital markets (both generally and in our industry in particular), our limited operating history, national unemployment rates and the departure of key employees. Further, economic downturns will likely decrease our revenues and may increase our requirements for capital. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, if any, is not sufficient to satisfy our capital needs (even to the extent that we reduce our operations), we may be required to cease our operations, divest our assets at unattractive prices or obtain financing on unattractive terms.
We have a limited operating history, have generated losses since inception, have not generated any revenues from planned operations and may never achieve profitability.
We are an early pre-revenue stage company and have a limited history of operations. We are faced with all of the risks associated with a company in the early stages of development. Our business is subject to numerous risks associated with a new company engaged in the "big data" arena for the B2B IMT&S space. Such risks include, among other things, potential competition from well-established and well-capitalized companies, unanticipated development, and changes in trends, marketing difficulties and risks associated with intellectual property creation, protection and exploitation. There can be no assurance that we will ever generate revenues or achieve profitability.
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We may encounter delays, uncertainties, and complications typically encountered by early stage businesses, many of which will be beyond our control. These risks include the following: lack of sufficient capital, unanticipated problems, delays, and expenses relating to product development and implementation, lack of intellectual property protection, licensing and marketing difficulties, competition, technological changes, and uncertain market acceptance of our future products and services.
Our planned expense levels will be based in part on our expectations concerning future revenue, which is difficult to forecast accurately based on our stage of development. We may be unable to adjust spending in a timely manner to compensate for any unexpected shortfall in revenue. Further, business development and marketing expenses may increase significantly as we expand operations. To the extent that these expenses precede or are not rapidly followed by a corresponding increase in revenue, our business, operating results, and financial condition may be materially and adversely affected.
Our acquisitions are an important aspect of our growth strategy, but they may not achieve expectations, which could affect our cash flow and profitability.
We plan to acquire companies and operations that complement our planned business operations. These transactions involve numerous business risks, including finding suitable transaction partners, the diversion of management’s attention from other business concerns, extending our product or service offerings into areas in which we have limited experience, entering into new geographic markets, the potential loss of key employees or business relationships and the integration of acquired businesses, any of which could adversely impact our business, financial condition or results of operations.
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An acquisition may negatively affect our business, financial condition, operating results or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition;
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We may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us;
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An acquisition, whether or not consummated, may disrupt our ongoing business, divert resources, increase our expenses and distract our management
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An acquisition may result in a delay or reduction of purchases for both us and the company that we acquired due to uncertainty about continuity and effectiveness of solution from either company;
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We may not be able to successfully integrate our business through the acquisition of Service 800, and we may not be able to fully realize the anticipated strategic benefits of the acquisition, which includes a complementary business;
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An acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions;
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Challenges inherent in effectively managing an increased number of employees in diverse locations;
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The potential strain on our financial and managerial controls and reporting systems and procedures;
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Potential known and unknown liabilities associated with an acquired company;
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Our use of cash to pay for acquisitions could limit other potential uses for our cash;
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The risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; and
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To the extent that we issue a significant amount of equity or convertible debt securities relating to future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
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We may not succeed in addressing these or other risks or any other problems encountered relating to the integration of any acquired business, the inability to integrate successfully the business, technologies, products, personnel or operations of any acquired business, or any significant delay in achieving integration, could have a material adverse effect on our business, financial condition and operating results.
We may be adversely affected by risks associated with potential acquisitions, such as Service 800, including execution risks, failure to realize anticipated strategic benefits, and failure to overcome integration risks, which could adversely affect our growth and profitability.
We plan to grow our business both organically and inorganically, including through the acquisition of Service 800. While we plan to complete the acquisition, there can be no assurance that we will be successful in closing the acquisition. In the event that we do pursue further acquisitions, we may have difficulty executing on such acquisitions and may not realize the anticipated benefits of any transaction we complete. Any of the foregoing matters could materially and adversely affect us.
The integration of Service 800 will likely be a time-consuming process. The integration process will likely require substantial management time and attention, which may divert attention and resources from other important areas, including developing our planned services and products existing business. In addition, we may not be able to fully realize the anticipated strategic benefits of the acquisition, which includes a complementary business. The failure to successfully integrate the combined operations, including retention of key employees, could impact our ability to realize the full benefits of our acquisition of Service 800. If we are not able to achieve the anticipated strategic benefits of the acquisition, it could adversely affect our business, financial condition and results of operations, and could adversely affect the market price of our common stock if the integration or the anticipated financial and strategic benefits of the acquisition are not realized as rapidly as, or to the extent anticipated by us. Failure to achieve the anticipated benefits could result in increased costs and decreases in future revenue and/or net income following the acquisition.
Inadequate protection of our intellectual property could impair our competitive advantage.
Our success and ability to compete depend in part upon our development of proprietary technology and intellectual properties. We will eventually rely primarily on a combination of copyright, trademark, patent, trade secret laws, nondisclosure agreements, and technical measures to protect our future proprietary technology and intellectual properties. We will also limit access to, and distribution of, our proprietary technology and trade secrets through security technologies.
There can be no assurance that our efforts to protect our intellectual property rights will adequately deter misappropriation or independent third-party development of our intellectual property or prevent an unauthorized third party from obtaining or using information that we regard as proprietary.
There can be no assurance that our competitors will not independently develop proprietary technologies similar to ours. Litigation may be necessary in the future to protect our trade secrets or other intellectual property rights or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our business, financial condition, and results of operations.
Third parties could claim that we are infringing their patents or other intellectual property rights; we must protect our intellectual property; and others could infringe on or misappropriate our rights.
Open source software includes a broad range of software applications and operating environments produced by companies, development organizations and individual software developers and is typically licensed for use, distribution and modification at a nominal cost or often, free of charge. To the extent that the open source software models expand,
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and non-commercial companies and software developers create and contribute competitive analytical software to the open source community, we may be forced to adjust our pricing, maintenance and distribution strategies and models, which could have a material adverse effect on our financial position and results of operation. In addition, if one of our developers embedded open source software into one or more of our products without our knowledge or authorization or a third party has incorporated open source software into such third-party’s software without disclosing the presence of such open source software and we embedded such third-party software into one or more of our products, we could, under certain circumstances, be required to disclose the source code to such products. Third-parties could claim that we are infringing on their patents or other intellectual property rights.
Our planned technology and products may not achieve commercial success or widespread market acceptance.
The technology and products that we plan to develop, may not achieve customer or widespread market acceptance. Some or all of our planned technology and products may not achieve commercial success as a result of technology problems, competitive cost issues, yield problems, and other factors. Even if we successfully introduce a new product, customers may determine not to adopt or may terminate use of our products for a variety of reasons, including the following:
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superior technologies developed by competitors;
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price considerations;
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lack of anticipated or actual market demand for the products; or
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unfavorable comparisons with products introduced by others.
We may be unable to recover any expenditure we make relating to one or more modern technologies that ultimately prove to be unsuccessful for any reason. In addition, any investments or acquisitions made to enhance technologies may also prove to be unsuccessful.
We may not be able to commercialize our planned technology products or services.
A key element of our business strategy involves the development and commercialization of new software technologies and products. The success of this effort depends on numerous factors. We may not be able to expand our business as anticipated and may make substantial investments in product development, and marketing efforts that may not result in any sales. The design and manufacture of products utilizing innovative technology involves a highly complex process that is sensitive to a wide variety of factors. As a result of these factors, we may experience no revenues and no adoption of our planned products or services.
We might not be able to implement our business strategy.
To some extent, our ability to generate cash flow in the future is subject to general economic, financial, competitive, and other factors that are beyond our control. In the event our management has misjudged the market demand, market acceptance of our services, or financial projections and assumptions, results of operations could be adversely affected, and we might not be able to fund our development as planned. If we are unable to finance existing or future projects with cash flow from operations, we will have to adopt one or more alternatives, such as delaying launch, postponing advertising and marketing, canceling development projects and other capital expenditures, or obtaining additional equity/debt financing, or joint venture partners. These sources of additional funds might not be sufficient to finance future projects, and other financing may not be available on acceptable terms, in a timely manner or at all. If we are unable to secure additional financing, we could be forced to limit our business plan, or we may not be able to take advantage of unanticipated opportunities or otherwise respond to unanticipated competitive pressures, which might adversely affect our business, financial condition and results of operations.
We may experience delays in introducing our planned products or services which may adversely affect our revenue.
The timing of a creative process is difficult to predict. In developing our products, we anticipate dates for the launch of the products and associated product introductions. When we state that we will introduce or anticipate introducing a product at a certain time in the future, those expectations are based on completing the associated development or acquisition and implementation work in accordance with our currently anticipated schedules. Unforeseen delays and difficulties in the development process or significant increases in the planned costs of development, or factors outside
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our control may cause the introduction date for the product to be later than anticipated or, in some situations, may cause a product introduction to be discontinued. Any delay or cancellation of planned product development and introduction may decrease the number of products and features we sell and harm our business.
We may become dependent upon third-parties for certain future software and marketing applications development.
We may license certain software upgrades from third-party software developers. Licensed software could be embedded in our future product offerings, and some could be offered as add-on products. If these licenses are discontinued, or become invalid or unenforceable, there can be no assurance that we will be able to develop substitutes for the licensed software independently or that we will be able to obtain alternatives in a timely manner. Any delays in obtaining or developing substitutes for future licensed software applications could result in material adverse impacts to our financial condition and plan of operations.
Software piracy is a persistent problem in the IMT&S industry.
Preventing unauthorized use of computer software is difficult, and software piracy is a persistent problem for the software industry. In addition, the laws of various countries in which we may plan to market and sell our software and marketing applications do not protect our software and intellectual property rights to the same extent as the laws of the US. Despite the precautions that we are planning to take to safeguard our software and marketing application, it may be possible for unauthorized third-parties to reverse engineer or copy our planned products or obtain and use information that we regard as proprietary. There can be no assurance that the steps that we plan to take to protect our proprietary rights will be adequate to prevent misappropriation of our technology. If we fail to protect our Company from misappropriation of our technology, our operations could be materially affected.
Our operating results, once established, may have significant periodic and seasonal fluctuations.
Customer commitments in the IMT&S industry are frequently short-term. In addition to the variable nature of these commitments, other factors may contribute to significant periodic and seasonal fluctuations in results of operations. These factors may include the following:
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the timing of orders;
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the volume of orders relative to capacity to provide technical support or customer service;
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product introductions and market acceptance of new products or new generations of products;
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evolution in the life cycles of customers’ products;
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timing of expenditures in anticipation of future orders;
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effectiveness in managing software development processes;
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changes in cost and availability of labor and components;
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introduction and market acceptance of customers’ products;
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product mix;
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pricing and availability of competitive products; or
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anticipated or unanticipated changes in economic conditions.
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Volatility of consumer preferences makes introducing successful products and services difficult and unpredictable.
Our success will depend on generating revenue from market acceptance of the products we release, but market acceptance cannot be predicted or relied upon. Our business plan involves the development of IMT&S products and the future enhancement of those products. The success of future enhancements cannot be assured regardless of the success of any initial products. If our products fail to gain market acceptance, we may not have sufficient revenues to pay our expenses and continue the ongoing development and acquisition of new products. The failure to successfully anticipate, identify and react to consumer preferences would have an adverse effect on revenues, profitability and the results of operations.
Potential profit margins may decline as a result of increasing pressure on margins.
Our industry is subject to potentially significant pricing pressure caused by many factors. If our estimated gross margin declines and we fail to sufficiently reduce our operating cost or grow our future net revenues, we could incur significant operating losses that we may be unable to fund or sustain for extended periods of time, if at all. This could have a material adverse effect on our results of operations, liquidity and financial condition.
We are dependent on the timely receipt of payment from our clients.
We plan to extend payment terms to our clients. The extension of payment terms and the collection of potential receivables could extend well beyond normal terms outside of our control. Our ability to collect on outstanding receivables, our ability to borrow if needed under any credit facility and our overall financial condition could be negatively affected. Our financial condition and results of operations would be adversely impacted.
Our industry is highly competitive.
The market for marketing statistical software, data mining tools, predictive analytic solutions, both in the US and internationally, is highly fragmented and competitive. However, as our sales channel becomes more visible to potential competitors, some of which have well-recognized brand names and substantial financial, technological, distribution, marketing experience and research and development capabilities, the potential competitors may develop products that compete directly with our products. Competitive pressures from the introduction of novel solutions and products by these companies or other companies could have a material adverse effect on our future business results. There can be no assurance that we will be able to compete successfully or that the competition will not have a material adverse effect on our future business results.
We may experience sporadic sales cycles.
Our sales strategy is focused on our targeted market of Fortune 500 and 1000 businesses with a need for our software, marketing and related services. These “strategic accounts” could produce sales cycles of nine months or more in duration before any revenues are generated by us. These long sales cycles could have an adverse effect on our cash flow and in turn would have a materially adverse effect on our financial condition and results of operations.
We may be subject to risks associated with information disseminated through the Internet.
The safe and secure transmission of confidential information over the Internet has been a significant hurdle to electronic file transfer and communications over the Internet. Any compromise or actual breach of our planned internal security processes, databases and or hardware could deter our targeted clients from using our software and marketing applications and in turn create a materially adverse effect on our financial condition and results of operations.
Possible future transactions with our executive management or their affiliates may create conflicts.
Under prescribed circumstances, our bylaws permit us, under restricted circumstances, to enter into transactions with our affiliates, including the borrowing and lending of funds and joint investments. Currently, our policy is not to enter into any transaction involving joint investments with our Management or their affiliates, or to borrow from or lend money to such persons. However, our policies in each of these regards may change in the future.
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Our rights and the rights of our shareholders to recover claims against our officers and directors are limited.
Nevada law provides that a director has no liability in that capacity if he performs his duties in good faith in a manner he reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our Articles of Incorporation authorize us, and our bylaws require us, to indemnify our directors, officers, employees and agents to the maximum extent permitted under Nevada law.
Additionally, our Articles of Incorporation limit the liability of our directors and officers to us and our shareholders for monetary damages to the maximum extent permitted under Nevada law. As a result, our shareholders and we may have more limited rights against our directors, officers, employees and agents, than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our directors, officers, employees and our agents in some cases.
Risks Related to Our Common Stock
Our stock is considered a “penny stock,” and is therefore considered risky.
