Item 1. Business
Company’s History
Mojo Data Solutions Inc. (The Company) was incorporated on July 8, 2010 in the State of Nevada under the name of Authentic Teas, Inc. (“AUTT”). On September 16, 2013, the Company was re-domesticated in the Commonwealth of Puerto Rico by merging AUTT with Puerto Rico Corporation, “MOJO Data Solutions, Inc.”, which was formed on August 21, 2013 for the purpose of the re-domestication. Under the re-domestication, each outstanding share of AUTT common stock was automatically converted into one share of MOJO common stock. On October 11, 2013, the OTCBB symbol of the Company’s common stock was changed from AUTT to MJDS.
On September 27, 2013, the Company entered into an Asset Purchase Agreement with Mobile Data Systems, Inc. (“MDS”) pursuant to which MOJO agreed to purchase all of the intellectual property and substantially all of the tangible assets of MDS (the “MDS Asset Purchase”). On January 31, 2014, the Company closed on the MDS Asset Purchase in consideration of $190,000 in cash and a one-year unsecured 5% convertible promissory note in the principal amount of $80,000 payable to Joseph Spiteri, a sole officer and director which note is convertible at any time into shares of the Company’s common stock at $0.05 per share. The Cash Amount was utilized to repay and satisfy the outstanding indebtedness under a certain Loan Promissory Note dated September 19, 2011, by and between MDS, as the borrower, and the Long Island Development Corporation, a New York State not-for-profit corporation, as the lender.
Upon the closing of the acquisition with MDS, the business of MDS became the business of MOJO.
The Head Office of the Company is situated at 39 Dorado Beach East, Dorado, Puerto Rico 00646.
Company Overview
The Company develops smartphone applications that enable brands and consumers to interact with traditional media delivering digital content back to the handset. We embed proprietary visual and audible “tags” in products or print, TV and radio advertising. Consumers can use their smartphones to scan, touch or listen to the tags and interact with digital content, offers, and promotions to make immediate purchases and/or verify the authenticity of the product.
The Company focuses on retail, media and entertainment, and pharmaceutical verticals.
Through the proprietary and licensed intellectual property, the Company is engaged in developing technologies to deliver a fully integrated, multimedia mobile visual search, discovery, content delivery and consumer activation platform, combining a simple, elegant user experience on the handset, with sophisticated data processing and campaign management tools including its audio and digital watermarking technologies which enables the imperceptible transmission of data within audio signals, allowing the attachment of property rights or additional data to the customer of the audio material. Digital watermarks consist of indiscernible information that can be inserted into images, audio data or videos which can also be used to check the authenticity of copies by authorized persons and provide evidence whether the product was legally acquired or has been tampered with in some way.
The goal is to work closely with large brands and the advertising and marketing agencies to serve them to enhance traditional advertising and marketing campaigns. The Company intend to achieve this by creating exciting consumer experiences enabled through all forms of mobile tags and barcodes, including the simplest UPC symbols, to the most advanced image recognition and audio watermarking, using its Mojo Tags multimedia reader.
The Company intends for its technologies to interoperate seamlessly with existing, large-scale systems, including retail point-of-sale, customer relationship management, campaign management, digital loyalty, inventory, track-and-trace and mobile operating systems.
In addition to having mastered the integration of mobile tags and barcode solutions onto popular smartphone operating systems (iOS and Android), the goal is to specialize in helping its clients improve their financial performance by enabling practical and profitable business models and revenue streams.
Company Highlights
To date, the Company has achieved the following
·Developed the Mojo Campaign Management Suite encompassing several products, including Mojo Tags, Mojo Touch and Mojo Insights. The Mojo Campaign Management Suite with its carrier grade back-end can handle millions of simultaneous consumer transactions and provides brand protection for companies seeking anti-counterfeiting, diversion and track and trace capabilities.
·Developed the innovative FadeMark process. FadeMark is one of few covert brand protection methods that thwart counterfeiters’ duplication efforts.
Campaign Management Suite
The MOJO Campaign Management Suite offers a complete solution for managing campaigns, activating consumers and protecting a company’s brand. The Mojo Campaign Management Suite covers tag and barcode creation, campaign management, real-time decision making, marketing analytics, data integration, content delivery and consumer engagement.
The Company’s Campaign Management Suite includes Mojo Tags, Mojo Touch and Mojo Insights.
Mojo Tags
Mojo Tags connects the physical world to the digital world. Mojo Tags are used in print, images, audio and packaging to allow consumers using smartphones to connect with the digital content and experiences of brands. It could be a “Play Video” button for product information, “Buy Now” button that a company places on a product or a “Check In” button on a storefront window. Mojo Tags are buttons for the physical world, which enable customer interaction using any Apple iOS or Android phone or tablet. There are a variety of Mojo Tags that can be created, managed and tracked with the Mojo Campaign Management Suite for use in media, i.e., Visual Tags including QR Code and UPC, Audio Tags, Picture Tags, Invisible Tags, Secure Tags and NFC Tags.
Mojo Insights
Mojo Insights offers (to companies) innovative solutions for managing their mobile campaigns and connecting consumers to Internet content from traditional media. We deliver a fully integrated, multimedia mobile visual search and content delivery platform, combining a simple, elegant user experience on the handset, with sophisticated data processing and campaign management tools. The user friendly designed reports display everything a company needs to know about its campaigns with up-to-the-minute data and analytics.
