U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x☒ Quarterly Report Pursuant to SectionQUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) of the Securities Exchange Act ofOR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended quarter ended: September 30, 20102020
Or
☐
For the Transition Period from ___________ to____________
Commission file number: File Number: 000-52490
Beyond Commerce, Inc.
(Exact name of registrant as specified in its charter)
Nevada | 98-0512515 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
3773 Howard Hughes Pkwy, Suite 500 Las Vegas, Nevada 89169 (Address of Principal Executive Offices) | ||
(702) 952.9549
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | None | None |
Indicate by check mark whether the registrant:registrant (1) has filed all reports required to be filed by Section 13 or 15 (d)15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsrequirement for the past 90 days. Yes x☒ No ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,a every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨☒ No ¨☐ .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”
“accelerated filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-212(b)-2 of the Exchange Act).Yes. Yes ¨☐ No x☒
Indicate the number of November 18, 2010, there wereshares outstanding 84,131,812sharesof each of the registrant’s classes of common stock.
Table of Contents
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)4
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS32
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.36
ITEM 4. CONTROLS AND PROCEDURES36
PART I -II – OTHER INFORMATION38
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.38
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.39
ITEM 4. MINE SAFETY DISCLOSURES.39
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Beyond Commerce, Inc.
UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE THREE- AND NINE-MONTH PERIODS ENDED
September 30, 2020 & 2019
BEYOND COMMERCE, INC.
TABLE OF CONTENTS
Page | |
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2020 & DECEMBER 31, 2019 (Unaudited) | 6 |
7 | |
8 | |
9 | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) | 11 |
September 30, 2010 | December 31, 2009 | |||||||
ASSETS | ||||||||
Current assets : | ||||||||
Cash | $ | 1,237 | $ | 7,205 | ||||
Accounts receivable (net of allowance for doubtful accounts of $41,206 and $0 at September 30, 2010 and December 31, 2009 respectively) | 4,493 | 10,697 | ||||||
Accounts receivable – related party | 150,718 | |||||||
Prepaid loan cost | - | 33,681 | ||||||
Prepaid loan cost - related part | - | 37,889 | ||||||
Other current assets | 37,172 | 518,677 | ||||||
Total current assets | $ | 193,620- | $ | 608,149 | ||||
Property, website, and computer equipment | 1,350,620 | 1,051,558 | ||||||
Less: Accumulated depreciation and amortization | (673,511 | ) | (517,571 | ) | ||||
Property, website, and computer equipment - Net | $ | 677,109 | $ | 533,987 | ||||
Other Assets | $ | 29,344 | $ | 62,204 | ||||
Investment in Related Parties | 1,999,644 | - | ||||||
Total Other Assets | $ | 2,028,988 | $ | 62,204 | ||||
Total Assets | $ | 2,899,717 | $ | 1,204,340 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current liabilities: | ||||||||
Short term borrowings | $ | 2,357,101 | $ | 3,400,000 | ||||
Short term borrowings - related party | 2,956,655 | 2,180,533 | ||||||
Accounts payable | 2,502,197 | 2,251,951 | ||||||
Accounts payable - related party | 26,396 | 26,396 | ||||||
Note derivative liability | 349,934 | 180,632 | ||||||
Note derivative liability - related party | 1,800,933 | 2,425,473 | ||||||
Other current liabilities | 2,669,472 | 2,207,830 | ||||||
Other current liabilities - related party | 489,880 | 251,386 | ||||||
Deferred Revenue | - | 756,262 | ||||||
Total current liabilities | $ | 13,152,568 | $ | 13,680,463 | ||||
Commitments and contingencies | ||||||||
Stockholders' Deficit : | ||||||||
Common stock, $0.001 par value, 200,000,000 shares authorized as of September 30, 2010 and December 31, 2009, 84,131,812 and 58,793,311 issued and outstanding at September 30, 2010 and December 31, 2009, respectively | $ | 84,131 | $ | 58,793 | ||||
Preferred stock,$.001 par value of 50,000,000 shares authorized and no shares issued | - | - | ||||||
Additional paid in capital | 20,734,530 | 17,744,799 | ||||||
Accumulated deficit | (31,071,512 | ) | (30,279,715 | ) | ||||
Total stockholders' deficit | $ | (10,252,851 | ) | $ | (12,476,123 | ) | ||
Total Liabilities and Stockholders' Deficit | $ | 2,899,717 | $ | 1,204,340 |
(UNAUDITED)
|
| September 30, |
|
| December 31, |
| |||
|
| 2020 |
|
| 2019 |
| |||
ASSETS |
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
| |||
Cash & cash equivalents |
| $ | 95,051 |
|
| $ | 585,339 |
| |
Accounts receivable, net |
|
| 1,100,558 |
|
|
| 1,347,813 |
| |
Assets held for sale, current |
|
| - |
|
|
| 113,470 |
| |
Other current assets |
|
| 53,163 |
|
|
| 24,229 |
| |
Total current assets |
|
| 1,248,772 |
|
|
| 2,070,851 |
| |
Assets held for sale, long-term |
|
| - |
|
|
| 2,695,085 |
| |
Property, equipment, and software - net |
|
| 43,107 |
|
|
| 37,468 |
| |
Intangible asset- net |
|
| 2,777,895 |
|
|
| 3,137,083 |
| |
Goodwill |
|
| 1,299,144 |
|
|
| 1,299,144 |
| |
|
|
|
|
|
|
|
|
| |
|
| $ | 5,368,918 |
|
|
| 9,239,631 |
| |
|
|
|
|
|
|
|
|
| |
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
| |
Current liabilities: |
|
|
|
|
|
|
|
| |
Accounts payable |
| $ | 758,727 |
|
| $ | 597,777 |
| |
Other current liabilities |
|
| 313,818 |
|
|
| 149,873 |
| |
Accrued payroll & related items |
|
| 1,434,047 |
|
|
| 1,015,180 |
| |
Derivative liability |
|
| 1,847,325 |
|
|
| 1,433,403 |
| |
Short-term borrowings – net of discount |
|
| 3,265,914 |
|
|
| 2,714,762 |
| |
Liabilities of assets held for sale, current |
|
| - |
|
|
| 2,109,850 |
| |
Short-term borrowings- related party |
|
| 54,000 |
|
|
| 54,000 |
| |
Total current liabilities |
|
| 7,673,831 |
|
|
| 8,074,845 |
| |
|
|
|
|
|
|
|
|
| |
Long-term borrowings – net of discount |
|
| 3,163,231 |
|
|
| 3,119,785 |
| |
Liabilities of assets held for sale, long-term |
|
| - |
|
|
| 1,048,795 |
| |
Total liabilities |
|
| 10,837,062 |
|
|
| 12,243,425 |
| |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Mezzanine Equity: |
|
|
|
|
|
|
|
| |
Preferred stock series A, $0.001 par value of 249,999,900 shares authorized and 249,999,900 and 249,999,900 shares issued and outstanding, respectively. |
|
| 250,000 |
|
|
| 250,000 |
| |
Preferred stock series B, $0.001 par value of 51 shares authorized and 33 and 20 shares issued and outstanding, respectively. |
|
| - |
|
|
| - |
| |
Stockholders Equity: |
|
|
|
|
|
|
|
| |
Common stock, $0.001 par value, 5,000,000,000 shares authorized, 3,000,000,000 and 1,495,004,678 issued and outstanding as of September 30, 2020 and at December 31, 2019, respectively. |
|
| 3,000,000 |
|
|
| 1,495,004 |
| |
Additional paid in capital |
|
| 49,695,263 |
|
|
| 43,347,152 |
| |
Accumulated deficit |
|
| (58,512,832) |
|
|
| (48,227,200) |
| |
Deficit attributable to Beyond Commerce, Inc stockholder |
|
| (5,567,569) |
|
|
| (3,135,044) |
| |
Equity attributable to noncontrolling interest |
|
| 99,425 |
|
|
| 131,250 |
| |
Total stockholders' deficit |
|
| (5,468,144) |
|
|
| (3,003,794) |
| |
|
|
|
|
|
|
|
|
| |
Total liabilities and stockholders' deficit |
| $ | 5,368,918 |
|
| $ | 9,239,631 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statementsstatements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE & NINE-MONTH PERIODS ENDED SEPTEMBER 30,
2010 | 2009 | |||||||
Revenues | $ | 26,454 | $ | 240,078 | ||||
Operating expenses | ||||||||
Cost of products sold, net | $ | 30,808 | $ | 42,175 | ||||
Selling general & administrative | 368,522 | 1,340,621 | ||||||
Selling general & administrative - Related party | 8,778 | 6,930 | ||||||
Professional fees | 376,605 | 732,310 | ||||||
Professional fees - Related party | - | 77,740 | ||||||
Depreciation and amortization | 68,127 | 48,473 | ||||||
Total cost and operating expenses | $ | 852,840 | $ | 2,248,249 | ||||
Income(Loss) from operations | (826,386 | ) | (2,008,171 | ) | ||||
Non-operating income (expense) | ||||||||
Interest expense | (165,285 | ) | (3,077,482 | ) | ||||
Interest expense - Related party | (20,833 | ) | (62,800 | ) | ||||
Income/(expense) related to derivative | 3,889,275 | (2,942,287 | ) | |||||
Total non-operating Income (expense) | $ | 3,703,157 | $ | (6,082,569 | ) | |||
Income (Loss) from continuing operations before income taxes | 2,876,771 | (8,090,740 | ) | |||||
Gain (Loss) from discontinued operations net of income taxes | (9,980 | ) | (444,605 | ) | ||||
Provisions for income tax | - | - | ||||||
Income (Loss) before equity income (Loss) of Investee | $ | 2,866,791 | $ | (8,535,345 | ) | |||
Loss from equity method of investee | (970,911 | ) | - | |||||
Net income (loss) | $ | 1,895,880 | $ | (8,535,345 | ) | |||
Net income (loss) per common share - basic and diluted | $ | .04 | $ | (0.18 | ) | |||
Net income (loss) per common share-basic and diluted-continuing operations | $ | .05 | $ | (0.17 | ) | |||
Net income (loss) per common share-basic and diluted-discontinued operations | $ | (0.00 | ) | $ | (0.01 | ) | ||
Weighted average number of common shares outstanding | 77,884,383 | 46,619,719 |
UNAUDITED
|
| For the three months ended September 30, |
|
| For the three months ended September 30, |
|
| For the nine months ended September 30, |
|
| For the nine months ended September 30, | |||||||||||||||
Revenues |
| $ | 983,155 |
|
| $ 1,184,299 |
| $ | 3,012,754 |
|
| $ | 2,862,141 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cost of revenue |
|
| 326,452 |
|
|
| 364,185 |
|
|
| 996,889 |
|
|
| 819,269 |
| ||||||||||
Selling, general and administrative |
|
| 234,742 |
|
|
| 269,897 |
|
|
| 886,894 |
|
|
| 715,583 |
| ||||||||||
Payroll expense |
|
| 640,557 |
|
|
| 545,518 |
|
|
| 1,897,723 |
|
|
| 1,487,886 |
| ||||||||||
Professional Fees |
|
| 328,952 |
|
|
| 295,920 |
|
|
| 792,693 |
|
|
| 789,082 |
| ||||||||||
Depreciation and amortization |
|
| 124,253 |
|
|
| 160,296 |
|
|
| 371,899 |
|
|
| 374,183 |
| ||||||||||
Total operating expenses |
|
| 1,654,956 |
|
|
| 1,635,816 |
|
|
| 4,946,098 |
|
|
| 4,186,003 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Loss from operations |
|
| (671,801) |