OTC Pink Sheet stocks, and especially those being offered for less than $5.00 per share, are often known as “penny stocks” and are subject to regulations which mandate the dispersion of certain disclosures to potential investors prior to any investors’ purchase of any penny stocks. Penny stocks are low-priced securities with low trading volume. Consequently, the price of the stock is often volatile and investors may be unable to buy or sell the stock when you desire. The SEC extensively monitors “penny stocks,” and such regulations are enumerated in Exchange Act Section 15(h) and Exchange Act Rules 3a51-1 and 15g-1 through 15g-100. With certain exceptions, brokers selling our stock must adhere to the SEC’s “penny stock” regulations, which requirements include, but are not limited to, the following:
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Brokers must provide you with a risk disclosure document relating to the penny stock market.
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Brokers must disclose price quotations and other information relating to the penny stock market.
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Brokers must disclose any compensation they receive from the sale of our stock.
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Brokers must provide a disclosure of any compensation paid to any associated persons in connection with transactions relating to our stock.
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Brokers must provide you with quarterly account statements.
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Brokers may not sell any of our stock that is held in escrow or trust accounts.
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Prior to selling our stock, brokers must approve your account for buying and selling penny stocks.
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Brokers must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.
These additional sales practices and the disclosure requirements could impede the sale of our securities. In addition, the liquidity for our securities may be adversely affected, with related adverse effects on the price of our securities.
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend their customers buy our common stock, which may have the effect of reducing the trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock, thereby potentially reducing the liquidity of our common stock.
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We have no plans to pay dividends on our Common Stock
We have not previously paid any cash dividends, nor have we determined to pay dividends on any share of preferred stock or shares of Common Stock, except as described in the rights and preferences detailed in the “Certificate of Designation of Preferences” for the Series A Preferred Stock filed with the Secretary of State of the State of Nevada. There can be no assurance that our operations will result in sufficient revenues to enable us to operate at profitable levels or to generate positive cash flows. Furthermore, there is no assurance that the Board of Directors will declare dividends even if profitable. Dividend policy is subject to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors.
If we issue additional shares in the future, it will result in the dilution of our existing stockholders.
We are authorized to issue up to 1,050,000,000 shares of common stock with a par value of $0.001, of which 1,004,200,000 are currently issued and outstanding. Our board of directors, upon the approval of the stockholders, may seek to increase the number of authorized shares in the future and may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our company.
Voting power is highly concentrated in holders of our Series A Preferred Stock.
We are authorized to issue up to 250,000,000 shares of preferred stock, all of which are designated Series A Preferred Stock and all of which are currently issued and outstanding. Holders of our Series A Preferred Stock are entitled to three times (3x) voting preference over holders of common stock. Such concentrated control of the Company may adversely affect the price of our common stock. A stockholder that acquires common stock will not have an effective voice in the management of the Company.
We are a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors.
We are an “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including “emerging growth companies” such as, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Our status as a smaller reporting company is determined on an annual basis. We cannot predict if investors will find our Common Stock less attractive or our company less comparable to certain other public companies because we will rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future financial results may not be as comparable to the financial results of certain other companies in our industry that adopted such standards. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.
The requirements of being a reporting public company may strain our resources, divert management’s attention and affect our ability to attract and retain additional executive management and qualified board members.
As a reporting public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer a “smaller reporting company.” The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. As a “smaller reporting company,” we receive certain reporting exemptions under The Sarbanes-Oxley Act.
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Changing laws, regulations and standards relating to corporate governance and public disclosure create uncertainty for public companies, increase legal and financial compliance costs and increase time expenditures for internal personnel. These laws, regulations and standards are subject to interpretation, in many cases due to their lack of specificity, their application in practice may evolve over time as regulators and governing bodies provide new guidance. These changes may result in continued uncertainty regarding compliance matters and may necessitate higher costs due to ongoing revisions to filings, disclosures and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate regulatory or legal proceedings against us and our business may be adversely affected.
As a public company under these rules and regulations, we expect that it may make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee and could also make it more difficult to attract qualified executive officers.
As a result of disclosure of information in this Form 10 and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and results of operations.
Our stock price may be volatile, which may result in losses to our shareholders.
The stock markets experienced and may experience significant price and trading volume fluctuations, and the market prices of companies quoted on the Pink Tier of the OTC Marketplace, which is where our stock is currently quoted, have experienced sharp share price and trading volume changes. The trading price of our common stock is likely to be volatile and could fluctuate widely in response to many factors both in and outside of our control, and include but are not limited to the following:
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variations in our operating results;
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changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;
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changes in operating and stock price performance of other companies in our industry;
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additions or departures of key personnel; and
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future sales of our common stock.
Domestic and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock.
Volatility in the price of our common stock may subject us to securities litigation.
The market for our common stock may be characterized by significant price volatility as compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources.
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Our common stock may become thinly traded and you may be unable to sell at or near ask prices, or at all.
We cannot predict the extent to which an active public market for trading our common stock will be sustained. The trading volume of our common stock may be sporadically or “thinly-traded,” meaning that the number of persons interested in purchasing our common stock at or near bid prices at certain given time may be relatively small or non-existent.
This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who generate or influence sales volume. Even if we came to the attention of such persons, those persons tend to be risk-averse and may be reluctant to follow, purchase, or recommend the purchase of shares of an unproven company such as ours until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.
The market price for our common stock may become volatile given our status as a relatively small company, which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.
Stockholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include but are not limited to: (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.
General risk statement
.
Based on all of the foregoing, we believe it is possible for future revenue, expenses and operating results to vary significantly from quarter to quarter and year to year. As a result, quarter-to-quarter and year-to-year comparisons of operating results are not necessarily meaningful or indicative of future performance. Furthermore, we believe that it is possible that in any given quarter or fiscal year our operating results could differ from the expectations of public market analysts or investors. In such event or in the event that adverse conditions prevail, or are perceived to prevail, with respect to our business or generally, the market price of our Common Stock would likely decline.
22
Item 2.
Financial Information
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS
The following is a discussion of the financial condition and results of operation of the Company as of the date of this registration statement. This discussion and analysis should be read in conjunction with the Company’s audited and unaudited consolidated financial statements including the Notes thereto, which are included elsewhere in this registration statement on Form 10.
About Beyond Commerce
We plan to operate within two markets: (1) the Business-to-Business Internet Marketing Technology and Services market and (2) the Information Management market. Our goal is to develop proprietary software for digital transformation of clients’ existing content. We believe our planned platform, strategy, and suite of software products and services will provide secure and scalable information control solutions for global companies. We believe our planned software will assist organizations in finding, utilizing, and sharing business information between devices in ways that are intuitive, efficient and productive. We believe that our business model will ensure that information will remain secure and private, as necessitated by the current market climate.
In addition, BYOC plans to provide solutions which facilitate the exchange of information and data transactions between supply chain participants, such as manufacturers, retailers, distributors and financial institutions. The goal is to automate potential client internal processes thereby increasing productivity and lowering costs. BYOC plans to develop proprietary algorithms which it will embed in the planned software to enable clients to access data and gain insight into their business, through that data, leading to improved internal decision making.
BYOC plans to offer the proposed software through traditional on-premise solutions, SaaS as a cloud based solution, or a combination of on-premise, SaaS or cloud based solutions. We will work with our clients and their needs as to which delivery method they prefer. We believe giving clients a choice and flexibility will help us to obtain long-term client value.
Management believes that the Company will require additional capital to manage its operations over the next 12 months. See “Plan of Operations” on page 29 below for a more complete discussion of the Company’s capital requirements.
Recent Developments
Service 800 Agreement
On December 14, 2017, we entered into an agreement with Service 800 and the sole shareholder of Service 800 (the “Shareholder”), pursuant to which we have agreed to purchase all of the issued and outstanding shares of common stock of Service 800 from the Shareholder (the “Transaction”). Service 800 operates as a premium provider of Customer Feedback Management Platforms to their Fortune 500 and 1000 clients on a global basis. Service 800 provides survey authoring, response rates, feedback types and data analysis on their proprietary, cloud based, automated and centralized platform. Service 800 has currently 40 full time employees that provide services to 130 companies and 300 service organizations. Service 800’s current operations and strategic business plan is to further develop its marketing and Customer Experience platform to use within the framework of its current Fortune 500 and 1000 clients. No assurance can be given that we will be successful in completing the Transaction.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent liabilities. On an on-going basis, management evaluates past estimates and judgments, including those related to bad debts, accrued liabilities, derivative liabilities, and contingencies. Management bases its estimates on historical
23
experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors” beginning on page 11 of this current report.
Critical Accounting Policies
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization and the valuation for non-cash issuances of equity instruments, web site, income taxes, and contingencies, among others. Actual results could differ materially from these estimates.
Cash and Cash Equivalents
The Company classifies as cash and cash equivalents amounts on deposit in banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase. The Company’s cash management system is currently integrated within one banking institution.
Fair Value of Financial Instruments
The carrying value of the current assets and liabilities approximate fair value due to their relatively short maturities.
Fair Value Measurements
Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.
The Company applies the fair value hierarchy as established by GAAP. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value as follows.
•
Level 1
– quoted prices in active markets for identical assets or liabilities.
•
Level 2
– other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
•
Level 3
– significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
Management considers all of its derivative liabilities to be Level 3 liabilities. At December 31, 2017 and 2016, respectively the Company had outstanding derivative liabilities, including those from related parties of $0 and $2,868,760, respectively.
24
Valuation of Derivative Instruments
ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment.
Management used the following inputs to value the Derivative Liabilities for the years ended December 31, 2017 and 2016, respectively:
|
|
2017
Derivative Liability
|
2016
Derivative Liability
|
|
Expected term
|
1 month to 9 months
|
1 month to 2 years
|
|
Exercise price
|
$0.00006 - $0.0006
|
$0.0006 -$0.0012
|
|
Expected volatility
|
287% to 765%
|
287% to 765%
|
|
Expected dividends
|
None
|
None
|
|
Risk-free rate
|
0.22% to 1.01%
|
0.14% to 1.06%
|
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35-21,
Accounting for the Impairment of Long-Lived Assets
. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During 2017 and 2016, the Company did not recognize any impairment charges.
Income Taxes
The Company will account for income taxes under ASC 740-10-30. 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
25
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 income of the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets may not be realized.
The Company follows the guidance of ASC 740-10-25 in determining whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company had no material adjustments to its liabilities for unrecognized income tax benefits.
Stock Based Compensation
The Company may issue compensatory stock options or shares to employees, consultants, and other service providers under its 2008 Equity Incentive Plan (the “Plan”). In some cases, it has issued compensatory warrants to service providers outside the Plan. The Company issues new shares of its common stock when employees or service providers exercise options or warrants. All equity-based compensation awarded has been determined under the fair value provisions of ASC 718. This compensation is then expensed over the vesting period of the underlying award. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered. At this time the Company has no warrants outstanding.
Stock-based compensation for awards granted to non-employees is periodically re-measured as the underlying options and warrants vest. The Company recognizes an expense for such awards throughout the performance period as the services are provided by the non-employees, based on the fair value of these options and warrants at each reporting period.
The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant. There are currently no options outstanding.
Segment Information
The Company’s operations are classified into two principal reportable segments: (i) internet retail store and its e-commerce operations (BOOMj.com d/b/a i-SUPPLY), and (ii) an online media and marketing company (Adjuice, Inc.).
Employee Benefits
The Company currently has no employees. During 2009, the shareholders approved the 2008 Equity Incentive Plan at the shareholders’ annual meeting held on July 24, 2009. This plan, which is discussed elsewhere in this registration statement, is set to expire on September 11, 2018.
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics.
In January 2016, the FASB issued a new standard related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The standard will be effective for us beginning January 1, 2019. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.
In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those
26
leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.
The standard will be effective for us beginning January 1, 2020. The standard may have a material impact on our balance sheets in the future if we entered into new leases, but will not have a material impact on our statement of operations. The most significant impact will be the recognition of ROU assets and lease liabilities for operating leases. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.
The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements.
Results of Operations
Financial Presentation
The following sets forth a discussion and analysis of the Company’s financial condition and results of operations for the fiscal years ended December 31, 2017 and 2016, and the three month periods ended March 31, 2018 and 2017. This discussion and analysis should be read in conjunction with our consolidated financial statements appearing elsewhere in this registration statement. The following discussion contains forward-looking statements. Our actual results may differ significantly from the results discussed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in “Item 1A — Risk Factors” of this registration statement.
|
|
|
For the years ended
|
|
|
For the quarters ended
|
|
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
|
|
(audited)
|
|
|
(unaudited)
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2018
|
|
|
2017
|
|
|
|
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
$
|
14,873
|
|
|
$
|
6,681
|
|
|
$
|
8,766
|
|
|
$
|
6,598
|
|
|
|
Payroll expense
|
|
|
217,500
|
|
|
|
180,000
|
|
|
|
90,000
|
|
|
|
45,000
|
|
|
|
Professional fees
|
|
|
15,321
|
|
|
|
2,018
|
|
|
|
514,840
|
|
|
|
1,840
|
|
|
|
Total costs and operating expenses
|
|
$
|
247,694
|
|
|
$
|
188,699
|
|
|
$
|
613,606
|
|
|
$
|
53,438
|
|
|
|
Loss from operations
|
|
|
(247,694
|
)
|
|
|
(188,699
|
)
|
|
|
(613,606
|
)
|
|
|
(53,438
|
)
|
|
|
Non-Operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on debt forgiveness
|
|
|
5,543,056
|
|
|
|
6,043,076
|
|
|
|
(99,570
|
)
|
|
|
763,332
|
|
|
|
Change in derivative liability
|
|
|
(1,560,071
|
)
|
|
|
2,435,170
|
|
|
|
-
|
|
|
|
2,502,064
|
|
|
|
Interest expense
|
|
|
(436,950
|
)
|
|
|
(501,808
|
)
|
|
|
-
|
|
|
|
(117,316
|
)
|
|
|
Total non-operating income (expense):
|
|
$
|
3,546,035
|
|
|
$
|
7,976,438
|
|
|
$
|
(99,570
|
)
|
|
$
|
3,148,080
|
|
|
|
Income (loss) before income taxes
|
|
$
|
3,298,340
|
|
|
$
|
7,787,739
|
|
|
$
|
(713,176
|
)
|
|
$
|
3,094,642
|
|
|
|
Provision for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
Net income (loss)
|
|
$
|
3,298,340
|
|
|
$
|
7,787,739
|
|
|
$
|
(713,176
|
)
|
|
$
|
3,094,642
|
|
|
|
Basic income (loss) per share
|
|
$
|
0.00
|
|
|
$
|
0.01
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
Diluted income (loss) per share
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
27
|
|
|
|
|
|
|
|
|
As of March 31
|
|
|
|
As of December 31,
|
|
|
(unaudited)
|
|
Consolidated Balance Sheet Data:
|
|
2017
|
|
|
2016
|
|
|
2018
|
|
|
|
Cash
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
Receivables
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Other assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Current liabilities
|
|
|
11,275,089
|
|
|
|
14,835,882
|
|
|
|
11,483,265
|
|
|
|
Long-term liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
Stockholders’ equity (deficit)
|
|
$
|
(11,275,089
|
)
|
|
$
|
(14,835,882
|
)
|
|
$
|
(11,533,265
|
)
|
|
Results of Operations
Revenue
The Company is currently a shell with no operations. The Company anticipates commencing operations during 2018.