In addition to time, place, and location-aware metrics, when the Mojo Tag App is used for scanning, additional demographic profile data is available including age, gender, geographic location, and income and language preference.
Mojo Tags App
The Mojo Tags app is now available on the iTunes App Store and Google Play. Scanning a tag is as simple as opening the Mojo Tags app and placing a tag within the sights or having the App listen to the audio track of any media.
How the Mojo Tags App works:
1.Consumer uses a smartphone to scan or listen to tags found in print, audio, pictures and packaging.
2.The Mojo Tags App decodes the tag and transmits the data from the smartphone, over the network to the content server.
3.The content server performs a lookup of decoded data and responds with the correlated URL or action, based on campaign parameters, device-provided contextual data e.g., location, place, time, profile, etc.
4.URL or action is received by consumer’s smartphone.
5.Smartphone launches web browser and presents designated content and experience.
The Mojo Tags app detects digital watermarks in print and audio and also reads QR Codes and UPC barcodes. The Mojo Tags app also does Image Recognition and BLE beacon detection. The Company’s proprietary FadeMark process makes it impossible for counterfeiters to successfully reproduce packaging, inserts or labels. FadeMarks cannot be counterfeited or replicated. The embedded FadeMark authenticates a product at every point in the supply chain. Counterfeit products are immediately exposed as frauds when scanned with a smartphone.
Technology
The MOJO Tags system consists of the following four proprietary integral pieces: (i) the Mobile Application(s) that resides on the mobile phone; (ii) the Content Server; (iii) the SQL Database; and (iv) the Campaign Manager.
Mobile Application. The Mobile Application reads the media presented (Audio, Video, Image, and Touch) and extracts the hidden data. The Application then submits this data along with demographic and location data to the MOJO Tags Content Server. The Application then processes the response from the Content Server and presents the digital content for the user to interact with.
Content Server. The Content Server processes the submitted code and, based on certain criteria, determines where to query a response from. The query can be directed to the MOJO Tags database or a third party customer database (i.e. Best Buy, Sears, etc.). Once a response is received, it is formatted and directed back to the Mobile Application that submitted the request.
SQL Database. The SQL Database is responsible for data processing and storage. The Content Server submits queries to the SQL Database by calling remote stored procedures. These stored procedures parse the data into its components parts. Demographic and location data are stored in the database and code payoff information is retrieved from the database. The database also receives remote procedure calls from the Campaign Manager in order to update code information or to report on code activity.
Campaign Manager. The Campaign Manager is the user interface into the data storage. It allows users to customize the response to a particular code in the system. The Campaign Manager also allows users to generate reports on code usage, generate analytics and manage campaigns on a daily basis.
Watermarking and Retrieval Software. The technology incorporates and works with a third party’s software. Pursuant to a license agreement, dated October 9, 2013, between Fraunhofer Geselleschaft zür Forderung der angerwandten Forschung e.V. (“FhG”), Europe’s largest application-oriented research organization ]based in Munich, Germany, for its Institute for Secured Information Technology and MDS which was assigned by MDS on the closing of the MDS Asset Purchase with the consent of FhG. We have the non-exclusive worldwide right to use FhG’s “Audio and Video Watermarking Software” and “Watermark Detector Software” (collectively, the “Software”) to watermark and retrieve media files by embedding binary codes in advertisements and television programs transmitted via broadcast and to retrieve such embedded codes from such advertisements and television programs with the help of a mobile phone or similar device. The term of the license agreement commenced on November 1, 2013 and it may be terminated upon six months’ notice, effective at the end of a calendar quarter. Our royalty payments to FhG are payable every six months and are based upon revenues derived from the Software, with a mandatory minimum royalty payment. Our technology works with the Software and although our license for the Software is non-exclusive, we hold the exclusive rights to use our technology and products which are derivative works of the Software.
All of our products are currently fully developed and working. We will continue to update our products to newer operating environments.
Sources and Availability of Raw Materials
Everything the Company needs to develop and improve its products is readily available.
Intellectual Property
The Company do not currently hold any registered patents, copyrights or trademarks. The Company currently own its website’s domain name www.mojotags.com. It has developed proprietary technologies around its multimedia reader for the Mojo Tags application. The multimedia reader is a one-of-a kind reader which the Company believes has no competition in the marketplace today. The Company intends to apply for specific patents around its proprietary intellectual property and trade secrets supporting the reader and the campaign management platform.
The Company relies on trade secret protection and confidentiality agreements to protect proprietary market, business and technical information and know-how that is not or may not be patentable or that it elects not to be patent. However, confidential information and trade secrets can be difficult to protect. Moreover, the information embodied in the Company’s trade secrets and confidential information may be independently and legitimately developed or discovered by third parties without any improper use of or reference to information or trade secrets. The Company seek to protect the market, technical and business information supporting its operations, as well as the confidential information relating specifically to its products by entering into confidentiality agreements with parties to whom the Company needs to disclose its confidential information to, such as its employees, consultants, board members, contractors and investors. However, the Company cannot be certain that such agreements have been entered into with all relevant parties. The Company also seeks to preserve the integrity and confidentiality of its data and trade secrets by maintaining physical security of its premises and physical and electronic security of its information technology systems, but it is possible that these security measures could be breached. While the Company has confidence in these individuals, organizations and systems, agreements or security measures may be breached, and the Company may not have adequate remedies for those breaches. The confidential information and trade secrets thus may become known by its competitors in ways the Company cannot prove or remedy.