|
|
| (451,517) |
|
|
| (1,933,344) |
|
|
| (1,323,862) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Non-operating income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest expense |
|
| (638,720) |
|
|
| (215,485) |
|
|
| (1,542,467) |
|
|
| (621,059) |
| ||||||||||
Amortization of debt discount |
|
| (72,113) |
|
|
| (357,896) |
|
|
| (620,764) |
|
|
| (1,346,763) |
| ||||||||||
Derivative related expenses |
|
| (100,452) |
|
|
| (240,918) |
|
|
| (1,352,527) |
|
|
| (1,827,418) |
| ||||||||||
Change in derivative liability |
|
| (6,246,363) |
|
|
| 3,126,376 |
|
|
| (5,219,055) |
|
|
| (1,953,542) |
| ||||||||||
Total non-operating income (expense) |
|
| (7,057,648) |
|
|
| 2,312,077 |
|
|
| (8,734,813) |
|
|
| (5,748,782) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Loss from continuing operations before income tax |
|
| (7,729,449) |
|
|
| 1,860,560 |
|
|
| (10,668,157) |
|
|
| (7,072,644) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Income (loss) from discontinued operation, net of tax |
|
| - |
|
|
| (52,043) |
|
|
| 350,700 |
|
|
| (40,849) |
| ||||||||||
Provision for income tax |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Consolidated net loss |
| $ | (7,729,449) |
|
| $ | 1,808,517 |
|
| $ | (10,317,457) |
|
| $ | (7,113,493) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Amounts Attributable to Noncontrolling and Controlling Interest |
|
|
|
|
|
| ||||||||||||||||||||
Consolidated net income (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Noncontrolling interest | $ |
| (4,410) |
|
| $ | - |
|
| $ | (31,825) |
|
| $ | - |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Consolidated net loss, controlling interest | $ |
| (7,725,039) |
|
| $ | 1,808,517 |
|
| $ | (10,285,632) |
|
| $ | (7,113,493) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income (loss) per common share-basic |
| $ | (0.00) |
|
| $ | 0.00 |
|
| $ | (0.01) |
|
| $ | (0.01) |
| ||||||||||
Net income (loss) per common share-diluted |
| $ | (0.00) |
|
| $ | 0.00 |
|
| $ | (0.01) |
|
| $ | (0.01) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Weighted average shares of capital outstanding –(basic) |
|
| 2,927,661,679 |
|
|
| 1,343,286,588 |
|
|
| 2,129,022,445 |
|
|
| 1,176,847,590 |
| ||||||||||
Weighted average shares of capital outstanding –(diluted) |
|
| 2,927,661,679 |
|
|
| 3,430,620,557 |
|
|
| 2,129,022,445 |
|
|
| 1,176,847,590 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30,
(Unaudited)
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
Net loss | $ | (10,317,457) |
| $ | (7,072,644) |
Income (loss) from discontinued operations |
| (350,700) |
|
| (40,849) |
Cash flows from operating activities: |
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
Stock issued for services |
| 190,450 |
|
| 303,925 |
Loss on derivative |
| 2,238,451 |
|
| 2,266,224 |
Amortization of debt discount |
| 620,764 |
|
| 1,346,763 |
Depreciation and amortization |
| 371,899 |
|
| 374,183 |
Change in derivative liability |
| 5,219,055 |
|
| 1,953,543 |
Changes in assets and liabilities: |
|
|
|
|
|
(Increase) decrease in accounts receivable |
| 247,256 |
|
| 95,650 |
(Increase) decrease in other current assets |
| (31,055) |
|
| (28,004) |
Increase (decrease) in accounts payable |
| 161,561 |
|
| (29,848) |
Increase (decrease) in payroll liabilities |
| 418,869 |
|
| 362,333 |
Increase (decrease) in other current liabilities |
| 310,834 |
|
| 505,470 |
Net cash provided by (used in) in operating activities. | $ | (920,073) |
| $ | 77,595 |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Acquisition of property and equipment |
| (16,230) |
|
| (2,218,201) |
Cash acquired in acquisition |
| - |
|
| 204,105 |
Net cash used in investing activities | $ | (16,230) |
|
| (2,014,096) |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Repayment of Convertible Notes |
| (81,240) |
|
| - |
Cash receipts from notes payable |
| 527,255 |
|
| 2,000,000 |
Net cash provided (used in) by financing activities |
| 446,015 |
|
| 2,000,000 |
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
| (490,288) |
|
| 63,499 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning balance |
| 585,339 |
|
| 79,890 |
Cash and cash equivalents, ending balance | $ | 95,051 |
| $ | 143,389 |
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
Cash Paid For: |
|
|
|
|
|
Interest | $ | - |
| $ | - |
Income taxes | $ | - |
| $ | - |
Summary of Non-Cash Investing and Financing Information: |
|
|
|
|
|
Stock issued for conversion of debt | $ | 1,504,995 |
| $ | 1,778,592 |
Notes issued in relation to Service 800 acquisition | $ | - |
| $ | 2,000,000 |
Purchase Price holdback note on Service 800 acquisition | $ | - |
| $ | 210,000 |
Purchase price allocation note on Service 800 acquisition | $ | - |
| $ | 1,233,828 |
Stock issued for acquisition deposit of PathUX | $ | - |
| $ | 427,000 |
Related party debt forgiveness | $ | - |
| $ | 8,360,224 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statementsstatements.
BEYOND COMMERCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
2010 | 2009 | |||||||
Revenues | $ | 577,354 | $ | 409,050 | ||||
Operating expenses | ||||||||
Cost of products sold, net | $ | 224,757 | $ | 62,670 | ||||
Selling general & administrative | 1,398,878 | 4,256,988 | ||||||
Selling general & administrative - related party | 3,220,967 | 37,268 | ||||||
Professional fees | 1,172,729 | 1,414,800 | ||||||
Professional fees - Related party | - | 233,380 | ||||||
Depreciation and amortization | 188,767 | 145,041 | ||||||
Loss on disposition of assets | 33,702 | - | ||||||
Total cost and operating expenses | $ | 6,239,800 | $ | 6,150,147 | ||||
Loss from operations | (5,662,446 | ) | (5,741,097 | ) | ||||
Non-operating income (expense) | ||||||||
Interest expense | (406,477 | ) | (7,597,971 | ) | ||||
Interest expense - Related party | (971,735 | ) | (62,800 | |||||
Gain on deconsolidation of subsidiary | 6,687,530 | - | ||||||
Income/(expense) related to derivative | 585,046 | 1,055,747 | ||||||
Total non-operating Income (expense) | $ | 5,894,364 | $ | (6,605,024 | ) | |||
Gain (loss) from continuing operations before income taxes | 231,918 | (12,346,121 | ) | |||||
Gain (Loss) from discontinued operations net of income taxes | 60,177 | (4,768,785 | ) | |||||
Provisions for income tax | - | - | ||||||
Gain (Loss) before equity income (Loss) of Investee | $ | 292,095 | $ | (17,114,906 | ) | |||
Loss from equity method of investee | (1,083,891 | ) | - | |||||
Net income (loss) | $ | (791,796 | ) | $ | (17,114,906 | ) | ||
Net income (loss) per common share - basic and diluted | $ | (.01 | ) | $ | (0.39 | ) | ||
Net income (loss) per common share-basic and diluted-continuing operations | $ | .00 | $ | (0.28 | ) | |||
Net income (loss) per common share-basic and diluted-discontinued operations | $ | (0.00 | ) | $ | (0.11 | ) | ||
Weighted average number of common shares outstanding | 72,679,602 | 43,737,435 |
STOCKHOLDERS’ DEFICIT
(Unaudited)
| Common Stock |
| Additional | Accumulated | Stockholders' | ||||||
|
| Shares | Par Value | Paid in Capital | Deficit | Equity | |||||
Balance, December 31, 2018 | 1,017,450,000 | $1,017,450 | $27,599,349 | $(42,762,680) | $(13,895,881) | ||||||
Extinguishment of derivative liabilities on conversion | - | - | 3,872,545 | - | 3,872,545 | ||||||
Warrants issued with debt | - | - | 696,850 | - | 696,850 | ||||||
Common stock issued for debt conversion | 62,472,003 | 62,472 | 998,014 | - | 1,060,486 | ||||||
Common stock issued for interest conversion | 5,507,873 | 5,508 | 90,399 | - | 95,907 | ||||||
Net loss |
|
|
| (3,754,002) | (3,754,002) | ||||||
Balance, March 31, 2019 | 1,085,429,876 | $1,085,430 | $33,257,157 | $(46,516,682) | $(11,924,095) |
Common stock issued for debt conversion |
64,482,327 |
64,482 |
12,538 |
- |
77,020 |
Common stock issued for interest | 12,537,673 | 12,538 | 2,442 | - | 14,980 |
Stock issued for acquisition | 70,000,000 | 70,000 | 357,000 | - | 427,000 |
Stock Issued for services | 10,825,000 | 10,825 | 293,100 | - | 303,925 |
Extinguishment of derivative liabilities on conversion |
- |
- | 464,501 | - | 464,501 |
Net loss |
|
|
| (5,168,008) | (5,168,008) |
Balance, June 30, 2019 | 1,243,274,876 | $ 1,243,275 | $ 34,386,738 | $ (51,684,690) | $ (15,804,677) |
Common stock issued for debt conversion |
190,729,802 |
190,729 |
44,850 |
- |
235,579 |
Debt forgiveness | - | - | 8,360,224 | - | 8,360,224 |
Extinguishment of derivative liabilities on conversion |
- |
- | 294,622 | - | 294,622 |
Net loss |
|
|
| 1,808,517 | 1,808,517 |
Balance, September 30, 2019 | 1,434,004,678 | $ 1,434,004 | $ 43,086,434 | $ (49,876,173) | $ (5,105,735) |
|
| Series A&B Preferred Stock
| Common Stock | Non-Controlling |
| Additional | Accumulated | Stockholders' | ||
|
| Shares | Par Value | Shares | Par Value | Interest |
| Paid in Capital | Deficit | Deficit |
Balance, December 31, 2019 | 249,999,920 | $ 250,000 | 1,495,004,678 | $ 1,495,004 | $ 131,250 | $ - | $ 43,347,152 | $ (48,227,200) | $ (3,003,794) | |
| - | - | 132,910,000 | 132,910 |
|
| - | - | 132,910 | |
Extinguishment of derivative liabilities on conversion | - | - | - | - |
|
| 132,005 | - | 132,005 | |
Net loss |
| - | - | - | - | (20,200) |
| - | (424,584) | (444,784) |
Balance, March 31, 2020 | 249,999,920 | $ 250,000 | 1,627,914,678 | $ 1,627,914 | $ 111,050 |
| $ 43,479,157 | $ (48,651,784) | $ (3,183,663) | |
Common stock issued for debt conversion |
| - | - | 889,766,383 | 889,766 |
|
| - | - | 889,766 |
Extinguishment of derivative liabilities on conversion | - | - | - | - |
|
| 1,101,419 | - | 1,101,419 | |
Net loss |
| - | - | - | - | (7,215) |
| - | (2,136,009) | (2,143,224) |
Balance, June 30, 2020 | 249,999,920 | $ 250,000 | 2,517,681,061 | $ 2,517,680 | $ 103,835 |
| $ 44,580,576 | $ (50,787,793) | $ (3,335,702) | |
Common stock issued for debt conversion |
| - | - | 482,318,939 | 482,320 |
|
| - | - | 482,320 |
Extinguishment of derivative liabilities on conversion | - | - | - | - |
|
| 4,924,237 | - | 4,924,237 | |
Stock Issued for services | 13 |
|
|
|
|
| 190,450 |
| 190,450 | |
Net loss |
| - | - | - | - | (4,410) |
| - | (7,725,039) | (7,729,449) |
Balance, September 30, 2020 | 249,999,933 | $ 250,000 | 3,000,000,000 | $ 3,000,000 | $ 99,425 |
| $ 49,695,263 | $ (58,512,832) | $ (5,468,144) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statementsstatements.