Revenue was $0 for the three months ended March 31, 2018 and 2017, respectively.
Revenue was $0 for the years ended December 31, 2017 and 2016, respectively, as the Company was reassessing its viability.
Operating Expenses
For the three month period ended March 31, 2018, operating expenses were $613,606 and for the three month period ended March 31, 2017, operating expenses were $53,438. The significant increase in operating expenses came from approximately $392,000 in stock compensation paid to certain consultants for legal and financial advisory services to be rendered.
For the years ended December 31, 2017 and 2017, operating expenses were $247,694 and $188,699, respectively.
This increase of $58,995, or 31.3%, was due to an increase in selling, general and administrative cost, payroll expense and professional fees. A majority of this increase was due to an increase in the salary accrual in the amount of $30,000 for our Chief Executive Officer and President as of December 31, 2017.
Selling general and administrative expenses consisted primarily of consulting fees, professional fees, travel, meals and entertainment relating to be a public company. Selling, general and administrative expenses increased approximately $8,192, or 122%, due to fees paid to our transfer agent.
Non-operating income (expense)
The Company reported income (expense) of ($99,570) and $3,148,080 during the three months ended March 31, 2018 and 2017, respectively.
During the years ended December 31, 2017 and 2016, the Company evaluated its capital structure and determined that a total of $5,343,056 and $6,043,076, respectively, were no longer valid liabilities of the Corporation due to expiration of the statute of limitations for each liability. As a result, the Company reported the forgiven debt as income during the fiscal years ended December 31, 2017 and 2016, respectively. In addition, the Company reported interest expense of $436,950 and $501,808 for the years ended December 31, 2017 and 2016, respectively.
Net Income (loss)
For the three month period March 31, 2018, the Company incurred a net loss of $713,176 as compared to a net income of $3,094,642 for the three month period ended March 31, 2017, which was primarily due to a gain on debt forgiveness and a change in derivative liability.
28
For the year ended December 31, 2017, the Company generated a net income (loss) of $3,298,340 and for the year ended December 31, 2016, the Company generated a net income (loss) of $7,787,739. The substantial decrease in net income was primarily due to gains reported from the forgiven debts described above offset by a chance in derivative liability expense.
The net loss for the three month period ended March 31, 2018 was a result of no revenue coupled with salaries accrued for our CEO and the net income for the three month period ended March 31, 2017 was attributional to stock based compensation paid to certain consultants for legal and financial advisory services to be rendered, a gain on debt forgiveness and a change in derivative liability.
For the year ended December 31, 2016, the Company had an accumulated deficit of $41,764,781 and for year ended December 31, 2017, the Company had an accumulated deficit of $38,466,441.
Our net income for the year ended December 31, 2017, was $3,298,340 compared with net income of $7,787,739 for the year ended December 31, 2016, a decrease of $4,489,399 or 58%. The net income (loss) is influenced by the matters discussed above.
Plan of Operations
Cash Requirements
Over the next 12 months, we intend to carry on business as a development stage IMT&S provider. We anticipate that we will incur the following operating expenses during this period:
|
|
|
|
Estimated Funding Required During the Next Twelve Months
|
|
Expense
|
Amount
|
|
Legal
|
$ 200,000
|
|
Accounting
|
105,000
|
|
Salaries, Fees, Debt Services
|
187,000
|
|
Up-listing Fees
|
40,000
|
|
Investor Relations (CoreIR)
|
90,000
|
|
Lease W. Palm Beach Office
|
68,000
|
|
Travel
|
75,000
|
|
Miscellaneous
|
25,000
|
|
Total
|
$790,000
|
We will require funds of approximately $790,000 over the next 12 months to implement our business plan and to operate our business. This capital will be used to build out our infrastructure, to provide for the payment of advisory and accounting services, legal, lease of our office space and anticipated up-listing fees for the OTCQB or the Nasdaq Capital Market, LLC. However there can be no assurance that we will qualify for either exchange or that our application will be approved.
These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock, or that we will be able to raise sufficient capital required to implement our business plan on acceptable terms, if at all. Even if we are successful in raising sufficient capital to implement our business plan, we may continue to be unprofitable.
29
Purchase of Significant Equipment
We do not anticipate the purchase or sale of any plant or significant equipment during the next 12 months.
Going Concern
There is substantial doubt about our ability to continue as a going concern.
As of December 31, 2017, we had an accumulated deficit of $38,466,441 and has generated no revenues. The continuity of our future operations is dependent upon our ability to increase sales and brand awareness. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to continue relying upon the issuance of equity securities to finance our operations. In this regard, we are restricted by the number of shares available for issuance in an equity financing, and we will likely need to increase out authorized capital in order to take advantage of such financing. However there can be no assurance that we will be successful in obtaining shareholder approval to increase our authorized capital. However, there can be no assurance we will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. Our financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern.
Liquidity and Capital Resources
Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement its business plan. Since inception, we have been funded by related parties through capital investment and borrowing of funds.
We had total current assets of $0 for the years ended December 31, 2017 and 2016, respectively. Current assets would consist primarily of cash, the value of software, trademarks patents, websites and other intellectual properties. However, because we have decided to close and remove Adjuice and AIM Connections subsidies from our financial statements as of December 31, 2017, thereby cancelling-out all related assets of those companies. The Company carries a $38,466,441 net operating loss on its balance sheet.
We had total current liabilities of $11,275,882 and $14,835,882 for the years ended December 31, 2017 and 2016, respectively. Current liabilities consisted primarily of the accounts payable, accrued payroll and payroll taxes, and the accrued interest and principle due to Mr. Pursglove’s July 2011 Judgment. The decrease in our current liabilities is attributable to the $262,000 in debt which Mr. Pursglove converted into equity.
We had a working capital deficit of $11,275,089 and $14,835,582 for the years ended December 31, 2017 and 2016, respectively. This decrease of $3,560,483, or 24%, resulted primarily from debt forgiveness.
Cash Flow from Operating Activities
For the fiscal years ended December 31, 2017 and 2016, cash provided by (used in) operating activities was $0, respectively.
Cash Flow from Investing Activities
For the fiscal years ended December 31, 2017 and 2016, cash provided by (used in) investing activities was $0, respectively.
30
Cash Flow from Financing Activities
For the fiscal years ended December 31, 2017 and 2016, cash provided by (used in) financing activities was $0, respectively.
Contractual Obligations
As a “smaller reporting company,” we are not required to provide tabular disclosure of contractual obligations.
Inflation
Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
Seasonality
In the past, our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, in the event that we succeed in bringing our planned products to market.
Item 3. Properties
.
We currently lease virtual office space at 3773 Howard Hughes Parkway, Suite: 500 Las Vegas, NV 89169. We pay an annual fee of $120 for this lease. During 2018, we intend to move the Company’s headquarters to Florida. On April 16, 2018, we entered into a Letter of Intent with Cushman & Wakefield to lease commercial space in an office building located at 222 Lakeview Avenue, Suite 1630, West Palm Beach, FL 22401, which is in the city’s financial district. The Company’s change in corporate headquarters decrease travel time and overall travel expense. The move will also help to facilitate and reduce the cost to maintain and develop the Company’s future business, all of which we intend to maintain on the east coast of the United States. As of the date of this registration statement, we are currently negotiating an eight (8) year term for the office lease in which we anticipate leasing approximately 1,472 square feet of office space for a monthly rental fee of $5,633 for the first year, and increasing approximately 3% each year throughout the term of the lease.
Item 4. Security Ownership of Certain Beneficial Owners and Management
.
The following table sets forth certain information with respect to the beneficial ownership of our voting securities as of June 21, 2018, including: (i) any person or group owning more than 5% of any class of voting securities; (ii) each director; (iii) each named executive officer; and (iv) all executive officers and directors as a group.
Beneficial ownership is determined in accordance with Rule 13d-3 of the Securities and Exchange Act of 1934, as amended, and includes having voting and/or investment power with respect to the voting securities. Unless otherwise indicated in the footnotes to the table, each shareholder named in the table has sole voting and investment power with respect to the shares of common stock set forth opposite the shareholder’s name. Unless otherwise indicated, the address of all listed stockholders is c/o Beyond Commerce, Inc., 3773 Howard Hughes Parkway, Suite 500 Las Vegas, NV 89169.
31
As of June 21, 2018, there were 1,004,200,000 shares of the Company’s common stock issued and outstanding and 250,000,000 shares of Series A Preferred Stock issued and outstanding. For a description of our securities, see “Description of Registrant’s Securities to be Registered” on page 39 of this registration statement.
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Name of Beneficial Owner
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Common Stock Beneficially Owned (1)
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Percentage of Common Stock Owned (1)
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Preferred
Stock Beneficially Owned (1)
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Percentage of Preferred Stock Owned (1)
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Directors and Officers:
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George Pursglove
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-
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-
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%
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-
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-
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%
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All officers and directors (1 person)
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-
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-
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%
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-
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-
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%
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Beneficial owners of more than 5%
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The 2GP Group, LLC
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(2)
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-
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-
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206,250,000
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82.50
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%
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Fiona Oakley
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1,556,632
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*
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%
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43,750,000
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17.50
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%
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Caledonian Bank Limited
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(3)
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243,600,000
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24.26
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%
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-
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-
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%
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Eurolink Investments, Inc.
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(4)
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96,000,000
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9.56
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%
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-
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-
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%
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Legion Trading LLC
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(5)
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97,800,000
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9.74
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%
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-
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-
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%
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Universal Partners Corp.
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(6)
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97,800,000
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9.74
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%
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*Less than 1%
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(1)
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Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding. The calculations are based upon 1,004,200,000 shares of common stock issued and outstanding and 250,000,000 shares of Series A Preferred Stock issued and outstanding as of June 21, 2018.
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(2)
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The shares are held by an entity controlled by Geordan Pursglove, the son of our President and Chief Executive Officer. Mr. Geordan Pursglove, managing member. holds sole voting and dispositive power over these shares. The address for The 2GP Group, LLC is 102 NE 2
nd
St., Suite 915, Boca Raton, FL 33432
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32
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(3)
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The Caledonian Bank Limited is controlled by Louise Cooper, who holds sole voting and dispositive power over these shares. The address for this holder is 69 Dr. Roy’s Dr., Grand Cayman KY1-1102, Cayman Islands.
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(4)
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The address for Eurolink Investments, Inc. is 25 Water Ln., P.O. Box 2059, Belize City, Belize.
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(5)
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The address for Legion Trading, LLC is Hunkins Waterfront Plaza, P.O. Box 556, Charleston West Indies, Nevis.
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(6)
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The address for Universal Partners Corp. is 66 Euphrates Ave., Belize City, Belize.
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Change-in-Control
We do not currently have, nor are we aware of, any arrangements which if consummated may result in a change of control in the future.
Item 5. Directors and Executive Officers.
Identification of Directors and Executive Officers
The following table sets forth the names and ages of the Company’s current directors and executive officers:
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Name
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Age
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Position with the Company
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Date of Appointment
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George D. Pursglove
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63
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President, Chief Executive Officer, Director Secretary, Treasurer
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February 14, 2017
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There are no agreements with respect to electing directors. Each director of the Company shall serve for a term of one year or until his successor is elected at the Company’s Annual Meeting of Stockholders and is qualified, subject to removal by the Company’s stockholders. The board of directors appoints officers annually and each executive officer serves at the discretion of the board of directors. The Company does not have any standing committees at this time, and due to its small size does not believe that committees are necessary at this time. As of the date of this filing our sole director fulfills the duties of an audit committee. None of the directors held any directorships during the past five years in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such act, or of any company registered as an investment company under the Investment Company Act of 1940.
Director and Officer Biographical Information
George Pursglove – President, Chief Executive Officer, Secretary, Treasurer and Sole Director
Mr. Pursglove has served as our Chairman, President, and Chief Executive Officer since February 14, 2017. His appointment was ratified on April 27, 2017. Prior to this, Mr. Pursglove co-founded Advanced Predictive Analytics, Inc., where he has served as Chairman, President and Chief Executive Officer since July 2009. From October 2006 through October 2007, Mr. Pursglove was the co-founder, President and CEO of BOOMj.com, Inc., an early participant in lifestyle social media and e-commerce and predecessor entity of Beyond Commerce, Inc. From 1997 to 2002, he was founder and CEO of USA Service Systems, a company which provides merchandising and assembly solutions to major retailers. From January 1996 through March 1997 Mr. Pursglove was President and CEO of Univega Holdings, Inc. Mr. Pursglove was Director of Merchandising, Business Services Division for Office Depot from June 1994 through December 1995 and was Divisional Merchandise Manager II for Office Depot’s $600 million office furniture division from March 1993 through June 1994. Prior to Office Depot, he was a co-founder and executive for office supply retailer HQ Office Supplies from August 1988 through December 1992 (which was acquired by Staples) and warehouse home improvement retailer HomeClub from October 1983 through August 1988 (which was acquired by Zayre). In addition to his extensive executive experience, he has served as investor, director and/or consultant. Major experiences include
33
investing in shopping.com and All American SportsClub, Inc., and serving on the board of directors of Choices Entertainment (Nasdaq) and Sims Communication Inc. (Nasdaq). He has been an advocate for children rights through his work as a Guardian ad Litem with the Eleventh Judicial Court for Miami-Dade County, Florida. He holds a degree in Social Science from San Diego State University.
Director Independence
Quotations for the Company’s common stock are currently entered on the Pink Tier of the OTC Marketplace, which does not have director independence requirements. In determining whether any of its directors are independent, the Company has applied the definition for “Independent Directors” set out in Nasdaq Listing Rule 5605(a)(2). Mr. Pursglove is our sole director and officer and cannot be viewed as an independent director.
Family Relationship
Geordan Pursglove, managing member of The 2GP Group LLC, which holds 206,250,000 shares of Series A Preferred Stock, is the son of, our executive officer and sole director, Mr. George Pursglove.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
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1.