The Company expect all of its employees and consultants to assign their inventions to the Company, and all of its employees, consultants, advisors and any third parties who have access to the Company’s proprietary know-how, information or technology to enter into confidentiality agreements, however, the Company cannot provide any assurances that all such agreements have been duly executed.
The Company cannot guarantee that its trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to the Company’s trade secrets or independently develop substantially equivalent information and techniques. For example, any of these parties may breach their agreements and disclose the Company’s proprietary information, including its trade secrets, and the Company may not be able to obtain recourse for such breaches. Misappropriation or unauthorized disclosure of the Company’s trade secrets could impair its competitive position and may have a material adverse effect on its business. Additionally, if the steps taken to maintain the Company’s trade secrets are deemed inadequate, it may have insufficient recourse against the parties misappropriating those trade secrets.
Marketing and Distribution
Principal Markets
The goal of the Company is to establish relationships and work closely with large brands and the advertising and marketing agencies who serve them to enhance traditional advertising and marketing campaigns. The Company intend to achieve this by creating exciting consumer experiences enabled through all forms of mobile tags and barcodes, including the simplest UPC symbols, to the most advanced image recognition and audio watermarking, using its Mojo Tags multimedia reader. The Company does not currently has any contractual arrangements with any such brands and/or agencies.
The Company intends for its technologies to interoperate seamlessly with existing, large-scale systems, including retail point-of-sale, customer relationship management, campaign management, digital loyalty, inventory, track-and-trace and mobile operating systems.
In addition to having mastered the integration of mobile tag and barcode solutions, the goal is to specialize in helping our clients improve their financial performance by enabling practical and profitable business models and revenue streams. The Company do not currently have any customer agreement.
Dependence on Specific Customer or Customers
The business of the Company is not currently dependent on specific customers, the loss of any one or more of which would have a material adverse effect on its business.
Industry and Competition
The Company operates in a highly competitive, consumer-driven and rapidly changing environment. The success of the Company is, to a large extent, dependent on its ability to acquire, develop, adopt, upgrade and exploit new and existing technologies to address consumers’ changing demands and distinguish its services from its competitors, most of which have greater resources than the Company and have a longer operating history. The Company may not be able to accurately predict technological trends or the success of new products and services. If the Company chooses technologies or equipment that are not as effective, cost-efficient or attractive to its customers than those chosen by its competitors, or if it offer services that fail to appeal to consumers, are not available at competitive prices or that do not function as expected, the competitive position of the Company could deteriorate, and its business, financial condition and results of operation could suffer.
The Company’s competitive position will be adversely affected by the introduction of new technologies, products and services by its competitors. Furthermore, advances in technology, decreases in the cost of existing technologies or changes in competitors’ product and service offerings may require the Company in the future to make additional research and development expenditures or to offer at no additional cost or at lower prices, certain products and services that the Company currently offer to customers separately or at a premium. In addition, the uncertainty of the Company’s ability and the costs to obtain intellectual property rights from third parties could impact its ability to respond to technological advances in a timely and effective manner.
Technology in the Company’s industry changes rapidly which could cause its products and services to become obsolete. The Company may not be able to keep pace with technological developments. If the new technologies on which the Company intends to focus its research and development investments fail to achieve acceptance in the marketplace, the competitive position of the Company could be negatively impacted limiting or even preventing the Company from becoming profitable. The Company may also be at a competitive disadvantage in developing and introducing complex new products and services due to the substantial costs that the Company may incur in producing these products or services, For example, its competitors could use proprietary technologies that are perceived by the market as being superior. Further, after the Company has incurred substantial costs, one or more of the products or services the Company or its strategic partners are developing could become obsolete prior to it being widely adopted.
The Company expects to continue to face increased threats from companies who use the Internet to deliver services similar to the Company’s as the speed and quality of broadband and wireless networks continues to improve. The industry is subject to rapid technological change, and the Company must make substantial investments in new products, services and technologies to compete successfully. Technological innovations generally require a substantial investment before they are commercially viable. The Company intends, subject to financing, to continue to make substantial investments in developing new products and technologies, and it is possible that the development efforts of the Company will not be successful and that the Company’s new technologies will not result in meaningful revenues.
The Company’s products, services and technologies face significant competition, and any revenues generated or the timing of their deployment, which may be dependent on the actions of others, may not meet its expectations. Competition in the communications industry is affected by various factors that include, among others: evolving industry standards and business models; evolving methods of transmission for voice and data communications; networking; value-added features that drive replacement rates and selling prices; turnkey, integrated product offerings that incorporate hardware, software, user interface and applications; and scalability and the ability of the system technology to meet customers’ immediate and future network requirements.
The Company intends that advertising will produce the predominant share of its revenues, if any. With the continued development of alternative forms of media, particularly electronic media including those based on the Internet, the businesses may face increased competition. Alternative media sources may also affect the Company’s ability to generate revenues. This competition may make it difficult for the Company to grow or generate revenues, which the Company believes will challenge it to expand the contributions of its business.
Item 1A.
Item 1A. Risk Factors
The information to be reported under this Item is not required of smaller reporting companies. However, there have been no material changes from the risk factors previously disclosed in our Report on Form 8-K for the fiscal year ended December 31, 2013, filed with the SEC on October 29, 2014.
Item 1B.
Item 1B. Unresolved Staff Comments
Not Applicable
Item 2.