BEYOND COMMERCE, INC.
2010 | 2009 | |||||||
Net cash used in operating activities | $ | (277,985 | ) | $ | (6,584,380 | ) | ||
Cash flows from investing activities: | ||||||||
Cash paid to purchase property and equipment | (44,785 | ) | (9,665 | ) | ||||
Net cash used in investing activities | $ | (44,785 | ) | $ | (9,665 | ) | ||
Cash flows from financing activities: | ||||||||
Issuance of stock - net of offering costs | 100,000 | 20,000 | ||||||
Cash received from short term borrowings | 175,000 | 9,158,000 | ||||||
Payment on short term borrowings | (1,730,167 | ) | ||||||
Cash paid for debt financing fees | (826,500 | ) | ||||||
Net cash provided by financing activities | $ | 275,000 | $ | 6,621,333 | ||||
Discontinued Activates: | ||||||||
Net cash used in operating activities | $ | 41,802 | $ | 384,229 | ||||
Net cash used in investing activities | - | (511,603 | ) | |||||
Net cash provided by (used in) discontinued operations | 41,802 | (127,374 | ) | |||||
Net decrease in cash & cash equivalents | (5,968 | ) | (100,086 | ) | ||||
Cash & cash equivalents, beginning balance | 7,205 | 100,086 | ||||||
Cash & cash equivalents, ending balance | $ | 1,237 | $ | - |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 -1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Beyond Commerce, Inc., formerly known as BOOMj, Inc. (the “Company”,” BCI” and “we”), ishas a multi-facetedplanned business serving asobjective to develop, acquire, and deploy disruptive strategic software technology and market-changing business models through selling our own products and the acquisitions of existing companies. We plan to offer a media hub for high traffic web properties,cohesive digital product and owns and operates synergistic technology, in Ad Networking, and E-Commerce. Our initial business was BOOMj.com, Inc. a niche portal and social networking site for Baby Boomers and Generation Jones.This migrated into our E-Commerceservices platform known as i-SUPPLY, an online storefront that offered easy to use, fully customizable E-commerce services, and revenue solutions for any third party Web site large or small, and hosted local ads, providing extensive reach for our proprietary advertising partner network platform.
Basis of Presentation
The condensed consolidated financial statements and the notes thereto for the periods ended September 30, 20102020 and 20092019 included herein include the accounts of the Company, its wholly-owned subsidiaries Service 800 Inc., Path UX and IDriveYourCar (which have been discontinued) and Customer Centered Strategies, LLC, which the Company has an 80% investment interest. These financial statements have been prepared by management and are unaudited. Such condensed financial statements reflect, in the opinion of management, all adjustments necessary to present fairly the financial position and results of operations as of and for the periods indicated and in order to make the financial statements not misleading. All such adjustments are of a normal recurring nature except for those pertaining to the divestiture described in Note 15, the acquisition described in Note 16 and related to the derivatives in Note 7 and 8. These interim results are not necessarily indicative of the results for any subsequent period or for the fiscal year ending December 31, 2010.
Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2009 in the Form 10-K, filed with the SEC on April 21, 2010.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 2 -2. SELECTED ACCOUNTING POLICIES
Interim Financial Statements
These unaudited condensed consolidated financial statements as of accounting, we record our original investment at cost and periodically adjust it for the nine (9) months ended September 30, 2020 and 2019, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America.
These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s proportionate share ofconsolidated financial statements and notes thereto for the investees’ net income or lossyears ended December 31, 2019 and 2018, respectively, which isare included in the line item “LossCompany’s December 31, 2019 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on April 14 , 2020. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the nine (9) months ended September 30, 2020 are not necessarily indicative of results for the entire year ending December 31, 2020.
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from equity method investee”those estimates.
Estimates are used in the consolidated statementsdetermination of operations. Any excessdepreciation and amortization and the valuation for non-cash issuances of equity instruments, income taxes, and contingencies, among others. Actual results could differ materially from these estimates.
Cash and Cash Equivalents
The Company classifies as cash and cash equivalents amounts on deposit in banks and cash temporarily in various instruments with original maturities of nine months or less at the carrying valuetime of the investment over the underlying net equity of the investeepurchase. The Company’s cash management system is evaluated each reporting period for impairment.
Fair Value of Financial Instruments
The carrying value of the current assets and liabilities approximate fair value due to their relatively short maturities except for certain of the short-term borrowings which are net of a $92,899 debt discount in 2010 and $776,122 in 2009.maturities.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Fair Value Measurements
Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Financial Accounting Standards Board (FASB) issued additional disclosure requirementsCompany disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for fair value measurements. The guidance requires previous fair value hierarchy disclosures to be further disaggregated by class of assets and liabilities. A class is oftenliabilities qualifying as financial instruments are a subsetreasonable estimate of assets or liabilities within a line item in the statement of financial position. In addition, significant transfers between Levels 1 and 2 of the fair value hierarchy are required to be disclosed. These additional requirements became effective January 1, 2010 for quarterly and annual reporting. These amendments did not have an impact on the consolidated financial results as this guidance relates only to additional disclosures. In addition, the fair value disclosure amendments also require more detailed disclosures of the changes in Level 3 instruments. These changes will be effective January 1, 2011 and are not expected to have an impact on the consolidated financial results as this guidance only relates to additional disclosures.
The Company applies the fair value hierarchy as established by US GAAP. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure the fair value as follows.
• Level 1 – quoted prices in active markets for identical assets or liabilities.
• Level 2 – other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
• Level 3 – significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
|
| September 30, 2020 Fair Value Measurements |
| |||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total Fair |
| ||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities |
| $ |
|
|
| $ | - |
|
| $ | 1,847,325 |
|
| $ | 1,847,325 |
|
Total |
| $ |
|
|
| $ | - |
|
| $ | 1,847,325 |
|
| $ | 1,847,325 |
|
|
| December 31, 2019 Fair Value Measurements |
| |||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total Fair |
| ||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities |
| $ |
|
|
| $ | - |
|
| $ | 1,433,403 |
|
| $ | 1,433,403 |
|
Total |
| $ |
|
|
| $ | - |
|
| $ | 1,433,403 |
|
| $ | 1,433,403 |
|
Derivative liability as of December 31, 2019 | $ | $1,433,403 |
Change in derivative liability during the period | 5,219,055 | |
Reclassed to additional paid in capital for notes converted into shares of common stock | (6,157,660) | |
Derivative related expenses - other | 1,352,527 | |
Balance at September 30, 2020 | $ | 1,847,325 |
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Revenue Recognition
The Company recognize revenue in accordance with FASB ASC Subtopic 606-10, Revenue Recognition. We recognize revenue as we transfer control of deliverables (products, solutions and services) to our customers in an amount reflecting the consideration to which we expect to be entitled. To recognize revenue, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. We account for a contract based on the terms and conditions the parties agree to, the contract has commercial substance and collectability of consideration is probable. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience.
The majority of the Company’s revenue is generated by the completion of a survey. Revenue is recognized and customers are billed at the point in time a survey occurs or when a related service is complete. The Company may require a deposit from new customers for set up costs or as down payments. These amounts are not significant to the financial statements. Revenue is no longer reflected from PathUX’s and iDriveYourCar subsidiaries, which matches professional chauffeurs with passengers who want to be driven in their own car within the New York City area as this these entities are in the process of being sold. The Company maintains an exclusive network independent drivers. Revenue is complete when the services are provided traditionally through credit card payments.
Accounts receivable
The Company’s accounts receivable arise primarily from the sale of the Company’s products. On a periodic basis, the Company evaluates each customer account and based on the days outstanding of the receivable, history of past write-offs, collections, and current credit conditions, writes off accounts it considers uncollectible. With most of our retail and distribution partners, invoices will typically be due in 30 or 45 days. The Company does not accrue interest on past due accounts and the Company does not require collateral. Accounts become past due on an account-by-account basis. Determination that an account is uncollectible is made after all reasonable collection efforts have been exhausted. The Company has not provided any sales allowances for September 30, 2020 and December 31, 2019.
Property and Equipment
Property and equipment are carried at cost, and are being depreciated using the straight-line over the estimated useful lives as follows:
Equipment, Furniture and fixtures | 5-7 years |
Software | 16-60 months |
Vehicles | 7 years |
When retired or otherwise disposed, the carrying value and accumulated depreciation of the property and equipment is removed from its respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed as incurred.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Valuation of Derivative Instruments
ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts, and recognizes a net gain or loss on debt extinguishment.
Management considersused the following inputs to value the Derivative Liabilities for the nine months ended September 30, 2020:
September 30, 2020 Derivative Liability | |
Expected term | 1 year to 2.5 years |
Exercise price | $ 0.00015-$0.001 |
Expected volatility | 214%-273 % |
Expected dividends | None |
Risk-free rate | 0.12% to 0.16 % |
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities.
Purchase Price Allocation
In accordance with ASC 805, Business Combinations, the Company recorded the assets acquired and liabilities assumed at their respective estimated fair values as of their respective acquisition dates, based on internal company and independent evaluations. The total estimated purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Intangible Assets
Goodwill
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35-21, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be Level 3 liabilities. There were no movements between levels during 2010held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or 2009. Atfair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During the nine month periods ended September 30, 20102020 and December 31, 20092019, the Company did not recognize any impairment charges.
We may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income of the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets may not be realized.
The Company follows the guidance of ASC 740-10-25 in determining whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company had outstanding derivativeno material adjustments to its liabilities for unrecognized income tax benefits.
Stock Based Compensation
During the three months ended September 30, 2020 and 2019, the Company did not issue any stock options for employee compensation. The former stock based compensation plan expired on September 11, 2018.
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The new guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Early adoption is permitted in interim periods, including those from related partiesperiods for which financial statements have not been issued or financial statements have not been made available for issuance. The adoption of $2,150,867and $2,606,105
The Company will continue to monitor these emerging issues to assess any potential future impact on its internet website. Revenue for this subsidiary is recorded pursuant to FASB Topic 605 Revenue Recognition, when persuasive evidence of arrangement exists, delivery of services has occurred, the fee is fixed or determinable and collectability is reasonably assured.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 3 -3. GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. DuringBecause of recent events, the three and nine months endedCompany cannot state with certainty of its ability to continue. The accompanying consolidated financial statements for September 30, 2010,2020 and 2019 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company generated a consolidated net gainof $1,895,881and a consolidated net loss of $791,796 respectively. As of September 30, 2010, there is an accumulated deficit of $31,071,512andhas suffered losses from operations and has a working capital deficiency of $12,958,947. The Company will need todeficit, which raise additional capital and/or obtain financing in order to continue its operations. In addition, certain secured promissory notes matured on January 31, 2010 and we were unable to pay our secured convertible promissory note holders the amounts due to them. Under the terms of the notes, the holders may at any time elect to declare a default and foreclose on essentially all of our assets. In addition, promissory notes that we issued to OmniReliant alsocontain cross default provisions, such that those notes are also in default due to the default on the secured convertible promissory notes. The total principal amount outstanding on these notes as of September 30, 2010 was $1,623,322 and as of October 15th were in payment default. In addition, in February and June 2010, the US Treasury placed liens on essentially all of the assets of Boomj.com Inc. because of approximately $900,000 of unpaid payroll taxes. These factors, and our lack of ability to meet our obligations from current operations, and the need to raise additional capital to accomplish our objectives, create a substantial doubt about ourits ability to continue as a going concern.