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been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
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2.
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had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
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3.
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been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
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4.
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been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity 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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5.
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been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
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6.
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been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
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34
Item 6.
Executive Compensation
.
Summary Compensation Table
The table below summaries the compensation paid or accrued to our named executive officer, as that term is defined in Item 402(m)(2) of Regulation S-K, during its last two completed fiscal years.
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Name and Principal Position
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Year*
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Salary
($)
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|
Bonus
($)
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|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
George D.
Pursglove
|
|
2017
|
$
|
$45,000*
|
|
$0
|
|
$0
|
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$0
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$0
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$0
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$45,000*
|
|
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2016
|
|
$0
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$0
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$0
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$0
|
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$0
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$0
|
|
$0
|
*Represents accrued but unpaid salaries during 2017.
There were no other salaries paid in 2017 and 2016. No executive officer received total annual salary and bonus compensation in excess of $100,000.
Summary of Employment Agreements and Material Terms
George Pursglove.
On June 1, 2017, we entered into an employment agreement with Mr. Pursglove pursuant to which he shall serve as the Company’s President, Chief Executive Officer and sole Director. The agreement provides for annual base salary of $360,000, payable for a period of three (3) years and provides for other benefits as defined in the agreement. Mr. Pursglove’s employment agreement further provides for the payment of severance under certain conditions. If the Company terminates his employment other than for “cause” or if Mr. Pursglove terminates his employment for “reasonable basis,” Mr. Pursglove shall be entitled to receive (i) his then in-effect base salary, bonuses and incentive compensation, benefits and other compensation that he would otherwise be entitled to receive through the remainder of his term under the agreement; (ii) any bonuses and incentive compensation for any preceding year or for the current year that have been earned, but not been paid as of the effective date of termination; and (iii) payment of all other accrued but unpaid payment and benefits as of the effective date of termination.
Other than as set out in this registration statement on Form-10 we have not entered into any employment or consulting agreements with any of our current officers, directors or employees.
Outstanding Equity Awards at Fiscal Year End
As of the Company’s fiscal years ended December 31, 2017 and 2016, the Company had no outstanding equity awards.
Director Compensation
The Company plans to appoint additional directors and may reimburse its directors for expenses incurred in connection with attending board meetings. The Company has not paid any director's fees or other cash compensation for services rendered as a director since our inception to the date of this filing. The Company has no formal plan for compensating its directors for their service in their capacity as directors.
Compensation Committee Interlocks and Insider Participation
The Company does not have a compensation committee. The board of directors conducts reviews with regards to the compensation of the directors and the Chief Executive Officer once a year. To make its recommendations on such compensation, the board of directors does take into account the types of compensation and the amounts paid to officers of comparable publicly traded companies.
35
Item 7.
Certain Relationships and Related Transactions and Director Independence
Transactions with Related Persons, Promoters and Certain Control Persons
On May 1, 2017, we authorized the issuance of 250,000,000 shares of Series A Preferred Stock to Mr. George Pursglove, reducing the July Judgment by approximately $250,000. On August 15, 2017, Mr. Pursglove directed the issuance of 206,250,000 shares of Series A Preferred Stock, valued at approximately $206,250,000, to The 2GP Group, LLC, an entity controlled by Geordan Pursglove, the son of our President, CEO and sole director, Mr. Pursglove. As discussed elsewhere in this registration statement, each share of Series A Preferred Stock entitles its holder to (i) cumulative, non-participating dividends in preference and priority to any declaration or payment of a dividend on any of the Company’s common stock, at a rate of 12% per annum, and (ii) three times (3x) voting preference over common stock.
Other than the foregoing, we have not engaged in any transaction within the past fiscal year and does not plan to engage in any transaction with a related person or a person with a direct or indirect material interest in an amount exceeding $120,000.
Corporate Governance
Director Independence
We currently do not have any independent directors, as the term “independent” is defined by the rules of the NASDAQ Stock Market.
Item 8.
Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
Item 9.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Market Information
Our common stock is subject to quotation on the Pink Tier of the OTC Markets under the symbol “BYOC”. There is currently no active trading market in the common stock on the OTC market. In the event that an active trading market commences, there can be no assurance as to the market price of the shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained. For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. The below prices represent inter-dealer quotations during the prior two fiscal years, without retail markup, markdown, or commission and may not necessarily represent actual transactions.
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|
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Fiscal 2017
|
|
Fiscal 2016
|
|
|
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High
|
|
Low
|
|
High
|
|
Low
|
|
First Quarter ended March 31
|
|
$
|
0.0009
|
|
$
|
0.0005
|
|
$
|
0.0001
|
|
$
|
0.0001
|
|
Second Quarter ended June 30
|
|
$
|
0.001
|
|
$
|
0.001
|
|
$
|
0.0004
|
|
$
|
0.0001
|
|
Third Quarter ended September 30
|
|
$
|
0.0065
|
|
$
|
0.005
|
|
$
|
0.0001
|
|
$
|
0.0001
|
|
Fourth Quarter ended December 31
|
|
$
|
0.029
|
|
$
|
0.024
|
|
$
|
0.0002
|
|
$
|
0.0002
|
36
Rule 144 Shares
In general, under Rule 144, a person who is not one of our affiliates and who is not deemed to have been one of our affiliates at any time during the three months preceding a sale and who has beneficially owned shares of our common stock for at least six months would be entitled to sell them without restriction, subject to the continued availability of current public information about us (which current public information requirement is eliminated after a one-year holding period).
A person who is an affiliate and who has beneficially owned shares of a company’s common stock for at least six months, subject to the continued availability of current public information about us, is entitled to sell within any three-month period a number of shares that does not exceed the greater of:
|
|
·
|
one percent of the number of shares of our company’s common stock then outstanding, which, in our case, will equal approximately 10,000,000 shares as of the date of this Current Report on Form-10; or
|
Rule 144 is not available for either a reporting or non-reporting shell company, as defined under Rule 405 of the Securities Act, unless our company: has ceased to be a shell company; is subject to the Exchange Act reporting obligations; has filed all required Exchange Act reports during the preceding twelve months; and at least one year has elapsed from the time the company filed with the SEC, current Form-10 type information reflecting its status as an entity that is not a shell company.
Holders
As of June 21, 2018, our shares of common stock were held by approximately 227 shareholders of record The Transfer Agent of our common stock is TranShare Stock Transfer, located at 15500 Roosevelt Blvd, Suite 301 Clearwater, FL 33760 and their telephone number is (303) 662-1112.
Dividends
Any decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends, subject to the approval of our stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
On September 11, 2008, our Board of Directors adopted a 2008 Equity Incentive Plan (the “Plan”), and on June 12, 2009 the Board amended the Plan to increase the number of shares of common stock that may be issued under the Plan from 3,500,000 to 7,000,000. Effective April 1, 2010, the Board of Directors further increased the number of shares issuable under the Plan by 10,000,000 to a total of 17,000,000 shares. On July 24, 2009, the Plan was submitted to, and approved by, our stockholders at the 2009 Annual Meeting of stockholders. Under the Plan, we are currently authorized to grant options, restricted stock and stock appreciation rights to purchase up to 17,000,000 shares of common stock to our employees, officers, directors, consultants and advisors. Awards under the plan may consist of stock options (both non-qualified options and options intended to qualify as “Incentive Stock Options” under Section 422 of the Internal Revenue Code of 1986, as amended), restricted stock awards and stock appreciation rights.
The Plan is administered by our Board of Directors or a committee appointed by the Board, which determines the persons to whom awards will be granted, the type of award to be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.
The Plan provides that the exercise price of each incentive stock option may not be less than the fair market value of our common stock on the date of grant (or 110% of the fair market value in the case of a grantee holding more than 10% of our outstanding common stock). The exercise price of a non-qualified stock option shall be no less than the fair market value of the common stock on the date of grant. The maximum number of options that may be granted in any fiscal year to any participant is 5,000,000.
37
The Plan also permits the grant of freestanding stock appreciation rights or in tandem with option awards. The grant price of a stock appreciation right shall be no less than the fair market value of a share on the date of grant of the stock appreciation right. No stock appreciation right shall be exercisable later than the tenth anniversary of its grant. Upon the exercise of a stock appreciation right, a participant shall be entitled to receive common stock at a fair market value equal to the benefit to be received by the exercise.
The Plan also provides us with the ability to grant or sell shares of common stock that are subject to certain transferability, forfeiture, repurchase or other restrictions. The type of restriction, the number of shares of restricted stock granted and other such provisions shall be determined by our Board of Directors or its committee.
Unless otherwise determined by our Board of Directors or its committee, awards granted under the Plan are not transferable other than by will or by the laws of descent and distribution.
The Plan provides that, except as set forth in an individual award agreement, upon the occurrence of a corporate transaction: (1) our Board of Directors or its committee shall notify each participant at least thirty (30) days prior to the consummation of the corporate transaction or as soon as may be practicable and (2) all options and stock appreciation rights shall terminate and all restricted stock shall be forfeited immediately prior to the consummation of such corporate transaction unless the committee determines otherwise in its sole discretion. A “corporate transaction” means (1) a liquidation or dissolution of the Company; (2) a merger or consolidation of the Company with or into another corporation or entity (other than a merger with a wholly-owned subsidiary); or (3) the sale of all or substantially all of the assets of the Company.
Our Board of Directors may alter, amend or terminate the plan in any respect at any time, but no alteration, amendment or termination will adversely affect in any material way any award previously granted under the Plan, without the written consent of the participant holding such award.
This Plan is set to expire on September 11, 2018.
During the years ended December 31, 2017 and 2016, the Company did not issue any stock or options as it had no employees.
|
Plan Category
|
|
Number of Securities to be issued upon exercise of outstanding warrants, options and rights
|
|
Weighted average price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding column A)
|
|
Equity Compensation Plans Approved by Securities Holders
|
|
17,000,000
|
|
N/A
|
N/A
|
|
Equity Compensation Plans Not Approved by Security Holders
|
|
0
|
|
N/A
|
N/A
|
Item 10.
Recent Sale or Issuance of Unregistered and Restricted Securities.
On April 27, 2017, the Company issued 1,556,632 shares of common stock, par value $0.001 per share, to Mr. Pursglove, reducing the July Judgment by $12,453.
Effective July 27, 2017, the Company filed a certificate of designation with the Secretary of State of the State of Nevada, pursuant to which it designated the Series A Preferred Stock. Each share of Series A Preferred Stock is convertible into one share of common stock. In addition, each share of Series A Preferred Stock entitles its holder to (i) cumulative, non-participating dividends in preference and priority to any declaration or payment of a dividend on any of the Company’s common stock, at a rate of 12% per annum, and (ii) three times (3x) voting preference over common stock. On the same date, the Company issued 250,000,000 shares of its Series A Preferred Stock to Mr. Pursglove, further reducing the award under the July Judgment owed to Mr. Pursglove by $250,000. Mr. Geordan Pursglove also has advanced the Company $46,275 to pay certain company related expenses.
38
On March 12, 2018, the Company issued 3,500,000 shares of restricted common stock to Maxim Group LLC, as compensation for services to be rendered pursuant to the financial advisory agreement.
On April 16, 2018 the Company issued 700,000 shares of restricted common stock for legal services to be rendered.
In connection with the foregoing issuances, the Company relied upon the exemption from securities registration provided by Section 4(a)(2) under the Securities Act for transactions not involving a public offering.
Item 11.
Description of Registrant’s Securities to be Registered
.
Capital Stock
Common Stock
We are authorized to issue 1,050,000,000 shares of common stock, par value $0.001 per share. Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Our bylaws provide that any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors. Stockholders do not have pre-emptive rights to purchase shares in any future issuance of our common stock.
The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary and other holdings and investments. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.
All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.
Preferred Stock
We are authorized to issue up to 250,000,000 shares of our “blank check” preferred stock, par value of $0.001. Effective July 27, 2017, we designated 250,000,000 of our “blank check” preferred shares as Series A Preferred Stock, all of which are issued and outstanding as of the date of this registration statement. Each share of Series A Preferred Stock entitles its holder to (i) cumulative, non-participating dividends in preference and priority to any declaration or payment of a dividend on any of the Company’s common stock, at a rate of 12% per annum, and (ii) three times (3x) voting preference over common stock.
Warrants
The Company entered into an agreement in conjunction with the convertible notes payable issued on March 28, 2018 to issue seven (7) warrants valued at $15,000 per warrant which has an exercise price of $0.15 or 65% of the three lowest trading days within a 20 day market price timeframe, whichever is lower to purchase the Company’s $0.001 par value common stock. The warrant also has certain cashless exercise features. The issuance of these warrants is predicated on the completion of the funding requirements within the terms of the security agreement.
Convertible Notes
On March 28, 2018, the Company issued a series of convertible notes in the principal amount of $1,000,000, convertible into shares of common stock, par value $0.001 per share, of the Company.
39
Anti-takeover Effects of Our Articles of Incorporation and By-laws
Our amended and restated articles of incorporation and bylaws contain certain provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the Company or changing its board of directors and management. According to our bylaws and articles of incorporation, neither the holders of the Company’s common stock nor the holders of the Company's preferred stock have cumulative voting rights in the election of our directors. The combination of the present ownership by a few stockholders of a significant portion of the Company's issued and outstanding common stock and lack of cumulative voting makes it more difficult for other stockholders to replace the Company's board of directors or for a third party to obtain control of the Company by replacing its board of directors.
Anti-takeover Effects of Nevada Law
Business Combinations
The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder: for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or after the expiration of the three-year period, unless:
·
the transaction is approved by the board of directors or a majority of the voting power held by disinterested stockholders, or
·
if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher.
A “combination” is defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, with an "interested stockholder" having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, or (c) 10% or more of the earning power or net income of the corporation.
In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 10% or more of a corporation's voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Control Share Acquisitions
The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS, which apply only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in Nevada, prohibit an acquirer, under certain circumstances, from voting its shares of a target corporation's stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation's disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power. Once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.
40
Item 12.
Indemnification of Directors and Officers
.
Section 78.138 of the NRS provides that a director or officer will not be individually liable unless it is proven that (i) the directors or officer's acts or omissions constituted a breach of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud or a knowing violation of the law.
Section 78.7502 of NRS permits a company to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action, suit or proceeding if the officer or director (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner the officer or director reasonably believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable cause to believe the conduct of the officer or director was unlawful.
Section 78.751 of NRS permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil or criminal action, suit or proceeding as they are incurred and in advance of final disposition thereof, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the company. Section 78.751 of NRS further permits the company to grant its directors and officers additional rights of indemnification under its articles of incorporation or bylaws or otherwise.
