On March 10, 2016,Ashish Badjatia is the Company's BoardChief Operating and Financial Officer, Secretary and Director. In this role, he is responsible for the day-to-day management of Directors appointed Jim Kilesour Company, administrative functions, corporate filings and strategic evolution of its business. Ashish was the founder & CEO of the India Ecommerce Company (IEEC- merged with YSTR in 2016) which developed internet software businesses focused on integrated commerce opportunities between India and Indian communities in the US. He brings a stellar record of developing and managing small public companies and 20 years of experience in various related activities, including social networking, international trade, global investment banking, outsourcing, proposal management, and entrepreneurship. Included in those activities is a stint as investment banking executive with Morgan Stanley in India. Ashish holds a Bachelor of Business Administration from the new Chief Executive Officer,Williamson School of Management at Youngstown State University, and a Master of International Affairs (International Business & Finance and South Asian Affairs) from the School of International and Public Affairs at Columbia University.
Paul Overby to is the newly formedCompany's Chief Strategy Officer position. Both Mr. Kiles and Mr. Overby will also serve onDirector. In this role, he provides strategic guidance to the BoardCompany. In addition, Paul serves as the Honorary Consul of Directors for the Company, with Mr. Kiles assuming the roleFederal Republic of Germany in Pittsburgh and as President and Chairman of the Board of Directors.the Pittsburgh Chapter of the German American Chamber of Commerce. He is also a strategist for Wabtec Corporation. A former U.S. diplomat in the Middle East and executive in Bombardier's rail business, he is a start-up founder and early-stage investor. Paul holds a BA from Yale University and a MBA from Harvard University.
Together, Jim Kiles, Paul Overby and Ashish Badjatia comprise the Board of Directors. Mr. Badjatia continues his role as Chief Operating Officer.
Employees and Consultants
On March 29, 2016 the Company signed a consulting agreement with Neil Cohen, whereby Mr. Cohen, as Vice President of Marketing, will provide senior marketing and communications consulting services. Mr. Cohen's compensation consists of 50,000 shares delivered subsequent to FINRA approval of the reverse stock split, received on June 3, 2016, plus an additional 25,000 common restricted shares, to be delivered at the end of each fiscal quarter commencing June 30, 2016. That contract was canceled on August 15, 2016 and replaced with a new one, dated September 27, 2016 requiring the issuance of an additional 500,000 common restricted shares within 50 calendar days and 250,000 common restricted shares on or before March 31, 2017.
On June 10, 2016, the Company appointed Robert Petchel the Senior Vice President of Project Development.
On September 27, 2016, the Company signed a consulting agreement with Shirley Gee in the role of Venture Partner. In this role, Ms. Gee shall provide a broad range of services with the intent to organize the internal structure and operations of the Company to facilitate larger levels of fundraising. Ms. Gee's compensation in this role consists of 700,000 shares upon signing and an additional 300,000 shares at the end of 2017 Q1 contingent upon continuation of her role. In addition, consultant is to receive monthly compensation of $8,000 per month, commencing at a, to be determined future date, deferred, and paid in full, when the Company secures funding of at least $750,000, at which time the compensation shall increase to $12,000 per month, non-deferred. In any quarter, after the deferred compensation has commenced, the consultant may elect to convert that quarter's unpaid compensation into 25,000 common restricted shares. On April 23, 2017 Ms. Gee elected to convert the unpaid consulting fees and the Company issued, to her, 150,000 common shares.
We expectOn January 19, 2017 the Company entered into a consulting agreement with Zachary Lebovitz to maintainprovide technology services as required thru March 25, 2017. The agreement required compensation of 30,000 shares to be issued at the rate of 10,000 shares per month, was automatically renewable unless otherwise canceled, for additional 10,000 common shares per month. The 30,000 shares were recorded at a small staff on our payroll so that we cancost of $0.1281 per share for a total cost of $3,843 and the 10,000 renewal shares were recorded at a cost of $0.17 per share for a total cost of $1,700
On March 14, 2017 the Company entered into a one year consulting agreement, with Jon Sigerman, having an effective date of March 9, 2017 to compensate Mr. Sigerman for services to be nimble and effective. To accomplish this goal, we expectprovided. Compensation is the issuance of a warrant, exercisable thirty days from the effective date, to employ contract employees for our initial projects.
Recruiting top level personnel will be aided by share based compensation tiedpurchase up to overall performance.
Executive cash compensation will be minimal due to their equity stakes with our Company. Key executive operations, such as Finance and Human Resources will be outsourced until500,000 common shares of the Company at a full time presence is necessary. cost of $0.13333 per share.
