Revenue from product sales relates to the sale of the Falcon haptics interface,3D Touch Haptic Controller (the “Falcon”), which is a human-computer user interface (the “Falcon”) and related accessories. The Falcon allows the user to experience the sense of touch when using a computer, while holding its interchangeable handle. The Falcons are manufactured by an unrelated party. Revenue from the product sales isare recognized when the products are shipped to the customer and the Company has earned the right to receive and retain reasonable assured payments for the products sold and delivered. Consequently, if all these revenue from product salesrecognition requirements are not met, such sales will be recorded as deferred revenue until such time as all revenue recognition requirements are met.

Accounts Receivable

Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that $0 allowance is required at March 31, 20092020 and December 31, 2008,2019.

Income Taxes

The Company accounts for its income taxes under the Company recorded $29,061provisions of ASC Topic 740, “Income Taxes”. The method of accounting for income taxes under ASC 740 is an asset and 29,662, respectively,liability method which requires recognition of deferred revenue, which represents fees receivedtax assets and liabilities for product and project revenuesthe expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which 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 met all revenue recognition requirements.

Fair Value of Financial Instruments

The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for disclosures about fair value of its financial instruments and to measure the fair value of its financial instruments. The FASB ASC establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy are described below:

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. 

The carrying amounts of the Company’s financial assets and liabilities, including cash, inventory, prepaid expenses, accounts payable, accrued expenses, payroll and related liabilities, and advances approximate their fair values because of the short maturity of these instruments.

Recently Issued Accounting Pronouncements

The Company has reviewed the recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, (EITF) 00-10, Accounting for Shipping and Handling Fees and Costs, require amounts billed to a customer in a sales transaction related to shipping and handling, if any, to be classified and accounted for as revenues earned for the goods provided whereas shipping and handling costs incurred by a company are required to be classified as costAmerican Institute of sales. The Company’s costs associated with shipping product items to the Company’s customers are included in the Company’s cost of goods sold, which for the three months ended March 31, 2009 and 2008 approximated $6,509 and $8,140, respectively.

NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses are as follows:

NOTE 4 – COMMITMENTS AND CONTINGENCIES

From time to time, in the normal course of business, the Company is subject to routine litigation incidental to its business. Although there can be no assurances as to the ultimate disposition of any such matters, it is the opinion of management, based upon the information available at this time, that there are no matters, individually or in the aggregate, that will have a material adverse effect on the financial position or results of operations and financial condition of the Company.

The Company has licensing agreements with various parties providing gaming software. These licensing agreements have royalty fees ranging from 5% to 50% of either gross or net revenue, and a flat per user end fee of $0.50. Under one or more of these agreements, there was an annual aggregate minimum payment due of $50,000 which has been recorded as accrued royalties but remains unpaid. Accrued royalty fees as of March 31, 2009, prepaid expenses totaling $1,645,580 principally consist2020 and December 31, 2019, was $545,632 and $533,132, respectively. If contested, the Company may be found to be in breach of prepayments towards marketing costs, insurance premiums, rents,obligations to pay these amounts (although the Company believes this obligation is no longer ongoing), thus the remaining obligation under this agreement will remain as a liability.

NOTE 5 – INCOME TAXES

The Company files corporate income tax returns in the United States (Federal), in New Mexico and royaltiesin New York. The Company is subject to federal, state and local income tax examinations by tax authorities for the tax years 2015 through 2018.

As of December 31, 2019, the Company had federal and state net operating loss carry forwards of $33.8 million and $0.5 million, respectively. Federal net operating losses generated prior to January 1, 2018, amounting to  $33.7 million, and may be offset against future taxable income, subject to limitation under IRC Section 382, which $1,079,173 is consideredbegin to expire in 2022 if not utilized prior to that date, and fully expire during various years through 2037 for federal purposes.  Net operating losses generated after January 1, 2018, amounting to $0.3 million, are limited to 80% utilization of current year income and no longer have an expiration. State net operating loss carryforwards will begin to expire in 2034 through 2039. 

Other than minimum taxes, the long-term portion. Prepayments on royalties comprisecompany does not incur a significant portion ofprovision for income taxes because the prepaid expenses at March 31, 2009 totaling $1,583,566 of which $1,079,173 is considered long-term portionCompany has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets due to the lengthuncertainty surrounding the realizability of the related licensebenefit, based on a more likely than not criteria and royalty agreementsin consideration of available positive and negative evidence.

On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”), was signed into law by President Trump. The Act includes a number of provisions, including the lowering of the U.S. corporate tax rate from 34 percent to 21 percent, effective January 1, 2018 and the expected realization.

NOTE 76 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is currently authorized to issue up to 12,500,000 shares of $0.0001 par value preferred stock. No shares of preferred stock are currently outstanding. The Board of Directors granted employeesmay designate the authorized but unissued shares of the Preferred Stock with such rights and privileges as the board of directors 6,850,000 optionsmay determine. As such, the board of directors may issue preferred shares and designate the conversion, voting and other rights and preferences without notice to purchasethe shareholders and without shareholder approval.

Common Stock

The Company is currently authorized to issue up to 500,000,000 shares of $0.0001 par value common stock. All issued shares of common stock at an exercise priceare entitled to vote on a 1 share/1 vote basis.

The Company had 202,308,728 shares of $.10 per share as compensation for prior services.  The options vest upon grant,common stock issued and the expense for these options, totaling $582,102, was recorded in the year ended December 31, 2008.  As the options have not been issued, the value remains in accrued payroll liabilities on the accompanying balance sheetoutstanding as of March 31, 2009.  2020 and December 31, 2019.