NOTE 4 – DISCONTINUED OPERATIONS
PathUX, LLC
Furthermore, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Robert Bisson on June 4, 2019, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Christian Schine on June 4, 2019, and the 7,000,000 shares of Beyond Commerce’s restricted common stock issued to Ryan Rich on June 4, 2019, were released from any further claims. As Beyond Commerce had not paid any additional funds to the previous owners of PathUX and the extension period had expired, the Company has forfeited the 70,000,000 shares valued at $427,000 which were reflected in the December 31, 2019 financial statements.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Income (loss) from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of the PathUX business which is presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019, are as follows:
|
| Three months ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
| ||
Total net sales |
| $ | - |
|
| $ | 623,629 |
|
Cost of sales |
|
| - |
|
|
| 412,464 |
|
Operating, selling, general and administrative expenses |
|
| - |
|
|
| 128,522 |
|
Amortization of software |
|
| - |
|
|
| 134,686 |
|
Income (loss) from discontinued operations |
|
| - |
|
|
| (52,043) |
|
Gain on sale of discontinued operations |
|
| - |
|
|
| - |
|
Income tax provision |
|
| - |
|
|
| - |
|
Discontinued operations, net of tax |
|
| - |
|
|
| (52,043) |
|
|
| Nine months ended September 30, |
| |||||
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
| ||
Total net sales |
| $ | 219,867 |
|
| $ | 694,672 |
|
Cost of sales |
|
| 147,829 |
|
|
| 467,892 |
|
Operating, selling, general and administrative expenses |
|
| 91,134 |
|
|
| 132,942 |
|
Amortization of software |
|
| 134,686 |
|
|
| 134,686 |
|
Income (loss) from discontinued operations |
|
| (153,781) |
|
|
| (40,849) |
|
Gain on sale of discontinued operations |
|
| 504,482 |
|
|
| - |
|
Income tax provision |
|
| - |
|
|
| - |
|
Discontinued operations, net of tax |
|
| 350,700 |
|
|
| (40,849) |
|
The following table presents the amounts reported in the Consolidated Condensed Balance Sheets as held for sale related to the PathUX Assets as of December 31, 2019. As the sale was finalized shortly after close of the first quarter 2020, the current balance sheet no longer reflects these operations.
| December 31, | |
| 2019 | |
Current assets |
| |
Cash & cash equivalents | $ | 95,470 |
Accounts receivable - net |
| 18,000 |
Total current assets |
| 113,470 |
Proprietary Software, net |
| 972,289 |
Intangible asset |
| 1,722,796 |
Assets held for sale | $ | 2,808,555 |
|
|
|
Current liabilities | $ | 159,255 |
Contingent acquisition liability - short term |
| 1,951,205 |
Contingent acquisition liability - long term |
| 1,048,795 |
Liabilities of assets held for sale | $ | 3,159,255 |
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 5 - PROPERTY, WEBSITESOFTWARE AND COMPUTER EQUIPMENT
Property and equipment at September 30, 20102020 and December 31, 20092019 consisted of the following unaudited:
2010 | 2009 | |||||||
Office and computer equipment | $ | 166,054 | $ | 275,122 | ||||
Website | 1,184,566 | 776,436 | ||||||
Total property, website and computer equipment | 1,350,620 | 1,051,558 | ||||||
Less: accumulated depreciation | (673,511 | ) | (517,571 | ) | ||||
Total property, website and computer equipment | $ | 677,110 | $ | 533,987 |
|
| September 30, 2020 |
|
| December 31, 2019 |
Office and computer equipment | $ | 25,003 |
| $ | 22,214 |
Furniture and fixtures |
| 17,888 |
|
| 4,448 |
Software |
| 20,822 |
|
| 20,822 |
Total property, software and computer equipment |
| 63,713 |
|
| 47,484 |
Less: accumulated depreciation |
| (20,606) |
|
| (10,016) |
| $ | 43,107 |
| $ | 37,468 |
Depreciation expense for the three and nine month periods ended September 30, 2020 was $3,816 and $10,591, respectively compared to $ 10,591 and $132,824 for the same periods in 2019, respectively.
NOTE 5 - OTHER6 – INTANGIBLE ASSETS
Intangible net assets of the Company at September 30, 20102020 and December 31, 2009 consisted of the following unaudited:
2010 | 2009 | |||||||
Prepaid commissions | $ | - | $ | 294,872 | ||||
Credit Card processor retentions | 11,259 | 132,606 | ||||||
Other | 25,913 | 91,199 | ||||||
Total | $ | 37,172 | $ | 518,677 |
2010 | 2009 | |||||||
Rent Deposits | $ | 25,985 | $ | 31,763 | ||||
Credit Card Reserve | 431 | 20,084 | ||||||
Vendor Deposit | 2,928 | 10,357 | ||||||
TOTAL | $ | 29,344 | $ | 62,204 |
2010 | 2009 | |||||||
Accrued interest | $ | 648,349 | $ | 508,554 | ||||
Accrued interest - related party | 374,970 | 180,720 | ||||||
Accrued commission | - | 7,272 | ||||||
Accrued payroll and related expenses | 728,635 | 523,240 | ||||||
Accrued payroll and related expenses – related party | 79,310 | |||||||
Payroll tax liability | 1,015,945 | 1,018,325 | ||||||
Credit Cards | 106,480 | 84,682 | ||||||
Other | 170,063 | 65,757 | ||||||
Other- related party | 35,600 | 70,666 | ||||||
Total other current liabilities | $ | 3,159,352 | $ | 2,459,216 |
NOTE 7 - SHORT TERM BORROWINGS – unaudited | 9/30/2010 | 12/31/2009 | ||||||
Note payable to Carole Harder bearing an annual interest rate of 12%, unsecured, due 1/31/10* | $ | 190,000 | $ | 190,000 | ||||
Convertible Promissory Notes, bearing an annual interest rate of 12%, secured, due 1/31/10* | 1,910,000 | 2,210,000 | ||||||
Convertible Promissory Notes, bearing an annual interest rate of 18%, secured, due 5/16/10 | 1,333,333 | 1,333,333 | ||||||
Convertible Promissory Notes due 10/15/2010 | 141,663 | 141,663 | ||||||
Convertible Promissory Notes due 10/15/2010 | 291,665 | 291,665 | ||||||
Convertible Promissory Notes due 10/15/2010 | 116,666 | 116,666 | ||||||
Convertible Promissory Notes due10/15/2010 | 373,332 | 373,332 | ||||||
Convertible Promissory Notes due 10/15/2010 | 699,996 | 699,996 | ||||||
Sundry Bridge Notes, bearing an annual interest rate 12%, unsecured, due - 1/31/2010* | 200,000 | 1,000,000 | ||||||
Convertible Promissory Notes due 2/26/2011 | 150,000 | - | ||||||
Total principal | $ | 5,406,655 | $ | 6,356,655 | ||||
Less: unamortized debt discount | (92,899 | ) | (776,122 | ) | ||||
Net balance | $ | 5,313,756 | $ | 5,580,533 |
|
| September 30, December 31, | |||||
|
| 2020 |
|
| 2019 | ||
Tradename-Trademarks |
| $ | 460,644 |
|
| $ | 501,692 |
Assembled Workforce |
|
| 341,335 |
|
|
| 371,751 |
IP/Technology |
|
| 120,267 |
|
|
| 146,667 |
Customer Base |
|
| 1,328,189 |
|
|
| 1,449,205 |
Non-Competition agreements |
|
| 47,104 |
|
|
| 131,892 |
Customer Relationships - CCS |
|
| 480,356 |
|
|
| 535,876 |
Total intangible assets |
| $ | 2,777,895 |
|
| $ | 3,137,083 |
Amortization expense for the three shareholdersand nine month periods ended September 30, 2020 was $100,422$120,436 and was converted into 717,500 shares of$361,309, respectively compared to $103,371 and $241,358 for the Company common stock.
NOTE 8 - 7. OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
Accrued interest - notes |
| $ | 313,818 |
|
| $ | 149,873 |
|
Total other current liabilities |
| $ | 313,818 |
|
| $ | 149,873 |
|
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 8. SHORT- AND LONG-TERM BORROWINGS
Short-term and Long-term borrowings, consist of the following: |
| September 30, |
|
| December 31, |
| ||
Short term debt; |
| 2020 |
|
| 2019 |
| ||
Convertible Promissory Notes, bearing an annual interest rate of 15% secured, due 02/14/2019 |
| $ | 5,000 |
|
| $ | 50,000 |
|
Convertible Promissory Notes, bearing an annual interest rate of 12% secured, due 08/27/2019 |
|
| 97,259 |
|
|
| 199,181 |
|
Short-Term Note – Jean Mork Bredeson cash deficit holdback, 15%, past due |
|
| 210,000 |
|
|
| 210,000 |
|
Short-Term Note – Jean Mork Bredeson purchase allocation, 15%, past due |
|
| 1,409,169 |
|
|
| 1,381,914 |
|
Funding from the Payroll Protection Program, annual interest of 1%, due 04/24/2022 |
|
| 500,000 |
|
|
| - |
|
Convertible Promissory Notes, bearing an annual interest rate of 8% secured, due 08/07/2020 |
|
| 1,044,486 |
|
|
| 1,467,869 |
|
Total short-term debt |
|
| 3,265,914 |
|
|
| 3,308,964 |
|
|
|
|
|
|
|
|
|
|
Long term debt; |
|
|
|
|
|
|
|
|
Convertible Promissory Notes, bearing an annual interest rate of 5.0%, due 12/31/22 |
|
| 350,000 |
|
|
| 350,000 |
|
Promissory Note – Jean Mork Bredeson, interest rate 5.5%, due 2/28/2022 |
|
| 2,100,000 |
|
|
| 2,100,000 |
|
Senior Secured Redeemable Debenture, bearing an annual interest rate of 16%, due 12/31/2021 |
|
| 863,760 |
|
|
| 900,000 |
|
Total short-term and long-term borrowings, before debt discount |
|
| 6,579,674 |
|
|
| 6,658,964 |
|
Less debt discount |
|
| (150,529) |
|
|
| (824,417) |
|
Total short-term and long-term borrowings, net |
| $ | 6,429,145 |
|
| $ | 5,834,547 |
|
Short-term and Long-term borrowings, consist of the following: |
|
|
|
|
|
|
|
|
Short-term borrowings – net of discount |
|
| $ | 3,265,914 |
|
| 2,714,762 |
|
Long-term borrowings – net of discount |
|
|
| 3,163,231 |
|
| 3,119,785 |
|
Total Short-Term and long term borrowings – net of discount |
|
| $ | 6,429,145 |
|
| 5,834,547 |
|
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
On August 7, 2018, we entered into a securities purchase agreement (“SPA”) with Discover Growth Fund, LLC (“Discover”), pursuant to which we issued a senior secured redeemable convertible debenture in the principal amount of $2,717,391 (of which $217,391 was retained by Discover as an original issue discount) (the “Debenture”), in exchange for $500,000 cash consideration and a promissory note issued to BYOC in the amount of $2,000,000 (the “Note”).
The Debenture is subject to interest at a rate of 8.0% per annum and can be converted into shares of the Company’s common stock at a price equal to the lower of (i) $0.15 per share of common stock, and (ii) if there has never been a trigger event (as defined in the Debenture), (A) the average of the 5 lowest individual trades of the shares of common stock, less $0.01 per share, or following any such trigger event, (B) 60% of the foregoing. However, at no time can the debenture be converted at a price below $0.001 per share.
During the fiscal year 2019, Discover Growth Fund LLC issued the additional $2,000,000 to the Company and converted $1,249,522 of the aggregate debt. During the nine months ended September 30, 2020, Discover Growth Fund LLC converted $423,383 of their outstanding debt.
On September 14, 2018, the Company issued a short-term convertible note payable for $50,000. The note was originally due on February 14, 2019 and bears interest at a rate of 15% per annum. The note is convertible into shares of common stock at $0.10 per share. The company is currently negotiating an extension with the noteholder and has paid $45,000 of the outstanding debt, leaving a remaining principal balance due of $5,000. This note is currently past due and is being negotiated to cure, nevertheless this note has no default provisions.