Item 2. Properties
The principal place of business of the Company is situated at 39 Dorado Beach East, Dorado, Puerto Rico, 00646 and is provided by Joseph Spiteri, our CEO at a monthly rent of $ 2,500.
Item 3.
Item 3. Legal Proceedings
The Company is not presently a party to any litigation nor, to our knowledge, is any litigation threatened against it, which may materially affect its business or its assets.
Item 4.
Item 4. Mine Safety Disclosures
Not Applicable
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Currently, the Common Stock of the Company is quoted in the OTC Markets Pink Sheets under the Symbol MJDS. The reported high and low sales prices for its common stock as reported thereon are shown below for the periods indicated. The quotations reflect inter-dealer prices without retail mark-up, markdown or commission and may not represent actual transactions.
Dividends and Dividend Policy
The Company has never paid dividends on its Common Stock and its present policy is to retain anticipated future earnings for use in its business.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None
Securities Authorized for Issuance under Equity Compensation Plans
None
Recent Sales of Unregistered Securities
In 2014, the Company sold 2,323,260 units of its securities at $0.25 per unit (the "Units") each Unit consisting of one (1) share of common stock and one (1) common stock purchase warrant exercisable for a period of five (5) years at $0.50 per share in an offering pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended (the "Securities Act") to accredited investors.
In 2014, the Company also issued 85,000 shares of its common stock to two (2) individuals for services e pursuant to Section 4(a)(2) of the Securities Act.
All transactions were completed under Section 4(a)(2) of the Securities Act as they were not in connection with any public offering, and the investors were believed to be accredited and financially sophisticated.
Item 6.
Item 6. Selected Financial Data
The information to be reported under this item is not required of smaller reporting companies.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Forward Looking Statements
The following discussion and analysis of the consolidated financial condition and consolidated results of operations of the Company is for the years ended December 31, 2015 and 2014 and should be read in conjunction with the consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this report. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as the Company's plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. The Company uses words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. As used in this report, the terms "MOJO," the "Company," "we," "us," "our," and similar terms mean MOJO Data Solutions, Inc., a Puerto Rico corporation.
Company Overview
Since the consummation of the Asset Purchase Agreement on January 31, 2014, the Company's has been refocusing its business plan and strategy to develop and monetize the intellectual property assets it purchased from MDS. Preceding the transaction, the Company served as a holding company for its predecessor's wholly-owned subsidiary, Authentic Teas Inc., a corporation incorporated in the province of Ontario, Canada on July 8, 2010 (“AUTT Canada”). AUTT Canada historically sold herbal teas online. The Company intends to sell the business of AUTT Canada in the near future.
MOJO develops smart-phone applications that enable brands and consumers to interact with media delivering digital content back to the handset. The Company focuses on retail, entertainment and pharmaceutical verticals.
Through the proprietary and licensed intellectual property, the Company is engaged in developing technologies to deliver a fully integrated, multimedia mobile visual search, discovery, content delivery and consumer activation platform, combining a simple, elegant user experience on the handset, with sophisticated data processing and campaign management tools including its audio and digital watermarking technologies which enables the imperceptible transmission of data within audio signals, allowing the attachment of property rights or additional data to the customer of the audio material. Digital watermarks consist of indiscernible information that can be inserted into images, audio data or videos which can also be used to check the authenticity of copies by authorized persons and provide evidence whether the product was legally acquired or has been tampered with in some way.
The goal is to work closely with large brands and the advertising and marketing agencies to serve them to enhance traditional advertising and marketing campaigns. The Company intend to achieve this by creating exciting consumer experiences enabled through all forms of mobile tags and barcodes, including the simplest UPC symbols, to the most advanced image recognition and audio watermarking, using its Mojo Tags multimedia reader.
The Company intends for its technologies to interoperate seamlessly with existing, large-scale systems, including retail point-of-sale, customer relationship management, campaign management, digital loyalty, inventory, track-and-trace and mobile operating systems.
In addition to having mastered the integration of mobile tag and barcode solutions, our goal is to specialize in helping our clients improve their financial performance by enabling practical and profitable business models and revenue streams.
Consolidated Results of Operations
Year ended December 31, 2018 compared to the year ended December 31, 2017
During the year ended December 31, 2018, the Company generated revenues of $0.
During the year ended December 31, 2018, the Company had general and administrative expenses of $0 compared to $0 during the year ended December 31, 2017. The majority of expenses for the year ended December 31, 2018 were for professional fees related to the regulatory filings in connection with the consummation of the Asset Purchase Agreement.
Liquidity and Capital Resources
The Company’s working capital as of December 31, 2018 and 2017 is summarized as follows:
The Company’s cash flow for the years ended December 31, 2018 and 2017 is summarized as follows:
The Company anticipates that its cash on hand and the revenue that it anticipates generating going forward from its operations will not be sufficient to satisfy all of its cash requirements for the next twelve month period. The Company requires funds to enable it to address its minimum current and ongoing expenses as presently, the Company is not generating revenue to meet its operating and capital expenses. The Company currently does not has committed sources of additional financing and may not be able to obtain additional financing. To acquire additional financing, the Company plans to raise any such additional capital primarily through equity and debt financing, provided that such funding is available to it. The issuance of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders. There is no assurance that the Company will be able to obtain further funds required for its continued operations or that additional financing will be available to it when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain additional financing as required on a timely basis, it will not be able to meet certain obligations as they become due and it will be forced to scale down or perhaps even cease its operations.