Advisory Board
On September 27, 2016, the Company formally created, and approved, a Science and Technology Advisory Board ("Advisory Board"). Each of the initial seven members of this Board will receive 15,000 shares of common stock for serving in this role.
The advisors include:
| § | Kevin T. McLoughlin is a Senior Consultant at Environmental Consultants Inc., and is an expert in energy efficiency. In the past, he held senior positions at the New York Power Authority and the Empire State Electric Energy Research Corporation. |
| § | Peter Therkelsen, Ph.D, is a Research Scientist in the Environmental Energy Technologies Division at the Lawrence Berkeley National Laboratory. His work focuses on industrial energy performance and management as well as the development and deployment of responsible energy efficiency and generation technologies. In this role he actively studies barriers On February 17, 2017 the Company added an additional eight members to the implementation of industrial energy efficiency measures, supports the implementation of energy management systems in the United States, and serves as a delegate of the United States at International Standards Organization meetings for energy management and savings. Dr. Therkelsen conducts data driven analysis of energy management systems with a current focus on the costs and benefits of certification to the U.S. DOE Superior Energy Performance program. In addition, Dr. Therkelsen is head of the LBNL Combustion Laboratory where he studies and develops high efficiency, fuel flexible, and low emission installed and portable heat and power systems.
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| § | Scott Wallace, LEED AP and Certified Energy Manager, is an Associate Principal at Mazzetti, a leading healthcare engineering and technology company. Wallace manages the American Hospital Association's Energy to Care program designed to help hospitals develop and implement an energy and sustainability strategy. He brings 18 years of experience developing and implementing innovative energy solutions for large scale commercial buildings resulting in reduced cost, energy consumption, and greenhouse gas emissions while improving occupant comfort and productivity.
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| § | Dan Aronson was the co-founder and Chief Technology Officer of Fandor, a video streaming service for independent films, Dan has been at the forefront of technology since the '80s. He began building supercomputers at Thinking Machines Corporation and he was an early employee at WAIS, the first internet search engine company. He cofounded anti-spam company Brightmail and internet incubator Campsix, and has been on the boards of City Car Share and networked music player company Slim Devices.
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| § | Vi Rapp, Ph.D, is a Research Scientist working in the Energy Technologies Area at Lawrence Berkeley National Laboratory. Her research interests focus on ultra low emission and net zero carbon combustion technologies for heat and power generation. Her current activities include: improving combustion safety diagnostics for energy efficient homes; investigating efficient, low emission technologies for combustion appliances and small engine applications; and developing advanced biomass cookstoves for the developing world. Dr. Rapp holds a Ph.D. in Mechanical Engineering from the University of California, Berkeley. Her dissertation focused on reducing emissions and improving efficiency of internal combustion engines by implementing alternative modes of combustion and unconventional fuels.
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| § | Mike Tucker, Ph.D, is a Research Scientist and Principal Investigator at the Lawrence Berkeley National Laboratory. Mike has been engaged in R&D of electrochemical devices since 1997. His research experience is in Lithium Batteries, Direct Methanol Fuel Cells, Solid Oxide Fuel Cells, and Flow Cells. His experience is in resource-efficient development of new devices and concepts, with a clear focus on making devices work, and then making them work better. |
The Company has plans to expand this Advisory Board, to 20 persons by the endalso at a cost of the first quarter of 2017.15,000 common shares for each individual.
Stock Buyback
On September 30, 2016, the Company's Board unanimously authorized the Company to buy back its own stock in the open market within compliance of Rule 10b-18 of the US Securities and Exchange Commission, and authorizes these repurchases for a period of one year commencing on October 1, 2016.
Subsidiaries
We do not currently have any subsidiaries.
Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the unaudited financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.
We have generated minimal revenue from our core business model. However, duringDuring the ninethree months ended September 30, 2016,March 31, 2017, we earned commissions of $8,580$0 from internet sales compared to $22,327$7,217 during the same ninethree months in 2015, and no revenue from that source for the three months ended September 30, 2016 compared to $22,327 for the three months ended September 30, 2015.2016. We had no consulting revenue during theeither three and nine months ended September 30, 2016 compared to $7,500, during the nine months ended September 30, 2015.month period. Consulting contracts cover a variety of circumstances and needs and only become available from potential clients on an "as needed" basis. No such contracts were entered into during the ninethree months ended September 30,March 31, 2017 and 2016.