On November 27, 2018, the Company received funding in conjunction with a convertible promissory note and a security purchase agreement dated November 27, 2018, in the amount of $250,000. The lender was Auctus Fund LLC. The notes have a maturity of August 27, 2019 and interest rate of 12% per annum and are convertible at a price of 60% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the twenty-five (25) trading days immediately prior to conversion. Additionally, If the stock price falls below par value , additional shares will be issued at the lower conversion rate so that stocks continue to be issued at par value. The note may be prepaid but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The Company is currently negotiating an extension with the noteholder as it is currently past due. As a result of a default provision, the interest rate has increased to 24%. The Company during 2020 issued 980,000,000 shares of its common stock which reduced the principal by $101,922 and paid interest of $39,777.
Effective February 28, 2019 as a component of the closing of the business combination between Beyond Commerce, Inc. and Service 800, Jean Mork Bredeson, Founder and President of Service 800, the Company issued a $2,100,000 three-year 5.5% promissory note. Interest only payments are required during the first year of the note. The $2,100,000 promissory note is personally guaranteed by George Pursglove which in turn will be Geordan Pursglove since the passing of the former Chief Executive Officer.
As a component of the Service 800 transaction, in lieu of the entire cash payment of $2,100,000 being made to Ms. Bredeson, a $210,000 amount was to be withheld until May 30, 2019 and continues to be outstanding. This note does not carry any interest obligations. Also, as all cash and accounts receivables at the effective date of the closing were to be retained by Ms. Bredeson this allocation of cash is to be distributed quarterly on a non interest basis as true-ups are derived, which amounted to $1,409,169 as of September 30, 2020. Although holdbacks did not initially include interest obligations, we agreed to begin accruing interest at 10% in September 2019, and then 15% in October 2019 if we past an agreed repayment date.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
On December 31, 2019, Beyond Commerce, Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Securities Purchase Agreement”) with TCA Special Situations Credit Strategies ICAV, an Irish collective asset vehicle (the “Buyer” or “TCA ICAV”), and TCA Beyond Commerce, LLC, a Wyoming limited liability company (“TCA Beyond Commerce”), pursuant to which the Buyer purchased from the Company a senior secured redeemable debenture having an initial principal amount of $900,000 and an interest rate of 16% per annum (the “Initial Debenture”). The Initial Debenture, and any future debentures that may be purchased by Buyer pursuant to the Securities Purchase Agreement (the “Additional Debentures”), is secured through an unconditional and continuing security interest in all of the assets and properties, including after acquired assets, of the Company and each of its subsidiaries, which are acting as guarantors with respect to the Company’s obligations under the Initial Debenture and any Additional Debentures, pursuant to that certain Security Agreement, dated December 31, 2019, entered into by the Company and TCA Beyond Commerce in favor of the Buyer (the “Security Agreement”). In addition, Geordan Pursglove, the Company’s CEO, delivered a personal guaranty with respect to the Company’s obligations under the Securities Purchase Agreement. The maturity date on this security is December 31, 2021. During the three months ended September 30, 2020 the Company paid $ 36,240 to reduce the loan balance.
TCA Beyond Commerce entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”), whereby TCA Beyond Commerce acquired 100% of the authorized and issued membership interests of CCS from its sole member (the “CCS Seller”). TCA Beyond Commerce acquired the membership interests for a purchase price of $525,000 (the “CCS Purchase Price”), with $175,000 to be paid in cash and the remaining $350,000 to be paid through TCA Beyond Commerce’s issuance of a convertible promissory note with an original principal of $350,000 and a conversion feature that provides the CCS Seller with the right to convert outstanding principal and accrued interest into shares of the Company’s common stock at a price based on the 10-day trailing average price of the Company’s stock. The cash maturity date is December 31, 2022.
On April 24, 2020 the Company through its Service 800 Inc subsidiary, received $500,000 in funding in conjunction with a promissory note under the Payroll Protection Program is made pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). After sixty (60) days from the date the Loan is funded, but not more than twenty-four (24) weeks from the date the Loan is funded, Borrower shall apply to Bank for loan forgiveness. If the SBA confirms full and complete forgiveness of the unpaid balance of the Loan, and reimburses Bank for the total outstanding balance, principal and interest, Borrower’s obligations under the Loan will be deemed fully satisfied and paid in full. If the SBA does not confirm forgiveness of the Loan, or only partly confirms forgiveness of the Loan, or Borrower fails to apply for loan forgiveness, Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the Loan, including principal and interest, and in such case, Bank will establish the terms for repayment of the Loan Balance in a separate documentation to be provided to Borrower, which letter will set forth the Loan Balance, the amount of each monthly payment, the interest rate (not in excess of a fixed rate of one per cent (1.00% per annum), the term of the Loan, and the maturity date of two (2) years from the funding date of the Loan. No principal or interest payments will be due prior to the end of the Deferment Period. Because we anticipate the note being forgiven within the next year it is classified as short term
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 9.COMMON STOCK, WARRANTS AND PAID IN CAPITAL
Common Stock
During the ninemonth periodnine months ended September 30, 2010.
Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.
Preferred Stock
We are authorized to issue up to 250,000,000 shares of our “blank check” preferred stock, par value of $0.001. Effective July 27, 2017, we designated 250,000,000 of our “blank check” preferred shares as Series A Preferred Stock, all of which are issued 700,000 sharesand outstanding. Each share of Series A Preferred Stock entitles its holder to (i) cumulative, non-participating dividends in preference and priority to any declaration or payment of a dividend on any of the Company’s unrestricted common stock, valued at $21,000 for professional services received.
Following cancellation of 100 shares of unrestrictedSeries A preferred stock, such 100 shares of commonpreferred stock were returned to an investor for conversion of $50,000 note payable and accrued interest.
Exercise Price | Outstanding December 31st, 2009 | Issued in 2010 | Transferred/ Exercised | Outstanding September 30, 2010 | ||||||||||||||
$ | 0.01 | 113,520 | (1) | 113,520 | ||||||||||||||
$ | 0.10 | 109,008,215 | 1,500,000 | 55,000 | 110,563,215 | |||||||||||||
$ | 0.30 | 30,300 | 30,300 | |||||||||||||||
$ | 0.50 | 101,000 | (1) | 101,000 | ||||||||||||||
$ | 0.70 | 1,244,116 | (15,000 | ) | 1,229,116 | |||||||||||||
$ | 0.90 | - | ||||||||||||||||
$ | 0.93 | 3,127,860 | 3,127,860 | |||||||||||||||
$ | 1.00 | 2,743,246 | (40,000 | ) | 2,703,246 | |||||||||||||
$ | 2.40 | 132,310 | (1) | 132,310 | ||||||||||||||
116,500,567 | 1,500,000 | - | 118,000,567 |
Option Group | Outstanding December 31, 2009 | Issued Ninemonths ended September 30, 2010 | Terminated/ Transferred/ Exercised | Outstanding September 30, 2010 | ||||||||||||||
$ | .10-.49 | 468,500 | 1,500,000 | (150,500 | ) | 1,818,000 | ||||||||||||
$ | .50-.69 | 873,274 | - | (773,274 | ) | 100,000 | ||||||||||||
$ | .70-.89 | 1,098,602 | - | (553,602 | ) | 545,000 | ||||||||||||
$ | .90-.99 | 686,844 | - | (661,844 | ) | 25,000 | ||||||||||||
$ | 1.00-1.25 | 770,694 | - | (365,694 | ) | 405,000 | ||||||||||||
$ | 1.26-1.70 | 219,637 | - | (209,637 | ) | 10,000 | ||||||||||||
4,117,551 | 1,500,000 | (2,714,551 | ) | 2,903,000 |
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Warrants
The Company recorded a share-based compensation expense of $82,068 and $213,814 for the three months ended September 30, 2010 and 2009, respectively. The Company recorded a share-based compensation expense of $259,805 and $1,718,290 for the nine months ended September 30, 2010 and 2009, respectively.
Pursuant to the change in fair value at the timeterms of the modification. The modification resulted in an increase in fair value of approximately $6,000 which is being amortized over the remaining vesting period of those options.
As of September 30, 2020, these warrants have vested.
NOTE 10. COMMITMENTS AND CONTINGENCIES
Legal Matters
A complaint against the Company, dated February 5, 2020, has been filed in Hennepin County, Minnesota, by Jean Mork Bredeson, the former President and former owner of Service 800, making certain claims related to the Company's acquisition of Service 800, seeking in excess of $1.6 million in damages. On March 16, 2020, the Company and Service 800 filed an answer, counterclaim and third-party claim against Ms. Bredeson and defendants Allen Bredeson and Jeff Schwedinger, former employees of Service 800. Answers and Affirmative and Additional Defenses to Third Party Claims were filed by Mr. Bredeson on April 7, 2020 and by Mr. Schwedinger on April 9, 2020 and, on April 24, 2020, Ms. Bredeson filed a Motion to Dismiss. The Court denied in full Ms. Bredeson’s motion to dismiss or for a more definite statement. Subsequently, using a wholly owned entity she controls, Ms. Bredeson filed another matter, captioned Green Valley Associates Inc. vs Service 800 Inc., 27-CV-20-13800. Although Ms. Bredeson is seeking to have the matters handled by separate judges, the Company is seeking consolidation of the two matters before Judge Klein, the judge who denied Ms. Bredeson's motion to dismiss. Ms. Bredeson also has since filed, and then withdrawn, other motions, without allowing them to reach Judge Klein. Discovery is ongoing, but we expect the matter will continue for another six months and hasbefore substantive motions. An early attempt at mediation was unsuccessful, but another attempt at the end of discovery may be more fruitful. In the interim, the Company is continuing to vigorously defend itself against this lawsuit.
In addition to the above, from time to time, we may be involved in litigation in the ordinary course of business. Other than as set forth above, we are not currently involved in any litigation that we believe could have a termmaterial adverse effect on our financial condition or results of 5 years and (2) a second optionoperations. Other than as set forth above, to acquire 75,000 sharesour knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, (withany of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Operating Lease
We currently lease virtual office space at 3773 Howard Hughes Parkway, Suite: 500 Las Vegas, NV 89169. We pay an annual fee of $120 for this lease. In February of 2020 the same termsCompany moved its Service 800, Inc. subsidiary to 110 Cheshire Lane, Minnetonka Minnesota 55305. Service 800 leases 3,210 square feet of office space under an operating lease agreement with Carlson Center East LLC. The lease, which expires in February 2021, requires base monthly rents of $4,160, plus operating expenses.
NOTE 11. RELATED PARTIES
As of September 30, 2020, 206,249,900 shares of BCI’s Series A Convertible 12% Cumulative Preferred stock are held by The 2GP Group LLC, an entity controlled by Geordan Pursglove, President, CEO and Director. The Series A Convertible 12% Cumulative Preferred stock include a three times (3x) voting preference.
During the fourth quarter 2019 the Company canceled 100 shares of Series A preferred stock, such 100 shares of preferred stock were returned to treasury, increasing the number of shares of authorized undesignated preferred stock from 0 to 100. The Board designated 51 of such 100 shares as Series B Preferred. Each share of Series B Preferred carries approximately 1% of the first option except forvoting power, but these shares do not have any economic rights. On October 2, 2019, the vesting) for each $100,000 in cumulative EBITDA over anyBoard issued 20 shares of the Series B Preferred to Geordan Pursglove. An additional 13 shares of Series B Preferred was issued to Geordan Pursglove on August 4, consecutive quarters achieved through the executives efforts using the current resources2020. The remaining 18 shares of Adjuice, Inc.Series B Preferred are authorized but unused. There are 49 shares of authorized but undesignated preferred stock. The Company used a Black Scholes model to value the first option with a total value of approximately $130,000. The Company has determined that under a probability weighted evaluation thatthe 2019 transaction is $293,000 based on an independent valuation of the transaction and the value of the second optionAugust 4, 2020 transaction is clearly immaterial and no value was recorded at inception. Should the likelihood of issuance increase in future quarters, additional expense will be recorded at that time. The second option was not included in the table above.