Section 78.752 of NRS provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the company, or is or was serving at the request of the company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.
Our Articles of Incorporation provide that no director or officer of the Company will be personally liable to the Company or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or (ii) the payment of dividends in violation of
Section 78.300 of NRS. In addition, our bylaws permit for the indemnification and insurance provisions in Chapter 78 of the NRS.
Insofar as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling the company pursuant to provisions of our articles of incorporation and bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding, which may result in a claim for such indemnification.
41
Item 13.
Financial Statements and Supplementary Data
.
|
Unaudited Financial Statements as of and for the Three Months Ended March 31, 2018 and 2017
|
|
Page
|
|
|
|
|
|
Unaudited Consolidated Balance Sheets
|
|
F-3
|
|
|
|
|
|
Unaudited Consolidated Statements of Operations
|
|
F-4
|
|
|
|
|
|
Unaudited Consolidated Statements of Cash Flows
|
|
F-5
|
|
|
|
|
|
Notes to the Unaudited Consolidated Financial Statements
|
|
F-6
|
|
|
|
|
|
Audited Financial Statements as of and for the Year Ended December 31, 2017 and 2016
|
|
Page
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
F-16
|
|
|
|
|
|
Consolidated Balance Sheets
|
|
F-17
|
|
|
|
|
|
Consolidated Statements of Operations
|
|
F-18
|
|
|
|
|
|
Consolidated Statements of Cash flows
|
|
F-19
|
|
|
|
|
|
Consolidated Statements of Stockholders’ Equity
|
|
F-20
|
|
|
|
|
|
Notes to the Consolidated Financial Statements
|
|
F-21
|
|
|
|
|
42
BEYOND COMMERCE, INC.
TABLE OF CONTENTS
|
|
Page
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2018 (Unaudited) & DECEMBER 31, 2017
|
F-3
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018 & 2017 (Unaudited)
|
F-4
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018 & 2017 (Unaudited)
|
F-5
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|
F-6
|
F-
2
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
ASSETS
|
|
Unaudited
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Total current assets
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
263,894
|
|
|
$
|
263,894
|
|
|
Accounts payable – related party
|
|
|
64,881
|
|
|
|
46,275
|
|
|
Other current liabilities
|
|
|
2,854,610
|
|
|
|
2,665,040
|
|
|
Accrued payroll & related items
|
|
|
1,464,395
|
|
|
|
1,464,395
|
|
|
Accrued payroll taxes
|
|
|
1,077,163
|
|
|
|
1,077,163
|
|
|
Pursglove Judgment payable
|
|
|
5,758,322
|
|
|
|
5,758,322
|
|
|
Total current liabilities
|
|
|
11,483,265
|
|
|
|
11,275,089
|
|
|
|
|
|
|
|
|
|
|
|
|
Long- term borrowings
|
|
|
50,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
11,533,265
|
|
|
$
|
11,275,089
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine Equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value of 250,000,000 shares authorized and 250,000,000 shares issued and outstanding as of March 31, 2018 and December 31,2017
|
|
|
250,000
|
|
|
|
250,000
|
|
|
Stockholders’ deficit:
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 1,050,000,000 shares authorized as of March 31, 2018 and 1,000,000,000 shares authorized as of December 31, 2017 and 1,003,500,000 and 1,000,000,000 issued and outstanding as of March 31, 2018 and at December 31, 2017, respectively.
|
|
|
1,003,500
|
|
|
|
1,000,000
|
|
|
Additional paid in capital
|
|
|
26,392,852
|
|
|
|
25,941,352
|
|
|
Accumulated deficit
|
|
|
(39,179,617
|
)
|
|
|
(38,466,441
|
)
|
|
Total stockholders' deficit
|
|
|
(11,533,265
|
)
|
|
|
(11,275,089
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' deficit
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-
3
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH PERIODS ENDED MARCH 31,
UNAUDITED
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Revenues
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Selling general and administrative
|
|
|
8,766
|
|
|
|
6,598
|
|
|
Payroll expense
|
|
|
90,000
|
|
|
|
45,000
|
|
|
Professional fees
|
|
|
514,840
|
|
|
|
1,840
|
|
|
Total operating expenses
|
|
|
613,606
|
|
|
|
53,438
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(613,606
|
)
|
|
|
(53,438
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(99,570
|
)
|
|
|
(117,316
|
)
|
|
Gain on debt forgiveness
|
|
|
-
|
|
|
|
763,332
|
|
|
Change in derivative liability
|
|
|
-
|
|
|
|
2,502,064
|
|
|
Total non-operating income (expense)
|
|
|
(99,570
|
)
|
|
|
3,148,080
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(713,176
|
)
|
|
|
3,094,642
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income tax
|
|
|
-
|
|
|
|
-
|
|
|
Net income (loss)
|
|
$
|
(713,176
|
)
|
|
$
|
3,094,642
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share-basic and diluted
|
|
$
|
(0.00)
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding basic
|
|
|
1,001,011,111
|
|
|
|
998,443,368
|
|
|
Weighted average number of common shares outstanding diluted
|
|
|
1,001,011,111
|
|
|
|
15,890,452,368
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-
4
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIODS ENDED MARCH 31,
UNAUDITED
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Net income (loss)
|
|
$
|
(713,176
|
)
|
|
$
|
3,094,642
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Stock issued for services
|
|
|
455,000
|
|
|
|
-
|
|
|
Debt forgiveness
|
|
|
-
|
|
|
|
(763,332
|
)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in accounts payable
|
|
|
18,606
|
|
|
|
83,615
|
|
|
Increase (decrease) in payroll liabilities
|
|
|
180,000
|
|
|
|
45,000
|
|
|
Increase (decrease) in other current liabilities
|
|
|
9,570
|
|
|
|
42,139
|
|
|
Change in derivative liability
|
|
|
-
|
|
|
|
(2,502,064
|
)
|
|
Net cash used in operating activities.
|
|
$
|
(50,000
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Cash receipts from convertible notes payable
|
|
|
50,000
|
|
|
|
-
|
|
|
Net cash provided from financing activities
|
|
$
|
50,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning balance
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Cash and cash equivalents, ending balance
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
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5
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Beyond Commerce, Inc., formerly known as BOOMj, Inc. (the “Company”, “BCI”, and “we”), is a multi-faceted business serving as a media hub for high traffic web properties, and owns and operates synergistic technology, in Ad Networking, and E-Commerce. Our initial business was BOOMj.com, Inc. a niche portal and social networking site for Baby Boomers and Generation Jones. This migrated into our E-Commerce platform known as i-SUPPLY, an online storefront that offered easy to use, fully customizable E-commerce services, and revenue solutions for any third party Web site large or small, and hosted local ads, providing extensive reach for our proprietary advertising partner network platform.
During the third quarter of 2009 the Company formed a subsidiary, KaChing KaChing, Inc., a Nevada corporation (“KaChing Nevada” or “KaChing KaChing” or “KaChing”). This was an E-commerce platform that provided a complete turn-key E-commerce solution to third party Store Owners. On April 22, 2010, KaChing merged with Duke Mining Company, Inc. to become a new public company. As a result of the merger transaction, KaChing KaChing interest in outstanding capital stock of the Company’s. was reduced to 20.8%. This investment was written off in 2015 and therefore the Company no longer has an interest in KaChing KaChing.
During the second quarter 2010 we acquired 100% of the outstanding stock of Adjuice, Inc. in order to enhance our presence in the Ad Networking business. The Adjuice network had distributed leads to over 350 retail clients along seven major verticals, all offering top payouts. Adjuice had owned and managed over 120 sites, all optimized for brand recognition and conversion performance. Adjuice has a solid infrastructure for selling its own products, targeting advertisers and publishers and their related downstream partners with Adjuice’s tailored lead generation programs.
On March 31, 2011, we acquired AIM Connection, Inc., a leading direct sales affiliate, SEO provider, social network and website generator. AIM Connection was the combination of internet marketing techniques and automation software, which allowed its software to be controlled and managed by the client.
During 2017 the Company reevaluated the current status of all these businesses and determined that many of these businesses were no longer viable.
History of the Company
The Company, formerly known as Reel Estate Services, Inc. (“RES”), was incorporated in Nevada on January 12, 2006. As of December 28, 2007, RES was a public shell company, defined by the Securities and Exchange Commission (“SEC”) as an inactive, publicly quoted company with nominal assets and liabilities. Subsequent to the merger with BOOMj.com, on January 14, 2008, RES changed its name to Boomj, Inc.
In December 2008, the Company changed its name from BOOMj, Inc. to Beyond Commerce, Inc. to more accurately reflect the new structure of the Company consisting at that point in time of two operating divisions: BOOMj.com d/b/a i-SUPPLY and until its assets were sold, LocalAdLink, Inc.
Basis of Presentation
The condensed consolidated financial statements and the notes thereto for the periods ended March 31, 2018 and 2017 included herein have been prepared by management and are unaudited. Such condensed financial statements reflect, in the opinion of management, all adjustments necessary to present fairly the financial position and results of operations as of and for the periods indicated and in order to make the financial statements not misleading. All such adjustments are of a normal recurring nature. These interim results are not necessarily indicative of the results for any subsequent period or for the fiscal year ending December 31, 2018.
Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto for the fiscal year ended December 31, 2017.
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6
Plan of Operations
Continuing in 2018, the Company has reduced operations significantly and continued a plan to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation and, to a lesser extent that desires to employ our funds in its business. Our principal business objective for the next 12 months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The analysis of new business opportunities will be undertaken by our executive management team. In our efforts to analyze potential acquisition targets, we may consider the following kinds of factors:
• Potential for growth, indicated by new technology, anticipated market expansion or new products;
• Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
• Strength and diversity of management, either in place or scheduled for recruitment;
• Capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
• The cost of participation by us as compared to the perceived tangible and intangible values and potentials;
• The extent to which the business opportunity can be advanced;
• The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
• Other relevant factors.
In applying the foregoing criteria, no one of which will be controlling, our management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the limited capital we have available for investigation, we may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
The manner in which we participate in an opportunity will depend upon the nature of the opportunity, our respective needs and desires as well as those of the promoters of the opportunity, and the relative negotiating strength of us and such promoters.
It is likely that we will acquire our participation in a business opportunity through the issuance of common stock or other securities. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), depends upon the issuance to the stockholders of the acquired company of at least 80% of the common stock of the combined entities immediately following the reorganization. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares. This could result in substantial additional dilution to the equity of those who were our stockholders prior to such reorganization.
Our present stockholders will likely not have control of a majority of our voting shares following a reorganization transaction. As part of such a transaction, our current director may resign and new directors may be appointed without any vote by stockholders.
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7
In the case of an acquisition, the transaction may be accomplished upon the sole determination of our management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving our company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding shares. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval if possible.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision not to participate in a specific business opportunity is made, the costs theretofore incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in our loss of the related costs incurred.
We do not currently engage in any business activities that provide us with positive cash flows. As such, the costs of investigating and analyzing business combinations for the next approximately 12 months and beyond will be paid with our current cash and if necessary, with additional funds raised through other sources, which may not be available on favorable terms, if at all.
We do not believe that we will be able to meet these costs with our current cash on hand and will require additional debt or equity funding in order to maintain operations.
NOTE 2.
SELECTED ACCOUNTING POLICIES
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization and the valuation for non-cash issuances of equity instruments, web site, income taxes, and contingencies, among others. Actual results could differ materially from these estimates.
Fair Value of Financial Instruments
The carrying value of the current assets and liabilities approximate fair value due to their relatively short maturities.
Fair Value Measurements
Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.
The Company applies the fair value hierarchy as established by GAAP. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value as follows.
• Level 1 – quoted prices in active markets for identical assets or liabilities.
• Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
• Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
Management considers all of its derivative liabilities to be Level 3 liabilities. At March 31,2018 and December 31, 2017, respectively the Company had outstanding derivative liabilities, including those from related parties of $0 and $0, respectively.
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8
Valuation of Derivative Instruments
ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35-21,
Accounting for the Impairment of Long-Lived Assets
. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During 2018 and 2017, the Company did not recognize any impairment charges.
Segment Information
The Company’s operations are classified into two principal reportable segments: (i) internet retail store and its e-commerce operations (BOOMj.com d/b/a i-SUPPLY), and (ii) an online media and marketing company (Adjuice, Inc.).
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics.
In January 2016, the FASB issued a new standard related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The standard will be effective for us beginning January 1, 2019. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.
In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.
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9
The standard will be effective for us beginning January 1, 2020. The standard may have a material impact on our balance sheets in the future if we entered into new leases, but will not have a material impact on our statement of operations. The most significant impact will be the recognition of ROU assets and lease liabilities for operating leases. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.
The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements.
NOTE 3. GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because of recent events, no certainty of continuation can be stated. The accompanying condensed consolidated financial statements for March 31, 2018 and 2017 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in attempting to raise capital from additional debt and equity financing. Due to its nonexistent revenues, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue or through a merger transaction with a well-capitalized entity. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. If we are unable to obtain additional funds, or if the funds cannot be obtained on terms favorable to us, we will be required to delay, scale back or eliminate our plans to continue to develop and expand our operations or in the extreme situation, cease operations altogether.
NOTE 4.
OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
|
|
|
March 31, December 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Accrued interest
|
|
$
|
2,674,482
|
|
|
$
|
2,574,912
|
|
|
Accrued payroll and related expenses
|
|
|
1,464,395
|
|
|
|
1,464,395
|
|
|
Payroll tax liability
|
|
|
1,077,163
|
|
|
|
1,077,163
|
|
|
Other
|
|
|
180,128
|
|
|
|
90,128
|
|
|
Total other current liabilities
|
|
$
|
5,396,168
|
|
|
$
|
5,206,598
|
|
Beginning in 2015, the Company began reviewing certain liabilities as to its continuing outstanding position in regards to the statute of limitations and reduced accordingly.
NOTE 5.
LONG TERM BORROWINGS
|
Long-term borrowings consist of the following:
|
|
March 31, December 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Convertible Promissory Notes, bearing an annual interest rate of 10% secured, due 08/28/2019
|
|
|
50,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long term borrowings
|
|
$
|
50,000
|
|
|
$
|
-
|
|
F-
10
|
|
On March 28, 2018 the Company entered into a convertible promissory note and a security purchase agreement (SPA) dated March 28, 2018. The SPA was for a total of $1,000,000, consisting of seven tranches of funding, with the initial tranche consisting of $100,000 and each subsequent investor note equal to $150,000. The parties closed on the first tranche on March 28, 2018. There can be no assurance that the Company will receive any further tranches.