Off Balance Sheet Arrangements:
The Company does not has any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The information to be reported under this item is not required of smaller reporting companies.
Item 8.
Item 8. Financial Statements and Supplementary Data
The Company’s financial statements are contained in the pages beginning, which appear at the end of this annual report.
Item 9.
Item 9. Changes In, and Disagreements with Accountants on Accounting and Financial Disclosure
None
Item 9A.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
The Company carried out an evaluation, under the supervision and with the participation of its Chief Executive Officer ("CEO"), who is also its Principal Financial Officer ("PFO"), of the design and effectiveness of the Company’s "disclosure controls and procedures" (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, the CEO/PFO concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective. The conclusion that the disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in disclosure controls and procedures which are indicative of many small companies with small staff:
(i)inadequate segregation of duties and effective risk assessment as the Company had only one officer;
(ii)insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC Guidelines; and
(iii)inadequate security and restricted access to computer systems including insufficient disaster recovery plans; and
(iv)no written whistleblower policy.
Once sufficient funds are available, the CEO/PFO plans to implement appropriate disclosure controls and procedures to remediate these material weaknesses, including:
(i)appointing additional qualified personnel to address inadequate segregation of duties and ineffective risk management;
(ii)adopt sufficient written policies and procedures for accounting and financial reporting and a whistle blower policy; and
(iii)implement sufficient security and restricted access measures regarding our computer systems and implement a disaster recovery plan.
(b) Management’s Annual Report on Internal Control over Financial Reporting
The CEO/PFO is responsible for establishing and maintaining adequate internal control over financial reporting as defined under Rule 13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934. As of December 31, 2014 our CEO/PFO assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control set forth in the 1992 report entitled "Internal Control - Integrated Framework" published by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission. Based on that evaluation, our CEO/PFO concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of the Company’s internal control over financial reporting that adversely affected its internal controls.
The matters involving internal controls and procedures that the Company’s CEO/PFO considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were:
(a)lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
(b)inadequate segregation of duties consistent with control objectives;
(c)insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and
(d)ineffective controls over period end financial disclosure and reporting processes.
The aforementioned material weaknesses were identified by the Company's CEO/PFO in connection with his review of the Company’s financial statements as at the end of reporting period.
The CEO/PFO believes that the material weaknesses set forth above did not have an effect on the Company's financial results. However, the CEO/PFO believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, results in ineffective oversight of the establishment and monitoring of required internal controls and procedures.
The Company will continue to monitor and evaluate the effectiveness of its internal controls and procedures and its internal controls over financial reporting on an ongoing basis and are committed to taking action and implementing additional enhancements or improvements as funds allow.
There have been no significant changes in the Company’s internal controls over financial reporting that occurred during the current reporting period that have materially affected or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Item 9B.
Item 9B. Other Information
None
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Goverence
The directors hold office until the next annual meeting of stockholders and until their successors are elected and qualified. Any director may resign his or her office at any time and may be removed at any time by the holders of a majority of the shares then entitled to vote. The Board of Directors appoints the executive officers, and the executive officers serve at the pleasure of the Company’s Board of Directors.
The directors and executive officers, their ages, positions held, and duration of such are as follows:
Name
Age
Title
Director Since:
Joseph Spiteri
Chief Executive Officer, President,
Secretary & Treasurer, Chairman
of the Board of Directors (Principal Executive Officer)
August 23, 2013
Professional Experience: The business experience of our officers and directors is set forth below:
Joseph Spiteri is a software executive with over thirty years of experience in software architecture, engineering, research, and management. He has specialized in the areas of wireless data communications, mobile computing, and multi-tier distributed computing architectures. Mr. Spiteri leads the design, development, and implementation of mobile enterprise applications and custom OEM contract software development.
Mr. Spiteri founded InVision Software in 1995 after a long career as an electrical engineer in the defense electronics industry. In 2004, he founded Mobile Data Systems, a privately-held New York corporation where he served as President, Chief Executive Officer and board member prior to the sale of its assets to the Company, In addition to Mr. Spiteri, Ralph M. Amato, age 62, was appointed to serve as a director of the Company pursuant to a consulting agreement, dated as of August 24, 2013 between the Company and Ventana Capital Partners, LLC (“Ventana”). The Company determined that Ventana failed to perform in accordance with the terms of that agreement which triggered the termination of the Ventana consulting agreement and the voluntary resignation of Mr. Amato, the appointed board designee of Ventana, from its Board of Directors.
Legal Proceedings
During the past ten years, Mr. Spiteri, our sole director or executive officer has not been:
·The subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·Convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·Subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.
·Found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, that has not been reversed, suspended, or vacated.
·Subject of, or a party to, any order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of a federal or state securities or commodities law or regulation, law or regulation respecting financial institutions or insurance companies, law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
·subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
None of the Company’s directors or officers or, to its knowledge, any affiliates or any beneficial owner of 5% or more of our common stock, or any associate of such persons, is an adverse party in any material proceeding to, or has a material interest adverse to, us or any of our subsidiaries.
Corporate Governance
The Company currently have no standing audit, compensation or nominating committees or committees performing similar functions, nor has it written audit, compensation or nominating committee charters. The Board of Directors believes it unnecessary to have such committees at this time because they can adequately perform the functions of such committees.