On May 8, 2019, the Company issued a short-term convertible notesnote payable to a board member for $54,000. The note had a sixty- day term which was due on July 8, 2019 and warrants that contained reset provisions in regards to the associated conversion and exercise features (see Note 7). In accordance with FASB guidance related to the valuationbears interest at a rate of convertible notes and warrants with conversion features and/or exercise features that can reset the conversion and/or exercise price based on future equity transactions, the Company valued the warrants and conversion feature of the notes and warrants and bifurcated them from the host contracts as a derivative by recognizing additional liability for the fair value assigned to those derivative features.
NOTE 9 - COMMITMENTS and CONTINGENCIES
2010 | 2009 | |||||||
Operations: BoomJ.com dba I-Supply | ||||||||
Net Sales | $ | 297,158 | $ | 409,051 | ||||
Gross Margin | 283,015 | 345,614 | ||||||
Depreciation | (134,335 | ) | (145,041 | ) | ||||
Assets | 251,969 | 517,802 | ||||||
Capital Expenditures | 44,785 | 11,333 | ||||||
Net Loss | (677,748 | ) | (4,662,761 | ) | ||||
Operations: KaChing KaChing (through 4/22/2010) | ||||||||
Net Sales | $ | 205,105 | $ | - | ||||
Gross Margin | 65,613 | - | ||||||
Depreciation | (17,605 | ) | - | |||||
Assets | - | - | ||||||
Capital Expenditures | - | - | ||||||
Net (Loss) Gain | (416,116 | ) | - | |||||
Operations: Adjuice (commencing May 20,2010) | ||||||||
Net sales | $ | 75,101 | $ | - | ||||
Gross Margin | 3,969 | - | ||||||
Depreciation | (36,827 | ) | - | |||||
Assets | 494,600 | - | ||||||
Capital Expenditures | - | - | ||||||
Net (Loss) Gain | (337,130 | ) | - | |||||
Operations: LocalAdLink (Discontinued) | ||||||||
Net sales | $ | 397,405 | $ | 12,299,017 | ||||
Gross Margin | 103,032 | 876,544 | ||||||
Depreciation | - | (50,492 | ) | |||||
Assets | 2,343 | 2,088,816 | ||||||
Capital Expenditures | - | 509,935 | ||||||
Net (Loss) Gain | 60,177 | (4,774,910 | ) | |||||
Consolidated | ||||||||
Consolidated Operations: | ||||||||
Net sales | $ | 577,354 | $ | 409,051 | ||||
Gross Margin | 352,597 | 346,381 | ||||||
Other Operating Expenses | (4,231,452 | ) | (5,936,312 | ) | ||||
Depreciation | (188,767 | ) | (145,041 | ) | ||||
Non-operating income (expense) | 5,894,363 | (5,734,972 | ) | |||||
Income (loss) from discontinued operations | 60,177 | (4,774,910 | ) | |||||
Net (Loss) | (791,796 | ) | (17,114,906 | ) | ||||
Assets | 2,899,717 | 4,840,462 | ||||||
Basic & Diluted Net Loss Per Share | (0.01 | ) | (0.18 | ) | ||||
Capital Expenditures | 44,785 | 120,929 |
2010 | 2009 | |||||||
Operations: BoomJ.com dba I-Supply | ||||||||
Net Sales | $ | - | $ | 240,079 | ||||
Gross Margin | (290 | ) | 197,903 | |||||
Depreciation | (43,128 | ) | (48,473 | ) | ||||
Assets | 251,969 | 517,802 | ||||||
Capital Expenditures | - | 7,642 | ||||||
Net Loss | (393,764 | ) | (1,399,235 | ) | ||||
Operations: KaChing KaChing (through 4/22/10) | ||||||||
Net Sales | $ | - | $ | - | ||||
Gross Margin | - | - | ||||||
Depreciation | - | - | ||||||
Assets | - | - | ||||||
Capital Expenditures | - | - | ||||||
Net (Loss) Gain | - | - | ||||||
Operations: Adjuice (commencing May 20, 2010) | ||||||||
Net sales | $ | 26,464 | $ | - | ||||
Gross Margin | (4,063 | ) | - | |||||
Depreciation | (24,999 | ) | - | |||||
Assets | 494,600 | - | ||||||
Capital Expenditures | - | - | ||||||
Net (Loss) Gain | (176,931 | ) | - | |||||
Operations: LocalAdLink (Discontinued) | ||||||||
Net sales | $ | (2,930 | ) | $ | 1,811,787 | |||
Gross Margin | (2,781 | ) | 412,212 | |||||
Depreciation | - | (50,392 | ) | |||||
Assets | 2,343 | 2,088,816 | ||||||
Capital Expenditures | - | 400,339 | ||||||
Net (Loss) Gain | (9,980 | ) | (450,729 | ) | ||||
Consolidated | ||||||||
Consolidated Operations: | ||||||||
Net sales | $ | 26,454 | $ | 240,079 | ||||
Gross Margin | (4,353 | ) | 197,903 | |||||
Other Operating Expenses | (753,905 | ) | (2,151,477 | ) | ||||
Depreciation | (68,127 | ) | (48,473 | ) | ||||
Non-operating income (expense) | 3,703,156 | ) | (2,002,047 | ) | ||||
Income (loss) from discontinued operations | (9,980 | ) | (450,729 | ) | ||||
Net Income/(Loss) | 1,895,880 | (8,535,345 | ) | |||||
Assets | 2,899,717 | 3,219,204 | ||||||
Basic & Diluted Net Loss Per Share | 0.02 | (0.18 | ) | |||||
Capital Expenditures | - | - |
The Company follows FASCASC 260-10, which requires presentation of basic and diluted EPSEarnings per Share (“EPS”) on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying consolidated financial statements, basic lossnet income (loss) per share of common stock is computed by dividing the net lossincome (loss) by the weighted average number of shares of common stock outstanding during the year. Basic net lossincome (loss) per common share is based upon the weighted average number of common shares outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. However, shares associated with convertible
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
Convertible debt stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e. reduce the net loss per common share). The total number of shares related to the anti-dilutive instruments excluded from the diluted net loss per common share presentation was 171,872,917 and 30,906,562 at September 30, 2010 and 2009, respectively.
The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the nine monthsthree and nine-month period ended September 30, 20102020 and 2009:
2010 | 2009 | |||||||
Numerator | ||||||||
Basic and diluted net loss per share: | ||||||||
Net Income (loss) available to common stock holders | $ | (791,796 | ) | $ | (17,114,906 | ) | ||
Denominator | ||||||||
Basic and diluted weighted average number of shares outstanding | 72,679,602 | 43,737,435 | ||||||
Basic and diluted net loss per share | $ | (0.01 | ) | $ | (0.39 | ) |
|
| Nine-month period ended September 30, |
|
| Three-month period ended September 30, | ||||||
|
| 2020 |
|
| 2019 |
|
| 2020 |
|
| 2019 |
Loss from continuing operations | $ | (10,668,157) |
| $ | (7,072,644) |
| $ | (7,729,449) |
| $ | 1,860,560 |
Income from discontinued operations |
| 350,700 |
|
| (40,849) |
|
| - |
|
| (52,043) |
Consolidated net loss | $ | (10,317,457) |
| $ | (7,113,493) |
| $ | (7,729,449) |
| $ | 1,808,517 |
Weighted average shares used for diluted earnings per share |
| 2,129,022,445 |
|
| 1,176,847,590 |
|
| 2,927,661,679 |
|
| 1,343,286,588 |
Incremental Diluted Shares |
| -* |
|
| -* |
|
| -* |
|
| 2,087,333,969 |
Weighted Average shares used for diluted earnings per share |
| 2,129,022,445 |
|
| 1,176,847,590 |
|
| 2,927,661,679 |
|
| 3,430,620,557 |
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic: continuing operations | $ | (0.01) |
| $ | (0.01) |
| $ | (0.00) |
| $ | 0.00 |
Diluted: continuing operations | $ | (0.01) |
| $ | (0.01) |
| $ | (0.00) |
| $ | 0.00 |
Basic and Diluted: discontinued operations | $ | 0.00 |
| $ | (0.00) |
|
| - |
| $ | (0.00) |
Total Basic | $ | (0.01) |
| $ | (0.01) |
| $ | (0.00) |
| $ | 0.00 |
Total Diluted | $ | (0.01) |
| $ | (0.01) |
| $ | (0.00) |
| $ | 0.00 |
*The shares associated with convertible debt, preferred stock, stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e., reduce the net loss per common share).
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 13 - SUPPLEMENTAL DISCLOSURES OF CASH FLOWS (not described elsewhere)
Description of the Company sold its LocalAdLink Software (the “Software”)Transactions
Service 800, Inc.
On March 4, 2019 Jean Mork Bredeson, Founder and allPresident of theirService 800, Inc., received $1,890,000 in cash, a short-term cash hold back of $210,000 and $2,100,000 in a three-year 5.5% promissory note. The $2,100,000 promissory note is personally guaranteed by the estate of George Pursglove whose executor is Geordan Pursglove Beyond Commerce’s President, CEO. On July 18, 2018, Jean Mork Bredeson received 2,000,000 shares of Beyond Commerce’s restricted common stock, and directed the issuance of 3,000,000 additional shares to three other individuals as part of the business combination as follows: On July 18, 2018, Allen Bredeson, Vice President of Marketing and Client Relations, received 1,000,000 shares of Beyond Commerce’s restricted common stock, Derick White, Vice President of Sales received 1,000,000 shares of Beyond Commerce’s restricted common stock, and Jeff Schwendinger, Vice President of Operations received 1,000,000 shares of Beyond Commerce’s restricted common stock. The effective date of this business combination between Beyond Commerce and Service 800, is February 28, 2019, when Beyond Commerce received 100% of Service 800 stock, assets related toconsisting of the Software including the rights to the name LocalAdLink, the LocalAdLink trademark, the Web site, www.LocalAdLink.com ,company’s website, customer lists, current customer base, and a local search directory and advertising network that brings local advertising to geo-targeted consumers. The Company will continue to sell advertising as it had prior to inception of Local Ad Link, Inc., however on a different scale with a greater emphasis on business to business sales.
2010 | 2009 | |||||||
Sales | $ | 397,405 | $ | 12,299,017 | ||||
Cost of sales | 294,374 | 11,422,463 | ||||||
Gross Profit (Loss) | 103,032 | 876,554 | ||||||
Depreciation | - | (50,492 | ) | |||||
Operating expense | (33,946) | (5,594,936 | ) | |||||
Operating expense - Related Party | - | 509,935 | ||||||
Non-Operating Expenses | (8,908) | 12 | ||||||
Gain (Loss) from discontinued operations | $ | (60,178) | $ | (4,774,910 | ) |
2010 | 2009 | |||||||
Sales | $ | (2,930 | ) | $ | 1,811,787 | |||
Cost of sales | (2,781 | ) | 1,399,575 | |||||
Gross Profit (Loss) | - | 412,212 | ||||||
Depreciation | - | (50,392 | ) | |||||
Operating expense | 2,343 | (406,097 | ) | |||||
Operating expense - Related Party | - | (400,339 | ) | |||||
Non-Operating Expenses | (2,943 | ) | 10 | |||||
Gain (Loss) from discontinued operations | $ | (4,980 | ) | $ | (450,729 | ) |
The fair value of the merger as outlined inpurchase consideration issued to Service 800 Inc. was allocated to the segment reporting.net tangible assets acquired. The Company has reported its pro rata share of Kaching's net lossaccounted for the post merger period onAcquisition as the Condensed Consolidated Statement of Operations in the Non-operating Income (expense) section.