On March 28, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated March 28, 2018 in the amount of $50,000. The lender was Iliad Research and Trading, L.P. The notes have a maturity of seventeen (17) months from issuance are due on August 28, 2019. have an interest rate of 10% per annum and are convertible at a price of $0.15 per share. If at the Company’s option decides to repay the loan with shares of its common stock the conversion price becomes 65% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to
satisfy the note with cash. This Note is secured with 39,000,000 of the Company’s $0.001 par value common stock.
|
|
|
|
|
|
The Company reevaluated the several loans as to their continued liability in relation to the statute of limitations and retired several of these items as the term had expired. The Company recorded $0 and $17,746 as interest expense on the above notes for the three months ended March 31, 2018 and 2017, respectively.
|
NOTE 7.
COMMON STOCK, WARRANTS AND PAID IN CAPITAL
Common Stock
As of March 31, 2018, our authorized capital stock consisted of 1,050,000,000 shares of common stock, par value $0.001 per share. As of March 31, 2018, there were 1,003,500,000 issued and outstanding shares of common stock.
On March 5, 2018, the Company’s board of directors increased the authorized shares by 10,000,000 bringing the total authorized to 1,010,000,000. Subsequently on March 26, 2018 the Company’s board of directors increased the authorized shares by another 40,000,000, bringing the total authorized to 1,050,000,000. The Company on March 5, 2018 issued 3,500,000 shares of its $0.001 common stock in relation to its advisory agreement with Maxim Group LLC valued at $455,000.
Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
Warrants
The Company entered into an agreement in conjunction with the March 28
th
convertible notes payable to issue seven (7) warrants valued at $15,000 per warrant which has an exercise price of $0.15 or 65% of the three lowest trading days within a 20 day market price timeframe, whichever is lower to purchase the Company’s $0.001 par value common stock. The warrant also has certain cashless exercise features. The issuance of these warrants is predicated on the completion of the funding requirements within the terms of the security agreement.
2008 Equity Incentive Stock Option Plan
During the three-month period ended March 31, 2018, the Company did not issue any stock options. This plan expires on September 11, 2018.
Dividends
The Company anticipates that all future earnings will be retained to finance future growth. The payment of dividends, if any, in the future to the Company’s common stockholders is within the discretion of the Board of Directors of the Company and will depend upon the Company’s earnings, its capital requirements and financial condition and other
F-
11
relevant factors. The Company has not paid a dividend on its common stock and does not anticipate paying any dividends on its common stock in the foreseeable future but instead intends to retain all earnings, if any, for use in the Company’s business operations
.
NOTE 8. COMMITMENTS AND CONTINGENCIES
Legal Matters
In 2008 the Company filed suit against its former co-founder, President, Chief Executive Officer George Pursglove for breach of confidentiality and non-compete while employed and also postemployment, breach of fiduciary duty and other matters, and the Company is seeking to enforce certain non-compete agreements. The former CEO subsequently counter-sued the Company for breach of contract, breach of implied covenant of good faith and fair dealing and other matters. The former CEO is seeking to be awarded $75,000 in cash plus at least 3.3 million shares of stock of the Company. On July 28, 2011, the Company received a jury verdict ordering and adjudging in Case Number 2:08-cv-00496-KJD-LRL where BOOMj.com was the Plaintiff and the former CEO was the Defendant & Counterclaimant, that a judgment be entered in favor of the Defendant and Counterclaimant against the Plaintiff, BOOMj.com, in the amount of $20,775 for damages as to the claim for failure to pay wages, $3,000,000 for damages as to the conversion claim, and $3,000,000 for punitive damages. The current outstanding related to this manner for both March 31, 2018 and December 31, 2017 is $5,758,322. The Company is accruing interest at an annual rate of 5.29% on the outstanding balance. As of March 31, 2018 and December 31, 2017 the Company has accrued interest balance of $2,124,482 and 2,044,912, respectively.
On May 2, 2017 Pursglove debt was reduced by $262,453 through the issuance of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock and 1,556,632 shares of Common Stock reducing the balance to $5,758,322.
Operating Lease
Beyond Commerce currently leases virtual office space at 3773 Howard Hughes Parkway, Suite 500 Las Vegas, NV 89169 with plans to move the Company’s headquarters to West Palm Beach, FL. This space has a yearly rent of $120 which expires December 31, 2018. The move of the Company’s corporate headquarters to West Palm Beach will cut down on travel time and overall travel expense. The move will help to facilitate and reduce the cost to maintain and develop the Company’s future business which is all located on the East Coast of the US. The Company has entered into a Letter of Intent (LOI) with Cushman & Wakefield pertaining to specific office space at the Esparante Corporate Center located in the financial district of West Palm Beach, FL.
Tax Lien
On February 17, 2010, the Internal Revenue Service placed a federal tax lien of $756,711 and an additional $161,150 on June 14, 2010, against all of the property and rights to the property of BOOMj.com for unpaid federal payroll withholding taxes for the year ended December 31, 2009. The current amount outstanding including penalty and interest is $1,607,163, which is also inclusive of amounts outstanding for state tax related claims of $63,725. The accrued interest on the balance sheet related to this liability is $550,000 and $530,000 as of March 31, 2018 and December 31, 2017, respectively.
NOTE 9. RELATED PARTIES
On May 2, 2017, the Company authorized and issued 206,250,000 shares of BCI’s Series A Convertible 12% Cumulative Preferred stock at a price of ($.001 par value) per share to The 2GP Group LLC an entity controlled by Geordan Pursglove, our sole director’s son. The Series A Convertible 12% Cumulative Preferred stock include a three times (3x) voting preference. Mr. Geordan Pursglove also has advanced the Company $46,275 to pay certain company related expenses.
Also, on May 2, 2017 George Pursglove’ debt was reduced by $262,453 through the issuance of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock of which 43,750,000 were transferred to Fiona Oakley and 1,556,632 shares of Common Stock which also were issued to Fiona Oakley subsequent to this reduction.
The Company recorded $18,606 in advances from Geordan Pursglove as a related party transactions during the three-month period end March 31, 2018.
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12
NOTE 10. NET INCOME (LOSS) PER SHARE OF COMMON STOCK
The Company follows ASC 260-10 which requires presentation of basic and diluted Earnings per Share (“EPS”) on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying condensed consolidated financial statements, basic net income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the year. Basic net income (loss) per common share is based upon the weighted average number of common shares outstanding during the period.
There are no stock options or warrants that are exercisable into shares of the Company’s common stock as these were all extinguished; and convertible debt that is convertible into 333,333 and 14,642,009,000 shares of the Company’s common stock are not included in the computation along with 250,000,000 and zero of the Company’s preferred stock for the three month period ended March 31, 2018 and 2017, respectively, as the income share is negligible.
The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the three-month period ended March 31, 2018 and 2017:
|
|
|
Three-month period ended March 31,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
Net income (loss)
|
$
|
(713,176)
|
|
|
$
|
3,094,641
|
|
|
Weighted average shares used for basic earnings per share
|
1,001,011,111
|
|
|
998,443,368
|
|
|
Incremental diluted shares
|
-
|
*
|
|
14,892,009,000
|
|
|
Weighted average shares used for diluted earnings per share
|
1,001,011,111
|
|
|
15,890,452,368
|
|
|
Net income (loss) per share:
|
|
|
|
|
Basic
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
Diluted
|
$
|
0.00
|
|
|
$
|
0.00
|
|
*The shares associated with convertible debt, stock options and stock warrants are not included because the inclusion would be anti-dilutive, (i.e., reduce the net loss per common share).
NOTE 11. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
The Company paid $0 and $0 for the three months ended March 31, 2018 and 2017, respectively for interest. The Company did not make any payments for income tax during the three months ended March 31, 2018 and 2017. The Company did not make any payments for income tax during the years ended December 31, 2017 and 2016. Other non-cash financing included the Pursglove debt which was reduced by $262,453 through the issuance of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock and 1,556,632 shares of Common Stock.
NOTE 12. SUBSEQUENT EVENTS
The Company has not been a reporting Company within the rules of the Securities and Exchange Commission since May of 2011, and has attempted to solicit funding for the continuing operations or a potential sale. We currently plan to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation and, to a lesser extent that desires to employ our funds in its business. Our principal business objective for the next several months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
On April 16, 2018 the Company issued 700,000 shares of restricted common stock for legal services to be rendered in connection with the Maxim transaction.
While final closing has not yet occurred, the Company has signed a letter of intent to acquire certain entities.
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13
Beyond Commerce, Inc.
CONSOLIDATED AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2017 & 2016
F-
14
BEYOND COMMERCE, INC.
TABLE OF CONTENTS
|
AUDITED
|
Page
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-16
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2017 & 2016
|
F-17
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2017 & 2016
|
F-18
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FOR THE YEARS ENDED DECEMBER 31, 2017 & 2016
|
F-19
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED DECEMBER 31, 2017 & 2016
|
F-20
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
F-21
|
F-
15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Beyond Commerce, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Beyond Commerce, Inc. (the Company) as of December 31, 2017 and 2016, and the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2017, 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 December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits 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 audits provide a reasonable basis for our opinion.
Consideration of the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the
Company has incurred losses, has not generated sufficient revenue to cover its operating costs, and may be unable to raise further equity in support of operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Haynie & Company/
Haynie & Company
Salt Lake City, Utah
June 22, 2018
We have served as the Company’s auditor since 2018.
F-
16
BEYOND COMMERCE, INC.
CONSOLIDATED BALANCE SHEETS
AS OF December 31,
|
|
|
2017
|
|
|
2016
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Short- term borrowings
|
|
$
|
-
|
|
|
$
|
656,704
|
|
|
Accounts payable
|
|
|
263,894
|
|
|
|
204,925
|
|
|
Accounts payable – related party
|
|
|
46,275
|
|
|
|
-
|
|
|
Note derivative liability
|
|
|
-
|
|
|
|
2,868,760
|
|
|
Accrued interest and other current liabilities
|
|
|
2,665,040
|
|
|
|
2,670,660
|
|
|
Accrued payroll & related items
|
|
|
1,464,395
|
|
|
|
1,336,895
|
|
|
Accrued payroll taxes
|
|
|
1,077,163
|
|
|
|
1,077,163
|
|
|
Pursglove Judgment payable
|
|
|
5,758,322
|
|
|
|
6,020,775
|
|
|
Total current liabilities
|
|
|
11,275,089
|
|
|
|
14,835,882
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine Equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value of 250,000,000 shares authorized and 250,000,000 and 0 shares issued and outstanding as of December 31,2017 and 2016, respectively
|
|
|
250,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit:
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 1,050,000,000 shares authorized as of December 31, 2017 and 2016, and 1,000,000,000 issued and outstanding as of December 31, 2017 and 998,443,368 at December 31, 2016.
|
|
|
1,000,000
|
|
|
|
998,444
|
|
|
Additional paid in capital
|
|
|
25,941,352
|
|
|
|
25,930,455
|
|
|
Accumulated deficit
|
|
|
(38,466,441
|
)
|
|
|
(41,764,781
|
)
|
|
Total stockholders' deficit
|
|
|
(11,275,089
|
)
|
|
|
(14,835,882
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' deficit
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-
17
BEYOND COMMERCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
For the years ended December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Selling general and administrative
|
|
|
14,873
|
|
|
|
6,681
|
|
|
Payroll expense
|
|
|
217,500
|
|
|
|
180,000
|
|
|
Professional fees
|
|
|
15,321
|
|
|
|
2,018
|
|
|
Total costs and operating expenses
|
|
|
247,694
|
|
|
|
188,699
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(247,694
|
)
|
|
|
(188,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
Gain on debt forgiveness
|
|
|
5,543,056
|
|
|
|
6,043,076
|
|
|
Change in derivative liability
|
|
|
(1,560,071
|
)
|
|
|
2,435,170
|
|
|
Interest expense
|
|
|
(436,950
|
)
|
|
|
(501,808
|
)
|
|
Total non-operating income (expense)
|
|
|
3,546,035
|
|
|
|
7,976,438
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
3,298,340
|
|
|
|
7,787,739
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income tax
|
|
|
-
|
|
|
|
-
|
|
|
Net income
|
|
$
|
3,298,340
|
|
|
$
|
7,787,739
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share-basic
|
|
$
|
0.00
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding basic
|
|
|
999,479,701
|
|
|
|
998,443,368
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share-diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - diluted
|
|
|
15,891,488,701
|
|
|
|
20,248,443,368
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-
18
BEYOND COMMERCE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
For the years ended
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Net income
|
|
$
|
3,298,340
|
|
|
$
|
7,787,739
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Debt forgiveness
|
|
|
(5,543,056
|
)
|
|
|
(6,043,076
|
)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in accounts payable
|
|
|
105,245
|
|
|
|
8,699
|
|
|
Increase (decrease) in payroll liabilities
|
|
|
217,500
|
|
|
|
180,000
|
|
|
Change in derivative liability
|
|
|
1,560,071
|
|
|
|
(2,435,170
|
)
|
|
Increase (decrease) in other current liabilities
|
|
|
361,900
|
|
|
|
501,808
|
|
|
Net cash used in operating activities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning balance
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Cash and cash equivalents, ending balance
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-
19
BEYOND COMMERCE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
AUDITED
|
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Par
Value
|
|
|
Paid-In
Capital
|
|
|
Accumulated
Deficit
|
|
|
Stockholders’
Equity/(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2016
|
|
|
998,443,368
|
|
|
$
|
998,444
|
|
|
$
|
25,930,455
|
|
|
$
|
(49,552,520
|
)
|
|
$
|
(22,623,621
|
)
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,787,739
|
|
|
|
7,787,739
|
|
|
Balance, December 31, 2016
|
|
|
998,443,368
|
|
|
$
|
998,444
|
|
|
$
|
25,930,455
|
|
|
$
|
(41,764,781
|
)
|
|
$
|
(14,835,882
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock debt conversion
|
|
|
1,556,632
|
|
|
|
1,556
|
|
|
|
10,897
|
|
|
|
|
|
|
|
12,453
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298,340
|
|
|
|
3,298,340
|
|
|
Balance, December 31, 2017
|
|
|
1,000,000,000
|
|
|
$
|
1,000,000
|
|
|
$
|
25,941,352
|
|
|
$
|
(38,466,441
|
)
|
|
$
|
(11,525,089
|
)
|
The accompanying notes are an integral part of these consolidated financial statements.