The Company do not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The Board of Directors believes that, given the stage of the Company’s development, a specific nominating policy would be premature until the business operations develop to a more advanced level. The Company currently do not have any specific or minimum criteria for the election of nominees to the Board of Directors and it does not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment. A shareholder who wishes to communicate with the Board of Directors may do so by directing a written request addressed to the director at the address on the cover of this report.
Code of Ethics
The Company has not yet adopted a code of ethics within the definition of Item 406 of Regulation S-K.
Currently, the Company has a single named executive officer, 3 employees, as well as a few part-time employees and additional consultants. As the Company’s business continues to grow, and the Company become more experienced as a fully-reporting public company, its Board of Directors plans to implement a code of ethics.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company is currently not subject to Section 16(a) of the Exchange Act as the Company do not have a class of equity securities registered pursuant to section 12 of the Exchange Act.
Item 11.
Item 11. Executive Compensation
As a “smaller reporting company”, the Company have elected to follow the scaled disclosure requirements for smaller reporting companies with respect to the disclosures required by Item 402 of Regulation S-K. Under such scaled disclosure, the Company is not required to provide a Compensation, Discussion and Analysis, Compensation Committee Report and certain other tabular and narrative disclosures relating to executive compensation.
Executive Compensation
The following table sets forth information concerning the compensation of our principal executive officer for the current reporting period is as follows:
Summary Compensation Table
Name and Principal Position
Year
Salary
($)
All Other Compensation
($)
Total($)
Daniel Sobolewski
-
-
-
President, Chief Executive Officer and Director
No accrued compensation is due to any executive officer or director of the Company. Each executive officer and director will be entitled to reimbursement of expenses incurred while conducting Company business.
The former executive officers of our predecessor parent company, AUTT, did not receive any compensation during the current fiscal year nor was any compensation accrued.
Employment Agreements or Arrangements
We have not entered into any employment agreements or arrangements, whether written or unwritten, with our directors or executive officers since our inception. See “Certain Relationships and Related Transactions; and Director Independence; Consulting Agreement” on page 16 of this Memorandum.
Equity Awards
On October 3, 2013, the Company issued the following shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), and Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) and collectively with the Common Stock and the Series A Preferred Stock, the “Securities”), to the Company’s officers and directors. The securities were issued to each individual pursuant to a Stock Purchase Agreement, dated September 20, 2013, between the Company and each individual in consideration for services rendered and valued at $0.001 per share. The Company relied upon the exemption from the registration requirements of the Securities Act of 1933 available to the Company pursuant to Section 4(a) (2) (formerly Section 4(2)) promulgated under the Securities Act due to the fact that the individuals were officers and directors of the Company and the issuances did not involve a public offering of securities. The Securities are deemed to be “restricted securities” and “control securities” pursuant to Rule 144 promulgated under the Securities Act, and certificates evidencing the Securities bear the customary restrictive legends.
Joseph Spiteri (Chief Executive Officer, Chairman, President, Secretary and Treasurer)
·3,000,000 shares of Common Stock
·8,000,000 shares of Series A Preferred Stock which shares automatically converted into a like number of Common Stock on January 1, 2016.
·15,000,000 shares of Series B Preferred Stock which are to be released upon the Company’s achievement of certain financial milestones as set forth in the Stock Purchase Agreement between the Company and Mr. Spiteri. The first milestone pursuant to which 7,500,000 of such shares were to be released passed without reaching the milestone and those shares are deemed to be cancelled and no longer issued and outstanding.
Nicholas P. DeVito (Former Chief Operating Officer)
·1,500,000 shares of Common Stock.
Ralph M. Amato (Former Director)
·5,750,000 shares of Series B Preferred Stock, as set forth in the Stock Purchase Agreement between the Company and RDA Equities, LLC, an entity of which Mr. Amato has voting and dispositive control. The issuance of these shares was dependent upon satisfaction of certain conditions which were not satisfied and, accordingly, the shares are deemed cancelled and no longer issued or outstanding.
Other than the foregoing, the Company have not awarded any shares of stock, options or other equity securities to its directors or executive officers since its inception. The Company have not adopted any equity incentive plan. The directors and executive officers may receive stock options at the discretion of its Board of Directors in the future.
Director Compensation
Other than equity compensation set forth above, no director received or accrued any compensation for his services as a director since our inception.
The Company have no formal plan for compensating its directors for their services in their capacity as directors. Our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors.
The Board of Directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership
The following table sets forth, as of March 31, 2016, certain information known to the Company with respect to the beneficial ownership of its common stock, Series A Preferred Stock and Series B Preferred Stock by:
(i)each of its directors,
(ii)each of the named executive officers and current executive officers,
(iii)all of the directors and current executive officers as a group, and
(iv)each shareholder known by us to be the beneficial owner of more than five percent (5%) of such class of securities. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
Common Stock
Notes
(1) Unless otherwise noted, the address for each beneficial holder is c/o MOJO Data Solutions, Inc., 39 Dorado Beach East, Dorado, Puerto Rico 00646.
(2) Based on 16,745,800 shares of common stock issued and outstanding as of March 31, 2016. Shares of common stock subject to options, warrants and convertible securities currently exercisable or convertible, or exercisable or convertible within 60 days, would be counted as outstanding for computing the percentage of the person holding such options, warrants or convertible securities but not counted as outstanding for computing the percentage of any other person.
(3) Includes 8,000,000 shares of Common Stock issued upon the automatic conversion of the Series A Preferred Stock on January 1, 2016 and 1,600,000 shares that are issuable upon the conversion of an $80,000 outstanding convertible note.