Current assets | $ | 116,145 | ||
Property and equipment, net | 458,321 | |||
Other assets | 37,517 | |||
Total Assets | $ | 611,983 | ||
Current liabilities | $ | 1,852,615 | ||
Long-term debt | 402,732 | |||
Derivative liabilities | 3,789,087 | |||
Total Liabilities | $ | 6,044,434 |
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
The following table summarizes the estimated fair values of the assets acquired and liabilities of KaChing KaChing as of September 30, 2010 was approximately $1,121,801.
Value of considered paid: | |||
Cash at Closing | $ | 2,100,000 | |
Promissory Note - discounted | 1,781,241 | ||
Assets acquired | 3,881,241 |
|
|
| |
Prepaid expenses |
| $ | 28,316 |
Property, plant and equipment |
|
| 47,484 |
Intangible assets |
|
| 2,921,400 |
Goodwill |
|
| 1,299,144 |
Assets acquired |
| $ | 4,296,344 |
|
|
|
|
Liabilities Assumed: |
|
|
|
Accounts payable |
| $ | 121,958 |
Other current liabilities |
|
| 293,145 |
Liabilities assumed |
| $ | 415,103 |
|
|
|
|
Net assets acquired |
| $ | 3,881,241 |
Fair value of consideration given |
| $ | 3,881,241 |
Revenues | $ | 457,650 | ||
Operating expenses | 2,338,823 | |||
Loss from operations | $ | (1,881,173 | ) | |
Non-operating expenses | 3,479,769 | |||
Net loss | $ | (5,360,942 | ) |
BEYOND COMMERCE, INC.:
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
PathUX, LLC
On May 19, 2010April 24, 2020 the Company entered into a Share ExchangeSettlement and Release Agreement (the "Agreement")whereby, effective as of April 1, 2020, the purchase agreement between the former shareholders of PathUX and IDriveYourCar dated May 31, 2019 was effectively unwound, with all assets and liabilities returned to such former shareholders.
Furthermore, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Robert Bisson on June 4, 2019, the 31,500,000 shares of Beyond Commerce’s restricted common stock issued to Christian Schine on June 4, 2019, and the 7,000,000 shares of Beyond Commerce’s restricted common stock issued to Ryan Rich on June 4, 2019, were released from any further claims. As Beyond Commerce had not paid any additional funds to the previous owners of PathUX and the extension period had expired, the Company has forfeited the 70,000,000 shares valued at $427,000 which were reflected in the December 31, 2019 financial statements.
Customer Centered Strategies, LLC. (CCS)
On December 31, 2019 TCA Beyond Commerce, a joint venture which is 80% owned by Beyond Commerce entered into a Membership Interest Purchase, whereby TCA Beyond Commerce acquired 100% of the shareholdersauthorized and issued membership interests of Adjuice, Inc. ("Adjuice"CCS from its sole member. TCA Beyond Commerce acquired the membership interests for a purchase price $525,000 (the “CCS Purchase Price”), with $175,000 to be paid in cash and the remaining $350,000 to be paid through TCA Beyond Commerce’s issuance of a convertible promissory note with an online mediaoriginal principal of $350,000 and marketing company. Undera conversion feature that provides the Agreement,CCS with the Company agreedright to issueconvert outstanding principal and exchange5,100,000accrued interest into shares of itsthe Company’s common stock for all of the issued and outstanding stock of Adjuice. In addition, the Company also agreed to issue 900,000 shares of its common stock to two secured lenders of Adjuice to re-pay in full, and terminate two Adjuice secured loans. The Agreement further contains an earn-out provision that provides for the issuance of an additional 4,450,000 shares from the Company's common stock on the first anniversary of the transaction upon the achievement of certain gross revenue targets by Adjuice, nowat a subsidiary of the Company. The Company has done an evaluation and determined that no provision needs to be recorded for the three month period ended September 30, 2010 due to the high probability that the revenue targets will not be met. The Condensed Consolidated Statement of Operations includes operating activity for Adjuice from the date of the acquisition through September 30, 2010.
In addition to the measurement period (which is not to exceed one year from the acquisition date), the Company is required to recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date. The Company may adjust the preliminaryCCS purchase price, allocation after obtaining additional information regarding, among other things, asset valuations, liabilities assumedthe CCS and revisionsService 800, Inc., entered into an employment agreement whereby the CCS will be employed by Service 800 as Vice President of previous estimates.
The following table summarizes the preliminary allocationestimated fair values of the acquisition purchase price based on the estimated fair value of the acquired assets and assumed liabilities:
Accounts receivable | $ | 77,347 | ||
Other current Assets | 3,353 | |||
Website | 500,000 | |||
Other assets | 3,527 | |||
Assets acquired | 584,227 | |||
Accounts payable and other current liabilities | 93,500 | |||
Loans | 63,000 | |||
Liabilities assumed | 156,500 | |||
Net assets acquired | $ | 427,727 | ||
Fair value of consideration given | $ | 420,000 | ||
Gain recorded | $ | 7,727 |
Assets Acquired: | ||||
Cash | $ | 37,597 | ||
Accounts receivable | 155,626 | |||
Prepaid expense | 2,500 | |||
Intangible asset – customer list | 535,877 | |||
Assets acquired | $ | 731,600 | ||
Accounts payable | $ | 37,817 | ||
Other current liabilities | 37,534 | |||
Liabilities assumed | $ | 75,350 | ||
Net assets acquired | $ | 656,250 | ||
Fair value of consideration given: | ||||
Cash | $ | 175,000 | ||
Convertible note – 5% | 350,000 | |||
Minority interest | 131,250 | |||
Total | $ | 626,250 |
BEYOND COMMERCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of Service 800, Inc. and Customer Centered Strategies occurred on January 1, 2019:
|
| Three Months ended | Nine Months ended | ||||||
|
| September 30, | September 30, | ||||||
|
| 2020 |
|
| 2019 | 2020 | 2019 | ||
Net Revenues |
| $ | 983,155 |
|
|
| $ 1,184,299 | $ 3,012,754 | $ 3,198,814 |
Net (loss) income from operations |
|
| (7,729,449) |
|
|
| 1,829,676 | (10,668,156) | (7,149,815) |
Net (loss) income per share from operations |
|
| (0.00) |
|
|
| 0.00 | (0.01) | (0.01) |
Weighted average number of shares – basic and diluted |
|
| 2,927,661,679 |
|
|
| 1,343,286,588 | 2,129,022,445 | 1,176,847,590 |
NOTE 14. SUBSEQUENT EVENTS
Impact of Disease Outbreak and Management’s Plans
On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new coronavirus as a “pandemic”. First identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries have implemented measures to combat the outbreak which have impacted global business operations.
The majority of the states within the United States have issued a stay at home order to its residents. Accordingly, the Company’s revenues associated with our business model has drastically declined through date of the financial information summarizesstatements and its results of operations, cash flows and financial condition have been negatively impacted by the pandemic.
The impact of the disease outbreak, as of the date of the financial statements, remains highly fluid and uncertain. The Company is unable to predict, with any sort of certainty the timing for the end of the restrictions. Accordingly, the financial impact on the results of operations, for the periods indicated as if the acquisition had been completed as of January 1 of the respective period.
2010 | 2009 | |||||||
Sales | $ | 26,464 | $ | 490,984 | ||||
Cost of sales | 30,527 | 135,802 | ||||||
Gross Profit (Loss) | (4,063 | ) | 355,181 | |||||
Operating expense | (164,090 | ) | (1,122,777 | ) | ||||
Operating expense - Related Party | (8,778 | ) | (84,670 | ) | ||||
Non Operating (Income)/Expenses | (3,703,156 | ) | (6,082,583 | ) | ||||
Net Income/ (Loss) | $ | (176,931 | ) | $ | (3,943,093 | ) |
Sales | $ | 1,021,886 | $ | 417,378 | ||||
Cost of sales | 555,288 | 245,725 | ||||||
Gross Profit (Loss) | 466,588 | 171,653 | ||||||
Operating expense | (2,426,183 | ) | (4,768,511 | ) | ||||
Operating expense - Related Party | (3,220,967 | ) | (115,008 | ) | ||||
Non Operating (Income)/Expenses | (2,191,207 | ) | (5,560,168 | ) | ||||
Net Income/ (Loss) | $ | (2,989,485 | ) | $ | (8,325,109 | ) |
The Company continues to maintain the business working with customers to fit their needs - We are also offering COVID type services. We have clients in the medical field and could severely threaten our abilityare offering to continuedo survey work for them regarding their response for the COVID outbreak so they can document how they are doing as a going concern.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides information that management believes is relevant to an assessment and understanding of our past financial condition and plan of operations. The discussion below should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this date. We undertake no obligation to update or revise any forward-looking statements, whetherannual report.
About Beyond Commerce
Beyond Commerce, Inc. was formed as a result of new information, future events or otherwise. For a discussion of some of the factors that may cause actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information in the “Risk Factors” section in our Form 10-K for the year ended December 31, 2009 and the “Risk Factors” section set forth in Item 1A of Part II of this Report. The identification in this Quarterly Report of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
We never earned any revenue fromplan to operate within two markets: (1) the Business-to-Business Internet Marketing Technology and Services market and (2) the Information Management market. Our goal is to develop proprietary software for digital transformation of clients’ existing content. We believe our former Reel Estate Services internet site,planned platform, strategy, and suite of software products and services will provide secure and scalable information control solutions for global companies. We believe our planned software will assist organizations in September 2007 prior management terminated those operations.
In addition, we plan to provide solutions which facilitate the exchange of information and data transactions between supply chain participants, such as manufacturers, retailers, distributors and financial institutions. The goal is to automate potential client internal processes thereby increasing productivity and lowering costs. We plan to develop proprietary algorithms which it issued 34,458,067 shares of common stockwill embed in the planned software to enable clients to access data and gain insight into their business, through that data, leading to improved internal decision making.
We plan to offer the former shareholders of BoomJ.com, Inc. For financial statement purposes, our acquisition of Boomj.com, Inc. was treatedproposed software through traditional on-premise solutions, SaaS as a reverse acquisitioncloud based solution, or a combination of on-premise, SaaS or cloud based solutions. We plan to work with our clients and their needs as though BoomJ.com, Inc. had acquiredto which delivery method they prefer. We believe giving clients a choice and flexibility will help us since the prior shareholders’ of BoomJ.com, Inc. ended up with a majority ownership into obtain long-term client value.
RESULTS OF OPERATIONS FOR THE THREE- AND NINE-MONTH PERIODS
Through our stock.
Three months ended September 30, 2020 and September 30, 2019.
Revenue
Revenue generated for the three months ended September 30, 2010,2020 was $983,155 as we began reporting revenue being created from both the Service 800 acquisition and a consolidated net loss of $8,090,740Customer Centered Strategies which were included for the entire quarter, however, our customer based growth was paused momentarily in response to the COVID-19 situation. This compares to compared to $1,184,299 revenue from the comparable three-month period in 2019.
Operating Expenses
For three months ended September 30, 2020, operating expenses were $1,654,955 and for the three months ended September 30, 2009.
Non-operating income (expense)
The Company reported non-operating expense of $7,057,649 for the three months ended September 30, 2020, as compared to a income of $2,312,077 for the three months ended September 30, 2019, attributable to the changes in the derivative liability and debt fees associated with our convertible notes and the increase in stock conversion and relative volatility increase in fluctuation.