F-
20
BEYOND COMMERCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Beyond Commerce, Inc., formerly known as BOOMj, Inc. (the “Company”, “BCI”, and “we”), is a multi-faceted business serving as a media hub for high traffic web properties, and owns and operates synergistic technology, in Ad Networking, and E-Commerce. Our initial business was BOOMj.com, Inc. a niche portal and social networking site for Baby Boomers and Generation Jones. This migrated into our E-Commerce platform known as i-SUPPLY, an online storefront that offered easy to use, fully customizable E-commerce services, and revenue solutions for any third party Web site large or small, and hosted local ads, providing extensive reach for our proprietary advertising partner network platform.
During the third quarter of 2009 the Company formed a subsidiary, KaChing KaChing, Inc., a Nevada corporation (“KaChing Nevada” or “KaChing KaChing” or “KaChing”). This was an E-commerce platform that provided a complete turn-key E-commerce solution to third party Store Owners. On April 22, 2010, KaChing merged with Duke Mining Company, Inc. to become a new public company. As a result of the merger transaction, the Company’s interest in outstanding capital stock of KaChing KaChing, Inc. was reduced to 20.8%. This investment was written off in 2015 and therefore the Company no longer has an interest in KaChing KaChing.
During the second quarter 2010 we acquired 100% of the outstanding stock of Adjuice, Inc. in order to enhance our presence in the Ad Networking business. The Adjuice network had distributed leads to over 350 retail clients along seven major verticals, all offering top payouts. Adjuice had owned and managed over 120 sites, all optimized for brand recognition and conversion performance. Adjuice has a solid infrastructure for selling its own products, targeting advertisers and publishers and their related downstream partners with Adjuice’s tailored lead generation programs.
On March 31, 2011, we acquired AIM Connection, Inc., a leading direct sales affiliate, SEO provider, social network and website generator. AIM Connection was the combination of internet marketing techniques and automation software, which allowed its software to be controlled and managed by the client.
During 2017 the Company reevaluated the current status of all these businesses and determined that many of these businesses were no longer viable.
History of the Company
The Company, formerly known as Reel Estate Services, Inc. (“RES”), was incorporated in Nevada on January 12, 2006. As of December 28, 2007, RES was a public shell company, defined by the Securities and Exchange Commission (“SEC”) as an inactive, publicly quoted company with nominal assets and liabilities. Subsequent to the merger with BOOMj.com, RES changed its name to BOOMj, Inc.
In December 2008, the Company changed its name from BOOMj, Inc. to Beyond Commerce, Inc. to more accurately reflect the new structure of the Company consisting at that time of two operating divisions: BOOMj.com d/b/a i-SUPPLY and until its assets were sold, LocalAdLink, Inc.
Basis of Presentation
The consolidated financial statements and the notes thereto for the years ended December 31, 2017 and 2016 included herein include the accounts of the Company, its wholly-owned subsidiaries BOOMj, Inc. d/b/a i-SUPPLY, AIM Connection Inc. and Adjuice, Inc.
The consolidated financial statements contain certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. All significant intercompany accounts and transactions have been eliminated in consolidation.
Plan of Operations
Continuing in 2017, the Company had reduced its operations significantly and continues its plan to investigate and if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation and to a lesser extent that desires to employ our funds in its business. Our principal business objective for the next 12 months and beyond will be to achieve long-term growth potential through a combination with a
F-
21
business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The analysis of new business opportunities will be undertaken by our executive management team. In our efforts to analyze potential acquisition targets, we may consider the following kinds of factors:
• Potential for growth, indicated by new technology, anticipated market expansion or new products;
• Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
• Strength and diversity of management, either in place or scheduled for recruitment;
• Capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
• The cost of participation by us as compared to the perceived tangible and intangible values and potentials;
• The extent to which the business opportunity can be advanced;
• The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
• Other relevant factors.
In applying the foregoing criteria, no one of which will be controlling, our management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the limited capital we have available for investigation, we may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
The manner in which we participate in an opportunity will depend upon the nature of the opportunity, our respective needs and desires as well as those of the promoters of the opportunity, and the relative negotiating strength of us and such promoters.
It is likely that we will acquire our participation in a business opportunity through the issuance of common stock or other securities. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), depends upon the issuance to the stockholders of the acquired company of at least 80% of the common stock of the combined entities immediately following the reorganization. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares. This could result in substantial additional dilution to the equity of those who were our stockholders prior to such reorganization.
Our present stockholders will likely not have control of a majority of our voting shares following a reorganization transaction. As part of such a transaction, our current director may resign and new directors may be appointed without any vote by stockholders.
In the case of an acquisition, the transaction may be accomplished upon the sole determination of our management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving our company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding shares. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval if possible.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision not to participate in a specific business opportunity is made, the costs theretofore incurred in the related investigation would not be recoverable.
F-
22
Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in our loss of the related costs incurred.
We do not currently engage in any business activities that provide us with positive cash flows. As such, the costs of investigating and analyzing business combinations for the next approximately 12 months and beyond will be paid with our current cash and if necessary, with additional funds raised through other sources, which may not be available on favorable terms, if at all.
We do not believe that we will be able to meet these costs with our current cash on hand and will require additional debt or equity funding in order to maintain operations.
NOTE 2.
ACCOUNTING POLICIES
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization and the valuation for non-cash issuances of equity instruments, web site, income taxes, and contingencies, among others. Actual results could differ materially from these estimates.
Cash and Cash Equivalents
The Company classifies as cash and cash equivalents amounts on deposit in banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase. The Company’s cash management system is currently integrated within one banking institution.
Fair Value of Financial Instruments
The carrying value of the current assets and liabilities approximate fair value due to their relatively short maturities.
Fair Value Measurements
Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.
The Company applies the fair value hierarchy as established by GAAP. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value as follows.
•
Level 1
– quoted prices in active markets for identical assets or liabilities.
•
Level 2
– other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
•
Level 3
– significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
Management considers all of its derivative liabilities to be Level 3 liabilities. At December 31, 2017 and 2016, respectively the Company had outstanding derivative liabilities, including those from related parties of $0 and $2,868,760, respectively.
F-
23
Valuation of Derivative Instruments
ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment.
Management used the following inputs to value the Derivative Liabilities for the years ended December 31, 2017 and 2016, respectively:
|
|
2017
Derivative Liability
|
2016
Derivative Liability
|
|
Expected term
|
1 month to 9 months
|
1 month to 2 years
|
|
Exercise price
|
$0.00006 - $0.0006
|
$0.0006 -$0.0012
|
|
Expected volatility
|
287% to 765%
|
287% to 765%
|
|
Expected dividends
|
None
|
None
|
|
Risk-free rate
|
0.22% to 1.01%
|
0.14% to 1.06%
|
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35-21,
Accounting for the Impairment of Long-Lived Assets
. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During 2017 and 2016, the Company did not recognize any impairment charges.
Income Taxes
The Company will account for income taxes under ASC 740-10-30. 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 income of the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets may not be realized.
F-
24
The Company follows the guidance of ASC 740-10-25 in determining whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company had no material adjustments to its liabilities for unrecognized income tax benefits.
Stock Based Compensation
The Company may issue compensatory stock options or shares to employees, consultants, and other service providers under its 2008 Equity Incentive Plan (the “Plan”). In some cases, it has issued compensatory warrants to service providers outside the Plan. The Company issues new shares of its common stock when employees or service providers exercise options or warrants. All equity-based compensation awarded has been determined under the fair value provisions of ASC 718. This compensation is then expensed over the vesting period of the underlying award. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered. At this time the Company has no warrants outstanding.
Stock-based compensation for awards granted to non-employees is periodically re-measured as the underlying options and warrants vest. The Company recognizes an expense for such awards throughout the performance period as the services are provided by the non-employees, based on the fair value of these options and warrants at each reporting period.
The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant. There are currently no options outstanding.
Segment Information
The Company’s operations are classified into two principal reportable segments: (i) internet retail store and its e-commerce operations (BOOMj.com d/b/a i-SUPPLY), and (ii) an online media and marketing company (Adjuice, Inc.).
Employee Benefits
The Company currently has no employees. During 2009, the shareholders approved the 2008 Equity Incentive Plan at the shareholders’ annual meeting held on July 24, 2009. The current Equity Incentive Plan is set to expire on September 11, 2018.
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics.
In January 2016, the FASB issued a new standard related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The standard will be effective for us beginning January 1, 2019. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.
In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.
F-
25
The standard will be effective for us beginning January 1, 2020. The standard may have a material impact on our balance sheets in the future if we entered into new leases, but will not have a material impact on our statement of operations. The most significant impact will be the recognition of ROU assets and lease liabilities for operating leases. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.
The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements.
NOTE 3. GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because of recent events, the Company cannot state with certainty of its ability to continue. The accompanying consolidated financial statements for December 31, 2017 and 2016 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has suffered losses from operations and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in attempting to raise capital from additional debt and equity financing. Due to its nonexistent revenues, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue or through a merger transaction with a well-capitalized entity. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. If we are unable to obtain additional funds, or if the funds cannot be obtained on terms favorable to us, we will be required to delay, scale back or eliminate our plans to continue to develop and expand our operations or in the extreme situation, cease operations altogether.
NOTE 4.
OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Accrued interest
|
|
$
|
2,574,912
|
|
|
$
|
2,595,482
|
|
|
Accrued payroll and related expenses
|
|
|
1,464,395
|
|
|
|
1,336,895
|
|
|
Payroll tax liability
|
|
|
1,077,163
|
|
|
|
1,077,163
|
|
|
Other
|
|
|
90,128
|
|
|
|
75,178
|
|
|
Total other current liabilities
|
|
$
|
5,206,598
|
|
|
$
|
5,084,718
|
|
Beginning in 2015, the Company began reviewing certain liabilities as to its continuing outstanding position in regards to the statute of limitations and reduced accordingly.
NOTE 5.
SHORT TERM BORROWINGS
|
Short term borrowings consist of the following:
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Sundry Bridge Notes, bearing an annual interest rate of 12%, unsecured, due 1/31/2010 - 10/05/2011*
|
|
|
-
|
|
|
|
106,704
|
|
|
Convertible Promissory Notes, bearing a default interest rate of 18%, due 2/26/11*
|
|
|
-
|
|
|
|
150,000
|
|
|
Convertible Promissory Notes, bearing a default interest rate of 24%, due 8/17/11*
|
|
|
-
|
|
|
|
400,000
|
|
|
Total principal
|
|
$
|
-
|
|
|
$
|
656,704
|
|
|
Less: unamortized debt discount
|
|
|
-
|
|
|
|
-
|
|
|
Total short-term borrowings
|
|
$
|
-
|
|
|
$
|
656,704
|
|
* The above notes with maturity dates on January 31, 2010, February 26, 2011and August 17, 2011 are in default as of the date of these consolidated financial statements for failure to pay the principal and accrued interest at Maturity.
F-
26
The Company did not enter into any new debt securities during the year ending December 31, 2017, however the Company reevaluated several loans as to their continued liability in relation to the statute of limitations and retired several of these items as the term had expired. The Company recorded $38,670 and $103,528 as interest expense on the above notes for the year ended December 31, 2017 and 2016, respectively.
NOTE 6.
COMMON STOCK, WARRANTS AND PAID IN CAPITAL
Common Stock
As of December 31, 2017, our authorized capital stock consisted of 1,000,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2017, there were 1,000,000,000 issued and outstanding shares of common stock. The Company issued 1,556,632 shares of stock during the twelve-month period ended December 31, 2017.
On May 2, 2017, the company converted $12,453 debt related to the Pursglove judgement to one individual. The Company issued 1,556,632 shares of its restricted common stock to convert this debt.
Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
Preferred Stock
As of December 31, 2017, our authorized preferred stock consisted of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock, par value $0.001 per share. As of December 31, 2017, there were 250,000,000 issued and outstanding shares of preferred stock. Shares and accrued but unpaid dividends are convertible into common stock at the option of the holder at a conversion price equal to the Series A issue price. Dividends will not begin to accrue until a minimum of $500,000 in subscriptions for the Series A preferred stock is reached. Due to the lack of authorized shares available, the preferred stock has been classified as mezzanine equity on the face of the balance sheet.
On May 2, 2017, the Company authorized and issued 250,000,000 shares of BCI’s Series A Convertible 12% Cumulative Preferred stock at a price of ($.001 par value) per share to The 2GP Group LLC as follows: 206,250,000 to an entity controlled by Geordan Pursglove our sole director’s son, and 43,750,000 to Fiona Oakley. Series A Convertible 12% Cumulative Preferred stock include a three times (3x) voting preference. The issuance of the 250,000,000 shares of Series A Convertible 12% Cumulative Preferred shares will decrease the judgment owed to Mr. George Pursglove by $250,000.
The debt related to the Pursglove judgment was reduced by a total of $262,453 as a result of Common and Preferred stock transactions.
Warrants
The Company does not have any outstanding common stock purchase warrants at December 31, 2017 and 2016. Those previous outstanding warrants from previous years all had expired by February 17, 2016.
2008 Equity Incentive Stock Option Plan
On September 11, 2008, our Board of Directors adopted Beyond Commerce’s 2008 Equity Incentive Plan (the “Plan”), and on June 12, 2009 the Board amended the Plan to increase the number of shares of common stock that may be issued under the Plan from 3,500,000 to 7,000,000. Effective April 1, 2010, the Board of Directors further increased the number of shares issuable under the Plan by 10,000,000 to a total of 17,000,000 shares. On July 24, 2009, the Plan was submitted to, and approved by, our stockholders at the 2009 Annual Meeting of stockholders. Under the Plan, we are currently authorized to grant options, restricted stock and stock appreciation rights to purchase up to 17,000,000 shares of common stock to our employees, officers, directors, consultants and advisors. Awards under the plan may consist of stock options (both non-qualified options and options intended to qualify as “Incentive Stock Options” under Section 422 of the Internal Revenue Code of 1986, as amended), restricted stock awards and stock appreciation rights.
F-
27
The Plan is administered by our Board of Directors or a committee appointed by the Board, which determines the persons to whom awards will be granted, the type of award to be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.
The Plan provides that the exercise price of each incentive stock option may not be less than the fair market value of our common stock on the date of grant (or 110% of the fair market value in the case of a grantee holding more than 10% of our outstanding common stock). The exercise price of a non-qualified stock option shall be no less than the fair market value of the common stock on the date of grant. The maximum number of options that may be granted in any fiscal year to any participant is 5,000,000.