(4) Excludes 7,500,000 shares of common stock issuable upon the conversion of the Series B Preferred Stock.
(5) Held indirectly through RDA Equities, LLC (5,803,260 shares) and Prospect Financial, LLC (1,210,070 shares) in which Mr. Amato has voting and dispositive control.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions
Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, dated September 27, 2013, between the Company and MDS, the Company agreed to purchase all of the intellectual property and substantially all of the tangible assets of MDS, constituting substantially all of the assets of MDS, in consideration for $190,000 and an unsecured promissory note for the principal amount of $80,000, bearing interest at a rate of 5% per year, maturing on the first anniversary date of the date of issuance and convertible by the holder thereof at any time and from time to time into shares of Common Stock of the Company for $0.05 per share. The shares of Common Stock of the Company issuable upon the conversion of the Promissory Note will not be registered under the Securities Act and will be deemed to be restricted pursuant to Rule 144 promulgated under the Securities Act. Joseph Spiteri, MOJO’s President, Chairman, Chief Executive Officer, Treasurer and Secretary, is also the President and Chief Executive Officer of MDS.
Consulting Agreement. Pursuant to a Consulting Agreement, dated April 24, 2013, between MDS and Ventana Capital Partners, LLC, a Puerto Rico limited liability company of which Ralph M. Amato, a director and significant beneficial owner of common stock of the Company, has voting and dispositive control (“Ventana”), the Company had retained Ventana to provide it with certain services. In consideration for the services rendered by Ventana, the Company had agreed to issue to RDA Equities, LLC, a Puerto Rico limited liability company and affiliate of Ventana, up to 5,750,000 shares of Series B Preferred Stock upon the consummation of certain financial milestones. The term of the Consulting Agreement was to terminate on April 24, 2016, and was terminated prior thereto pursuant to early termination provisions in the agreement in certain circumstances. Accordingly, the Company is no longer obligated to provide such shares or board seat.
Other than as disclosed above, there has been no transaction, since the beginning of the year Current reporting period, or currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of our total assets at year-end for the last completed fiscal year, and in which any of the following persons had or will have a direct or indirect material interest:
(i)Any director or executive officer of our company
(ii)Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
(iii)Any of our promoters and control persons; and
(iv)Any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.
As at the end of current reporting period, there were warrants outstanding to purchase 2,323,260 shares of our common stock at $0.50 per share.
Item 14.
Item 14. Principal Accounting Fees and Services
The Board of Directors has selected Malone Bailey, LLP ("Malone Bailey") as the independent registered public accounting firm to audit the books and accounts for the current fiscal year. Malone Bailey has served as our independent accountant since 2013. The aggregate fees billed, or expected to be billed, for the last two fiscal years, for professional services rendered by Malone Bailey were $ 0.
"Audit fees" are fees billed for services provided related to the audit of the Company’s annual financial statements, quarterly reviews of the interim financial statements, and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for those fiscal periods.
"Tax fees" are fees billed, or to be billed, by the independent accountant for professional services rendered for tax compliance, tax advice and tax planning.
The Board of Directors pre-approves all services provided by the Company’s independent accountants. The Board of Directors reviewed and approved all of the above services and fees.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of or are included in this Annual Report:
1.Financial statements listed in the Index to Financial Statements, filed as part of this Annual Report beginning on page; and
2.Exhibits listed in the Exhibit Index filed as part of this Annual Report.
MOJO DATA SOLUTIONS
Financial Statements
For The Years Ended
December 31, 2018 and 2017
Mojo Data Solutions, Inc.
Consolidated Balance Sheets
December 31,
See accompanying notes to the consolidated financial statements
Mojo Data Solutions, Inc
Consolidated Statements of Operations
For The Year Ended December 31,
See accompanying notes to the consolidated financial statements
Mojo Data Solutions, Inc.
Consolidated Statement of Changes in Stockholders’ Deficit
For The Years Ended December 31, 2018 and 2017
See accompanying notes to the consolidated financial statements
Mojo Data Solutions, Inc.
Consolidated Statements of Cash Flows
For The Years Ended December 31,
See accompanying notes to the consolidated financial statements
MOJO DATA SOLUTIONS, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 2018
1. LEGAL STATUS AND OPERATIONS
Mojo Data Solutions, Inc. (the “Company” or “Mojo”) was founded in Nevada on July 8, 2010 as Authentic Teas, Inc. (“Authentic”). Authentic’s wholly-owned subsidiary was incorporated in the province of Ontario, Canada on July 8, 2010. On September 13, 2013, Authentic Teas, Inc., a Nevada corporation, merged with and into Mojo Data Solutions, Inc., a Puerto Rico corporation and a wholly-owned subsidiary of Authentic formed on August 21, 2013 solely for the purpose of reincorporating Authentic in Puerto Rico under the name Mojo Data Solutions, Inc. (the “Reincorporation”).
The company is primarily engaged in the development of smartphone applications which enables consumers to interact with traditional media delivering digital content back to the handset.
The head office of the Company is situated 39 Dorado Beach East, Dorado, Puerto Rico, 00646.
2. BASIS OF PREPARATION
Statement of compliance
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") on a going concern.
Accounting Convention
These financial statements have been prepared on the basis of 'historical cost convention using accrual basis of accounting except as otherwise stated in the respective accounting policies notes.