Our total operating expenses of $1,977,309$101,610 incurred during the ninethree months ended September 30, 2016,March 31, 2017 consisted of administrative and general costs of $1,973,343 which$101,610 included stock based compensationaccrued management fees of $1,901,677, depreciation of $357, and cost of revenue of $3,966$73,000, compared to a total operating expenses of $81,030 consisting of general and administrative costs of $79,251 and cost of revenue of $1,779 for the same nine months in 2015. Interest cost for the nine months ended September 30, 2016 increased to $1,770 for the nine months ended September 30, 2016 compared to $1,560 for the same nine months in 2015, and to $845 for the three months ended September 30, 2016 compared to $556$34,881 for the same three months in 2015, as a result of2016. Interest cost, due to additional notes and loans, for the addition of new loans. There were no costs of extinguishment or change in derivative liability during the ninethree months ended September 30, 2016March 31, 2017 was $2,895 compared to $116,687 and $15$269 for the ninethree months ended September 30, 2015.March 31, 2016.
Liquidity and Capital Resources
Net cash used, by operating activities, during the ninethree months ended September 30, 2016March 31, 2017 was $39,625$12,847 compared to cash used of $9,505$11,663 for the ninethree months ended September 30, 2015.March 31, 2016. The additional cash utilized wasCompany has stabilized its overhead while management has provided the result of increased generallabor to create and administrative overhead less cash provided bydevelop the collection of accounts receivable of $7,090 and increase in accounts payable of $21,855 compared to an increase in accounts payable of $14,060 from the same nine months of 2015.current projects.
Investing Activities
We did not use any cash resources for investing activities during the ninethree months ended September 30, 2016 nor for the nine months ended September 30, 2015.March 31, 2017 or March 31, 2016.
Financing Activities
During the ninethree months ended September 30, 2016March 31, 2017 the Company generated $30,000$5,000 from the saleissuance of a convertible note to the Company Board Chairman and $25,000 from an unrelated investor. The Company sold common shares and $10,000 from the sale of convertible notes compared to no such activitystock for $30,000 cash during the ninethree months ended September 30, 2015.March 31, 2016.
Going Concern
During the ninethree months ended September 30, 2016,March 31, 2017, we incurred a net loss of $1,970,499,$104,505 which included a non-cash stock basedaccrual, of $73,000 for management and consulting compensation expense of $1,901,677compared to $34,881 for the three months ended March 31, 2016, which included $3,000 for management and depreciation cost of $357.consulting. We have an accumulated deficit of $2,716,062$2,956,088 since inception. We are in the early stage of operations and have only, recently commenced generating revenuegenerated minimal revenue. Our new management, in furtherance of the business plan has entered into several contracts which amountedare intended to commissions on internet sales of $8,580 for the nine months ended September 30, 2016 compared to $22,327 of internet commissions and $7,500 of consulting fees for the nine months ended September 30, 2015. Weprovide future revenue. However, because we will continue to generate losses in the near future. Thesefuture these conditions raise substantial doubt about our ability to continue as a going concern.
These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to obtain additional financing or sale of its common stock and ultimately to attain profitability.
Management has adopted a new business plan and plans, in this regard, is to raise additional financing through a combination of equity and debt financing. Management believes this will be sufficient to finance the continuing development for the next twelve months. However, there is no assurance that we will be successful in raising such financing.
We currently do not have any other arrangements for financing and we may not be able to obtain the financing required. Obtaining additional financing would be subject to a number of factors, including our ability to attract investments prior to consistent revenue generation, and thereafter our ability to grow our brand and for success in our market. We may also require additional financing to sustain our business operations if we are not successful in earning significant revenues once our business plan is enacted.
Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 2 of our unaudited interim financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.
We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our unaudited interim financial statements:
Cash and Cash Equivalents
For purposes of the statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less which are not securing any corporate obligations. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.
Revenue Recognition
The Company recognizes revenue for its professional services when persuasive evidence of an arrangement exists, performance of services has occurred, the sales price is fixed or determinable and collectability is probable. During the ninethree months ended September 30, 2016,March 31, 2017, the Company earned $8,580$0 for product sales generated through the Amazon web site.
Website Development
We capitalize the costs associated with the development of our website. Other costs related to the maintenance of the website are expensed as incurred. Amortization will be provided over the estimated useful life of 3 years using the straight-line method for financial statement purposes.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).
Item 3 Quantitative and Qualitative Disclosures about Market Risk
Not required for a smaller reporting company.
Item 4 Controls and Procedures
Disclosure Controls and Procedures
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, management concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, these disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to material weaknesses identified in our internal control over financial reporting, as described in our annual report on Form 10-K for the year ended December 31, 2015.2016.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the ninethree months ended September 30, 2016March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.