The Plan also permits the grant of freestanding stock appreciation rights or in tandem with option awards. The grant price of a stock appreciation right shall be no less than the fair market value of a share on the date of grant of the stock appreciation right. No stock appreciation right shall be exercisable later than the tenth anniversary of its grant. Upon the exercise of a stock appreciation right, a participant shall be entitled to receive common stock at a fair market value equal to the benefit to be received by the exercise.
The Plan also provides us with the ability to grant or sell shares of common stock that are subject to certain transferability, forfeiture, repurchase or other restrictions. The type of restriction, the number of shares of restricted stock granted and other such provisions shall be determined by our Board of Directors or its committee.
Unless otherwise determined by our Board of Directors or its committee, awards granted under the Plan are not transferable other than by will or by the laws of descent and distribution.
The Plan provides that, except as set forth in an individual award agreement, upon the occurrence of a corporate transaction: (1) our Board of Directors or its committee shall notify each participant at least thirty (30) days prior to the consummation of the corporate transaction or as soon as may be practicable and (2) all options and stock appreciation rights shall terminate and all restricted stock shall be forfeited immediately prior to the consummation of such corporate transaction unless the committee determines otherwise in its sole discretion. A “corporate transaction” means (1) a liquidation or dissolution of the Company; (2) a merger or consolidation of the Company with or into another corporation or entity (other than a merger with a wholly-owned subsidiary); or (3) the sale of all or substantially all of the assets of the Company.
Our Board of Directors may alter, amend or terminate the plan in any respect at any time, but no alteration, amendment or termination will adversely affect in any material way any award previously granted under the Plan, without the written consent of the participant holding such award.
During the years ended December 31, 2017 and 2016, the Company did not issue any stock or options as it had no employees.
Stock Options Granted
On September 11, 2008, the Board of Directors approved the issuance of stock options in accordance with the Plan. The employee options had a cliff vesting schedule over a three year period that vested one third after one year of service and then 4.2% per month over the remaining twenty-four months. Options issued to non-employees for meeting performance-based goals, vest immediately. During second quarter of 2011, the Company ceases having any employees therefore per the terms of the 2008 Equity Incentive Stock Option Plan the Service Date Termination provision eliminated all outstanding stock options. As such, the Company does not have any outstanding stock options.
Dividends
The Company anticipates that all future earnings will be retained to finance future growth. The payment of dividends, if any, in the future to the Company’s common stockholders is within the discretion of the Board of Directors of the Company and will depend upon the Company’s earnings, its capital requirements and financial condition and other relevant factors. The Company has not paid a dividend on its common stock and does not anticipate paying any dividends on its common stock in the foreseeable future but instead intends to retain all earnings, if any, for use in the Company’s business operations
.
F-
28
NOTE 7. RELATED PARTIES
On May 2, 2017, the Company authorized and issued 206,250,000 shares of BCI’s Series A Convertible 12% Cumulative Preferred stock at a price of ($.001 par value) per share to The 2GP Group LLC an entity controlled by Geordan Pursglove, our sole director’s son. The Series A Convertible 12% Cumulative Preferred stock include a three times (3x) voting preference. Mr. Geordan Pursglove also has advanced the Company $46,275 to pay certain company related expenses.
Also, on May 2, 2017 George Pursglove’ debt was reduced by $262,453 through the issuance of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock of which 43,750,000 were transferred to Fiona Oakley and 1,556,632 shares of Common Stock which also were issued to Fiona Oakley subsequent to this reduction.
NOTE 8. INCOME TAXES
A reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows:
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Statutory U.S. federal rate
|
|
|
(34.00
|
)%
|
|
|
(34.00
|
)%
|
|
Permanent differences
|
|
|
-
|
|
|
|
-
|
|
|
Valuation allowance
|
|
|
34.00
|
%
|
|
|
34.00
|
%
|
|
Provision for income tax expense(benefit)
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following:
|
|
|
2017
|
|
|
2016
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
Net operating loss carry-forwards
|
|
$
|
12,598,246
|
|
|
$
|
13,719,682
|
|
|
Accrued expenses
|
|
|
3,728,073
|
|
|
|
3,775,868
|
|
|
Non-cash compensation
|
|
|
3,077,009
|
|
|
|
3,077,009
|
|
|
Derivative liabilities
|
|
|
-
|
|
|
|
975,378
|
|
|
Total deferred tax assets
|
|
$
|
19,403,328
|
|
|
$
|
21,547,937
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(19,403,328
|
)
|
|
|
(21,547,937
|
)
|
|
Net deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
At December 31, 2017, the Company had estimated U.S. federal net operating losses of approximately $37,054,000 for income tax purposes which will expire between 2026 and 2027. For financial reporting purposes, the entire amount of the net deferred tax assets has been offset by a valuation allowance due to uncertainty regarding the realization of the assets. The net change in the total valuation allowance for the year ended December 31, 2017 was a decrease of $2,144,609. The Company follows FASC 740-10-25 P which requires a company to evaluate whether a tax position taken by the company will “more likely than not” be sustained upon examination by the appropriate tax authority. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company believes that its income tax filing positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.
The Company may not be able to utilize the net operating loss carryforwards for its US income taxes in future periods should it experience a change in ownership as defined in Section 382 of the Internal Revenue Code (“IRC”). Under section 382, should the Company experience a more than 50% change in its ownership over a 3 year period, the Company would be limited based on a formula as defined in the IRC to the amount per year it could utilize in that year of the net operating loss carryforwards. As of December 31, 2017, the Company had not performed an analysis to determine if the Company was subject to the provisions of Section 382. The Company is subject to U.S. federal income tax including state and local jurisdictions. Currently, no federal or state income tax returns are under examination by the respective taxing jurisdictions.
F-
29
The Company's accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company has not accrued interest for any periods in which there are uncertain tax positions.
NOTE 9. COMMITMENTS AND CONTINGENCIES
Legal Matters
In 2008 the Company filed suit against its former co-founder, President, Chief Executive Officer George Pursglove for breach of confidentiality and non-compete while employed and also postemployment, breach of fiduciary duty and other matters, and the Company is seeking to enforce certain non-compete agreements. The former CEO subsequently counter-sued the Company for breach of contract, breach of implied covenant of good faith and fair dealing and other matters. The former CEO is seeking to be awarded $75,000 in cash plus at least 3.3 million shares of stock of the Company. On July 28, 2011, the Company received a jury verdict ordering and adjudging in Case Number 2:08-cv-00496-KJD-LRL where BOOMj.com was the Plaintiff and the former CEO was the Defendant & Counterclaimant, that a
judgment be entered in favor of the Defendant and Counterclaimant against the Plaintiff, BOOMj.com, in the amount of $20,775 for damages as to the claim for failure to pay wages, $3,000,000 for damages as to the conversion claim, and $3,000,000 for punitive damages. As of December 31, 2017, and 2016 the was $5,758,332 and $6,020,775, respectively outstanding for this matter,. The Company is accruing interest at an annual rate of 5.29% on the outstanding balance. The current balance of the accrued interest as of December 31, 2017 and 2016 was $2,044,912 and $1,726,632, respectively.
On May 2, 2017 the Pursglove debt was reduced by $262,453 through the issuance of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock and 1,556,632 shares of Common Stock reducing the balance to $5,758,322.
Operating Lease
Beyond Commerce currently leases virtual office space at 3773 Howard Hughes Parkway, Suite 500 Las Vegas, NV 89169 with plans to move the Company’s headquarters to West Palm Beach, FL. This space has a yearly rent of $120 which expires December 31, 2018. The move of the Company’s corporate headquarters to West Palm Beach will cut down on travel time and overall travel expense.
The move will help to facilitate and reduce the cost to maintain and develop the Company’s future business which is all located on the East Coast of the US. The Company has entered into a Letter of Intent (LOI) with Cushman & Wakefield pertaining to specific office space at the Esparante Corporate Center located in the financial district of West Palm Beach, FL.
Tax Lien
On February 17, 2010, the Internal Revenue Service placed a federal tax lien of $756,711 and an additional $161,150 on June 14, 2010, against all of the property and rights to the property of BOOMj.com for unpaid federal payroll withholding taxes for the year ended December 31, 2009. The current amount outstanding including penalty and interest is $1,607,163, which is also inclusive of amounts outstanding for state tax related claims of $63,725. The accrued interest on the balance sheet related to this liability is $530,000 and $ 450,000 as of December 31, 2017 and 2016, respectively.
NOTE 10. NET LOSS PER SHARE OF COMMON STOCK
The Company follows ASC 260-10, which requires presentation of basic and diluted Earnings per Share (“EPS”) on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying consolidated financial statements, basic net loss per share of common stock is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the year. Basic net loss per common share is based upon the weighted average number of common shares outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
F-
30
There are no stock options or warrants that are exercisable into shares of the Company’s common stock as these were all extinguished; and convertible debt that is convertible into 14,642,009,000 and 19,250,000 shares of the Company’s common stock are not included in the computation along with 250,000,000 and zero of the Company’s preferred stock for the year ended December 31, 2017 and 2016, respectively, as the income share is negligible.
The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the years ended December 31, 2017 and 2016:
|
|
|
Years ended December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Net income (loss)
|
$
|
3,298,340
|
|
|
$
|
7,787,739
|
|
|
Weighted average shares used for basic earnings per share
|
|
999,479,701
|
|
|
|
998,443,368
|
|
|
|
|
|
|
|
|
|
|
|
Incremental diluted shares
|
|
14,892,009,000
|
|
|
|
19,250,000,000
|
|
|
Weighted average shares used for diluted earnings per share
|
|
15,891,488,701
|
|
|
|
20,248,443,368
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.00
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
0.00
|
|
|
$
|
0.00
|
|
NOTE 11. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
The Company paid $0 and $0 for the years ended December 31, 2017 and 2016, respectively, for interest. The Company did not make any payments for income tax during the years ended December 31, 2017 and 2016. Other non cash financing included the Pursglove debt which was reduced by $262,453 through the issuance of 250,000,000 shares of Series A Convertible 12% Cumulative Preferred stock and 1,556,632 shares of Common Stock.
NOTE 12. SUBSEQUENT EVENTS
The Company has not been a reporting Company within the rules of the Securities and Exchange Commission (SEC) since May of 2011, and has attempted to solicit funding for the continuing operations or a potential sale. We currently plan to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation and, to a lesser extent that desires to employ our funds in its business. Our principal business objective for the next several months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The Company on March 5, 2018, entered into an agreement to retain Maxim Group, LLC ("Maxim") to provide strategic corporate planning, financial advisory and investment banking services. The Company will use Maxim to help plan for its global expansion, as well as accelerate product growth and innovation. Pursuant to its retention, Maxim among other activities, will assist the Company in its efforts to become a fully reporting company under Securities and Exchange Commission guidelines, and advise the Company with respect to its efforts to list on a national exchange. The Company issued 3,500,000 of restricted stock on March 12, 2018 as consulting fees for this transaction.
On March 5, 2018 the Company amended its articles of incorporation to increase the shares authorized to 1,010,000,000
On March 27, 2018 the Company entered into a $1,000,000 bridge loan agreement with Chicago Venture Partners this amount will be loaned to the Company based on certain milestones.
On March 28, 2018 the Company amended its articles of incorporation to increase the shares authorized to 1,050,000,000.
On March 28, 2018 the Company entered into a convertible promissory note and a security purchase agreement (SPA) dated March 28, 2018. The SPA was for a total of $1,000,000, consisting of seven tranches of funding, with the initial tranche consisting of $100,000 and each subsequent investor note equal to $150,000. The parties closed on the first tranche on March 28, 2018. There can be no assurance that the Company will receive any further tranches.
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On March 28, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated March 28, 2018 in the amount of $50,000. The lender was Iliad Research and Trading, L.P. The notes have a maturity of seventeen (17) months from issuance are due on August 28, 2019. have an interest rate of 10% per annum and are convertible at a price of $0.15 per share. If at the Company’s option decides to repay the loan with shares of its common stock the conversion price becomes 65% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. This Note is secured with 39,000,000 of the Company’s $0.001 par value common stock.
On April 16, 2018 the Company issued 700,000 shares of restricted common stock for legal services to be rendered in connection with the Maxim transaction.
While final closing has not yet occurred, the Company has signed a letter of intent to acquire certain entities.
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Item 14.
Changes in and Disagreements with Accountant on Accounting and Financial Disclosure
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None.
Item 15.
Financial Statements and Exhibits
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(a)
Financial Statements and Schedules
The consolidated financial statements required to be field as part of this registration statement are included in Item 13 hereof.
(b)
Exhibits
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Exhibit No.
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Description
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3.1
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Bylaws (incorporated herein by reference to Exhibit 3.3 to Form SB-2 filed with the Securities and Exchange Commission on January 22, 2007)
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3.2
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Articles of Incorporation (incorporated herein by reference to Exhibit 3.1 to Form SB-2 filed with the Securities and Exchange Commission on January 22, 2007)
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3.3
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*
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Articles of Merger filed with the Secretary of State of the State of Nevada on January 14, 2008
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3.4
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*
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Certificate of Amendment filed with the Secretary of State of the State of Nevada on January 5, 2009
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3.5
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*
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Certificate of Amendment filed with the Secretary of State of the State of Nevada on August 26, 2011
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3.6
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*
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Certificate of Designation of Series A Convertible Preferred Stock filed with the Secretary of State of the State of Nevada on July 27, 2017
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3.7
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*
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Certificate of Amendment filed with the Secretary of State of the State of Nevada on March 5, 2018
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3.8
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*
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Certificate of Amendment filed with the Secretary of State of the State of Nevada on March 28, 2018
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10.1
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*
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Employment Agreement by and between Beyond Commerce, Inc. and George Pursglove, dated June 1, 2017
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10.2
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*
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Letter of Intent, by and between Beyond Commerce, Inc. and Cushman & Wakefield, dated April 16, 2018
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10.3
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*
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Securities Purchase Agreement, by and between Beyond Commerce, Inc. and Iliad Research and Trading, L.P., dated March 28, 2018
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10.4
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*
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Form of Convertible Promissory Note, dated March 28, 2018
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10.5
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*
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Form of Warrant, dated March 28, 2018
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10.6
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*
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Stock Purchase Agreement, by and between Service 800, Inc. and Beyond Commerce, Inc., dated December 14, 2017
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*Filed herewith.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
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BEYOND COMMERCE, INC.
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Date: June 22, 2018
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By:
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/s/ George D. Pursglove
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George D. Pursglove,
President/CEO and sole Director
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ George D. Pursglove
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President and Chief Executive Officer/Director
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June 22, 2018
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George D. Pursglove
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44