Going concern
The accompanying unaudited financial statements have been prepared on the assumption that the Company will continue as a going concern. The Company historically has experienced significant losses and negative cash flows from operations. Further, the Company does not have a revolving credit facility with any financial institution. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent on raising additional capital, negotiating adequate financing arrangements and on achieving sufficiently profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with the approved accounting standards require management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of the revision and future periods.
The areas involving higher degree of judgment and complexity, or areas where assumptions and estimates made by the management are significant to the financial statements are as follows:
i) Equipment - estimated useful life of equipment (note - 3.8)
ii) Provision for doubtful debts (note - 3.4)
iii) Provision for income tax (note - 3.1)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income tax
The tax expense for the year comprises of income tax, and is recognized in the statement of earnings. The income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred income tax liabilities are recognised for all taxable temporary differences and deferred income tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and unused tax losses can be utilized. Deferred income tax is calculated at the rates that are expected to apply to the period when the differences are expected to be reversed.
Trade and other payables
Liabilities for trade and other amounts payable are carried at cost, which is the fair value of the consideration to be paid in future for goods and services received, whether or not billed to the Company.
Provisions
A provision is recognized in the financial statements when the Company has a legal or constructive obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.
Accounts Receivable
Accounts receivable are non-interest bearing obligations due under normal course of business. The management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to be uncollectible in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company believes its allowance for doubtful accounts as of period ended is adequate.
Contingent liabilities
A contingent liability is disclosed when the Company has a possible obligation as a result of past events, the existence of which will be confirmed only by the occurrence or non-occurrence, of one or more uncertain future events, not wholly within the control of the Company; or when the Company has a present legal or constructive obligation, that arises from past events, but it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability.
Financial liabilities
Financial liabilities are recognized when the Company becomes party to the contractual provision of the instruments and the Company loses control of the contractual right that comprise the financial liability when the obligation specified in the contract is discharged, cancelled or expired. The Company classifies its financial liabilities in two categories: at fair value through profit or loss and financial liabilities measured at amortized cost. The classification depends on the purpose for which the financial liabilities were incurred. Management determines the classification of its financial liabilities at initial recognition.
(a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are financial liabilities held for trading. A financial liability is classified in this category if incurred principally for the purpose of trading or payment in the short-term. Derivatives (if any) are also categorized as held for trading unless they are designated as hedges.
(b) Financial liabilities measured at amortized cost
These are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market. These are recognized initially at fair value, net of transaction costs incurred and are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the profit and loss account.
Property, plant and equipment
All equipment is stated at cost less accumulated depreciation and impairment loss. The cost of fixed assets includes its purchase price, import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use.
Depreciation on additions to property, plant and equipment is charged, using straight line method, on pro rata basis from the month in which the relevant asset is acquired or capitalized, up to the month in which the asset is disposed of. Impairment loss, if any, or its reversal, is also charged to income for the year. Where an impairment loss is recognized, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less its residual value, over its estimated useful life.
Maintenance and normal repair costs are expensed out as and when incurred. Major renewals and improvements are capitalized and assets so replaced, if any are retired.
Gains and losses on disposal of fixed assets, if any, are recognized in statement of profit and loss.
Category Depreciation terms
Computer and equipment 5 years
Furniture and fixtures 7 years
Software 3 years
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with banks. For the purpose of the statement of cash flows, cash and cash equivalents bank balances and short term highly liquid investments subject to an insignificant risk of changes in value and with maturities of less than three months.
Revenue recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable for goods sold or services rendered, net of discounts and sales tax and is recognised when significant risks and rewards are transferred.
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates. The financial statements are presented in US (Dollars) which is the Company's presentation currency. All financial information presented in US Dollars has been rounded to the nearest dollar unless otherwise stated.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency using the exchange rate prevailing at the statement of financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates are recognized in the profit and loss account.
Contingencies
The assessment of the contingencies inherently involves the exercise of significant judgment as the outcome of the future events cannot be predicted with certainty. The Company, based on the availability of the latest information, estimates the value of contingent assets and liabilities, which may differ on the occurrence / non-occurrence of the uncertain future event(s).
Cash
This represent cash in hand and cash deposited in bank accounts (current) by the Company.
Accounts Receivables
Inventory
Prepaid expenses
Property, plant and equipment
Accounts payable and accrued expenses
Convertible notes - net of discount
On May 16, 2014, the Company issued a $50,000 convertible note bearing interest at 5% per year with a maturity date of May 15, 2018. The note is convertible at $0.25 per share. At December 31, 2017, there was $57,699 outstanding on this note.
Loans payable
Revenue
Operating expenses
Contingencies and Commitments
From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As at the end of current reporting period, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations and there are no proceedings in which any directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to the Company’s interest.
Common Stock
On January 31, 2014, the Company issued 200,000 shares of its common stock and 200,000 warrants with an exercise price of $0.50 and a life of three years for consulting services for a fair value totaling $46,000 and $45,940, respectively. The warrants have been valued using the Black-Scholes model with the following assumptions; term of 3 years, volatility of 383%, risk-free interest rate of 0.69% and dividend yield of 0%. The expected warrant term is based on the remaining contractual term. The expected volatility is based on the historical volatility of the prior companies. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related warrant at the valuation date. Dividend yield is based on historical trends.
Preference Stock
The Company issued 25,000,000 class - B preference shares during the period on which lien is marked for cars and yacht.
Item 16. Exhibits.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.