NOTE 7 – SUBSEQUENT EVENTS

The Board of Directors also granted consultants 700,000 options to purchase shares of common stockCompany has evaluated subsequent events through the date these financial statements were issued.

We may be at an exercise price of $.10 per sharerisk as compensation for future services.  These options vest equally every six months for two years following the grant.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the audited Financial Statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K as of and for the fiscal year ended December31, 2019.  Unless otherwise noted, all the financial information in this Report is financial information for the Company.

General

The Company currently is engaged in the development and sale of 3D haptics products and equipment. Haptics refers to one’s sense of touch.  The Company’s focus is in the consumer interactive computer gaming market, but the Company also does project work in other areas. The Company’s operations are based in New Mexico with sales of its haptics products primarily to consumers through retail outlets.

Results of Operations for the Three Months Ended March 31, 2020 and 2019

Revenues

The Company recorded $1,000 of revenue for the three-month period ended March 31, 2020 and no revenue during the three-month period ended March 31, 2019. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future. The Company’s net losses may fluctuate significantly from quarter to quarter and year to year.

Operating Expenses

Operating expenses increased by $10,901 or 27% due to an increase in professional fees of $11,307 and a decrease in general and administrative expenses of $406. The increase in professional fees is primarily due to additional costs of being a current reporting company.

Other Expense

Other expense was for services performed during 2008.  The remaining $1,700 was recorded as expense$106 during the three months ended March 31, 2009.  The Board of Directors also approved the issuance of  250,000 restricted shares of common stock to a consultant for consulting services.  As the shares have not been issued, the value $37,500 has been accrued for and is included in accrued expenses on the accompanying balance sheet as of March 31, 2009.

Liquidity and 2008,Capital Resources

The following table summarizes select balance sheet and working capital amounts as at March 31, 2020 and December 31, 2019:

At March 31, 2020, the Company paid $0had working capital deficit of approximately $257,005. Accumulated deficit amounted to $41,336,529 and $25,000, respectively,$41,286,135 at March 31, 2020 and December 31, 2019, respectively. Net loss for these services.the three months ended March 31, 2020 and 2019 was $50,394 and $40,469, respectively. Net cash used in operating activities was $33,640 and $26,989 for the three months ended March 31, 2020 and 2019, respectively. Operations since inception have been funded primarily with the proceeds from equity and debt offerings. As of March 31, 2009,2020, the Company owed $43,750had cash of $398,075.

The Company’s management has evaluated whether there is substantial doubt about the Company’s ability to Normandie New Mexico under the agreement.

There is no assurance that the Black-Scholes model based onCompany will be successful in any capital-raising efforts that it may undertake to fund operations during 2020. The Company anticipates that it will continue to issue equity and/or debt securities as a source of liquidity, until it begins to generate positive cash flow to support its operations. Any future sales of securities to finance operations will dilute existing stockholders’ ownership. The Company cannot guarantee when or if it will generate positive cash flow.

The audit report prepared by our independent registered public accounting firm relating to the Company’s consolidated financial statements for the year ended December 31, 2019 included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.

Cash Flow Activities

The following assumptions: a risk-free ratetable summarizes the Company’s cash flows for the periods set forth below:

Net cash used in operating activities for the three months ended March 31, 2020 was $33,640 compared with net cash used in operating activities of 2.24%, volatility of 120%, estimated life of 10 years, and a fair market value of $0.20 per share.$26,989 for the three months ended March 31, 2019. The vesting schedule is prorated over the reporting period, and approximately $(8,910) and $14,000 was recorded as consulting expensenet cash used in operating activities during the three months ended March 31, 20092020, was primarily due to a net loss of $50,394 partial offset by increase of $19,709 in accounts payable and 2008, respectively.

Net cash used in operating activities for the three months ended March 9, 2006, the Company granted 250,000 options to purchase common stock to an employee, who is the brother of the Company’s Chief Executive Officer, at an exercise price of $1.00 per share.31, 2019 was $26,989. The options have a ten year term, and a vesting schedule of 50,000 shares per year beginning March 9, 2007. At March 9, 2006, the Company calculated the initial value of the options using the Black-Scholes model based on the following assumptions: a risk-free rate of 4.86%, volatility of 36%, estimated life of 10 years and a fair market value of $1.00 per share.   The vesting schedule is prorated over the reporting period, and approximately $7,135 and $7,135 was recorded as consulting expensenet cash used in operating activities during the three months ended March 31, 20092019, was primarily due to a net loss of $40,469 partial offset by increase of $13,150 in accounts payable and 2008, respectively.

Effects of Inflation

We do not believe that inflation has had a material impact on our business, sales, or operating results during the Company granted 1,500,000 optionsperiods presented.

Off-Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements or financing activities with special-purpose entities.

Critical Accounting Policies

Critical accounting policies are those policies which are both important to purchase common stock to onethe presentation of a company’s financial condition and results and require management’s most difficult, subjective or complex judgments, often as a result of the membersneed to make estimates about the effect of the Company’s Board of Directors for future consulting services at an exercise price of $0.90 per share. The optionsmatters that are inherently uncertain.  There have a 2-year annual vesting provision which 750,000 these options vested immediately. At December 31, 2006, the Company calculated the initial value of these options using the Black-Scholes model based on the following assumptions: a risk-free rate of 5.15%, volatility of 146%, estimated life of 10 years, and a fair market value of $1.05 per share. The vesting schedule is prorated over the reporting period, and approximately $0 (fully vested as of December 31, 2008) and $61,496 was recorded as consultant expensebeen no recent significant changes to our accounting policies during the three months ended March 31, 20092020.  For a further discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2019

Certain Factors That May Affect Future Results of Operations

The Securities and 2008, respectively.