Net Income (loss)
For three months ended September 30, 2020, the Company incurred a net loss of $7,729,449 as compared to a net income of $1,860,561 for three months end September 30, 2019, which was primarily due to derivative-related income from the changes in liability and debt fees associated with our convertible notes and the increase in stock conversion and relative volatility increase in fluctuation.
Nine months ended September 30, 2020 and September 30, 2019.
Revenue
Revenue generated for the nine months ended September 30, our sales increased2020 was $3,012,754 as we began reporting revenue being created from $168,972both the Service 800 and Customer Centered Strategies acquisition which was closed in 2019 for 2009 to $577,354 for 2010. This increase in sales resulted from sales from our KaChing KaChing and Adjuice operations during the full nine months, ended September 30, 2010. Since we have now disposed of a majority interest in KaChing, we will no longer recognize any revenues that KaChing may hereafter generate. Kaching Kaching generated $27,862 and $205,105 for the three and nine month periods ended September 30, 2010 respectively. There were no sales for Kaching Kaching for the same periods in 2009.
Operating Expenses
For nine months ended September 30, 2020, operating expenses were $4,946,098 and for the nine months ended September 30, 2019, operating expenses were $4,186,003. This increase is mainly attributable to divestiture expensesthe Service 800 and Customer Centered Strategies acquisitions and the related costs associated with these operations within the acquisition process. There was a $202,109 increase in cost of $3,056,764 incurredgoods sold from $996,889 for the nine months ended September 30, 2020 compared to $794,780 in the comparable period. Payroll increased $469,379 from $1,428,344 to $1,897,723 during the nine months ended September 30, 2009 for services provided by a related party in regards2020 and 2019, respectively, due to the KaChing KaChing, Inc. spin-off (see note 15Service 800 and PathUX employee addition, and general and administrative costs increased $91,802 once again due to the Service 800 and Customer Centered Strategies additions..
Non-operating income (expense)
The Company reported non-operating expense of the financial statements included in this quarterly report) and decreased operating costs and employees for the three months and nine months ended September 30, 2010 as compared to three month and nine months period ended September 30, 2009. Included in the SG&A expenses are Kaching Kaching SG&A expensesof $0 and $645,251 for the three and nine month periods ended September 30, 2010 respectively. There were no SG&A expenses for Kaching Kaching for the same periods in 2009. This decrease in staff and facility needs is largely attributable to our reducing costs and a reduction in staff as we conserved our limited cash resources. Our SG&A expenses are expected to gradually increase$8,734,813 during the current fiscal year ending December 31, 2010 as we increase our operations and advertising. Professional fees for the three and nine month periods ended September 30, 2010, including related party, were $376,605 and $1,172,729, respectively. The largest component of professional fees consists of consulting, legal and accounting fees. This reflects adecrease of $433,445 in professional fees as compared to $810,050 for the three month period ended September 30, 2009 and adecrease of $475,451 from $1,648,180 from the nine months ended September 30, 2009. Included in the professional fees and SG&A are non-cash items of $210,000 and $757,272 for the three and nine months ended September 30, 2010 as compared to $213,814 and $1,341,014 for the three and nine month periods ended September 30, 2009 which non-cash items reflect the issuance of stock in exchange for a variety of consulting services and employee options granted. Included in professional fees are Kaching Kaching expenses of $0 and $17,416 for the three and nine month periods ended September 30, 2010 respectively. There were no professional fee expenses for Kaching Kaching for the same periods in 2009.
Net Income (loss)
For nine months ended September 30, 2010 we recognized income related to decreases in derivative liability, which was mainly a result of decreases in2020, the market price of our common stock. The derivative liability is related to our convertible debt, warrants and excess shares. The income recorded for the three and nine months ended September 30, 2010 were $3,088,275 and $585,046, respectively.
Purchase of Significant Equipment
We do not anticipate the need to raise additional capital to accomplish our objectives, create apurchase or sale of any plant or significant equipment during the next twelve (12) months.
Going Concern
There is substantial doubt about our ability to continue as a going concern.
As of September 30, 2010,2020, we had an accumulated deficit of $58,512,832. Since we discontinued operations in 2012 the total amountcontinuity of our short-term borrowings was $5,406,655. Therefuture operations is dependent upon our ability to increase sales and brand awareness. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to continue relying upon the issuance of debt and equity securities to finance our operations. In this regard, we are restricted by the number of shares available for issuance in an equity financing, and we will likely need to increase our authorized capital in order to take advantage of such financing. However, there can be no assurance that we will be ablesuccessful in obtaining shareholder approval to obtain extensions or forbearances from all ofincrease our note holders should we be unable to raise the necessaryauthorized capital, to retire the debt currently outstanding.
Liquidity and Capital Resources
Our ability to continue as a going concern is dependent on our success in obtainingability to raise additional financing from investorscapital and implement our business plan. Since inception, we have been funded by related parties through capital investment and borrowing of funds.
We had total current assets of $1,248,772 and $2,070,852 as of September 30, 2020 and December 31, 2019, respectively. Current assets would consist primarily of cash, accounts receivable and current assets held for sale of $0 and $113,470 as of September 30, 2020 and December 31, 2019, respectively. The Company had a $58,512,832 accumulated deficit on its balance sheet as of September 30, 2020.
We had total current liabilities of $7,673,831 and $8,074,845 as of September 30, 2020 and December 31, 2019, respectively. Current liabilities consisted primarily of the derivative liability, accounts payable, accrued payroll and payroll taxes, contingent acquisition liabilities, related party debt, convertible debt and interest, and the accrued interest, and current liabilities associated with the sale of its securitiesPathUX of $0 and through a continued$2,109,850, respectively as of September 30, 2020 and December 31, 2019. The increase in revenues.
We had a working capital deficit of $6,425,059 and $6,003,993 as of September 30, 2020 and December 31, 2019, respectively. The increase of $421,066 for the period as of September 30, 2020 compared to December 31, 2019 was due to an increase in short term borrowings and derivative liabilities offset by LocalAdLink inthe disposal of discontinued operations.
Cash Flow from Operating Activities
For the nine months ended September 30, 2010 was $41,800 compared to2020 and 2019, cash used in operating activities was $920,073 and cash provided by LocalAdLinkoperations of $127,374 for$77,595 respectively. This increase of cash used is attributable to the Service 800 and Customer Centered Strategies acquisitions and the increase in payroll expenses.
Cash Flow from Investing Activities
For the nine months ended September 30, 2009. In 20102020 and 2019, cash provided used in investing activities was $16,230 and $2,014,096 respectively, which represents cash used in the Service 800 and Customer Centered Strategies acquisition transactions.
Cash Flow from Financing Activities
For the nine months ended September 30, 2020 and 2019, cash provided by financing activities was $446,015 and $2,000,000, respectively, which represents cash from the Discover Growth Fund LLC.
Contractual Obligations
As a “smaller reporting company,” we continueare not required to collectprovide tabular disclosure of contractual obligations.
Inflation
Inflation and changing prices have not had a material effect on credit card reserves established by merchantsour business and we do not expect that inflation or changing prices will materially affect our business in 2009 when we operated the subsidiary. foreseeable future.
Off-Balance Sheet Arrangements
We do not expect significant cash flows in the future as the remaining credit card reserves were approximately $2,000 as of September 30, 2010.
Seasonality
In the past, our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, in the event that we do not engagesucceed in trading activities involving non-exchange traded contracts. In addition, we have no financial guarantees, debt or lease agreements or other arrangements that could trigger a requirement for an early payment or that could change the valuebringing our planned products to market.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets,
Note 2 to the consolidated financial statements, presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, describe the critical accounting estimates and policies used in preparation of our consolidated financial statements. There were no significant changes in our critical accounting estimates during the nine months ended September 30, 2020.
We do not hold any derivative instruments and do not engage in Item 10(f)(1) of SEC Regulation S-K.
Evaluation of disclosureDisclosure Controls and Procedures
Disclosure controls and procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officerPrincipal Executive Officer and principal financial officer, we conducted an evaluationPrincipal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as definedof September 30, 2020. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in Rules 13a-15(e)evaluating and 15d-15(e) underimplementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the Securities Exchange Act of 1934evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report (the “Evaluation Date”). Based upon the evaluation,because we did not document our principal executive officerSarbanes-Oxley Act Section 404 internal controls and principal financial officer concluded as of the Evaluation Date that ourprocedures.
As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures were not effective. Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarizedimplementing and reported within the time periods specified in the SEC’s rules and forms. Disclosuredocumenting our internal controls include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal controls over financial reporting
There was no change in the number of employees we did not have sufficient people to meet the requirements of our internal control over financial reporting. There were no significant changes in the Company's internal controlcontrols over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act)that occurred during the quarter ended September 30, 2010, that haveperiod covered by this report, which has materially affected, or areis reasonably likely to materially affect, our internal controls over financial reporting.
Limitations on the Effectiveness of Controls
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its Principal Executive Officer and its Principal Financial Officer, do not expect that the Company’s disclosure controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and these breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
A complaint against the Company, dated February 5, 2020, has been filed in Hennepin County, Minnesota, by Jean Mork Bredeson, the former President and former owner of Service 800, making certain claims related to the Company's internal control overacquisition of Service 800, seeking in excess of $1.6 million in damages. On March 16, 2020, the Company and Service 800 filed an answer, counterclaim and third-party claim against Ms. Bredeson and defendants Allen Bredeson and Jeff Schwedinger, former employees of Service 800. Answers and Affirmative and Additional Defenses to Third Party Claims were filed by Mr. Bredeson on April 7, 2020 and by Mr. Schwedinger on April 9, 2020 and, on April 24, 2020, Ms. Bredeson filed a Motion to Dismiss. The Court denied in full Ms. Bredeson’s motion to dismiss or for a more definite statement. Subsequently, using a wholly owned entity she controls, Ms. Bredeson filed another matter, captioned Green Valley Associates Inc. vs Service 800 Inc., 27-CV-20-13800. Although Ms. Bredeson is seeking to have the matters handled by separate judges, the Company is seeking consolidation of the two matters before Judge Klein, the judge who denied Ms. Bredeson's motion to dismiss. Ms. Bredeson also has since filed, and then withdrawn, other motions, without allowing them to reach Judge Klein. Discovery is ongoing, but we expect the matter will continue for another six months before substantive motions. An early attempt at mediation was unsuccessful, but another attempt at the end of discovery may be more fruitful. In the interim, the Company is continuing to vigorously defend itself against this lawsuit.
In addition to the above, from time to time, we may be involved in litigation in the ordinary course of
business. Other than as set forth above, we are not currently involved in any litigation that we believe could have a material adverse effect on our financial reporting
knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on April 15, 2020.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Other than described below, there were no unregistered sales of equity securities that were not otherwise disclosed in a current report on Form 8-K.
On July 6, 2020, the Company issued 100,000,000 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.
On July 9, 2020, the Company issued 130,622,200 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.
On July 15, 2020, the Company issued 137,140,300 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.
On July 22, 2020, the Company issued 102,237,500 shares of common stock to Auctus Fund LLC following the conversion of debt and interest held by Auctus Fund LLC.
On September 17, 2020, the Company issued 12,318,939 shares of common stock to Discover Group Fund LLC following the conversion of debt and interest held by Discover Group Fund LLC.
Except where noted, all the securities discussed in this Part II, Item 1. Legal Proceedings
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There has been no material changedefault in the Risk Factors set forth in the “Risk Factors” sectionpayment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company’s Form 10-K for the year ended December 31, 2009, other than as set forth below:
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
There is no other information required to pay our secured convertible promissory note holders the amounts due to them as the notes had matured. Under the termsbe disclosed under this item which was not previously disclosed.
Exhibit Number | Exhibit Description | Form | Exhibit | Filing | Herewith | |||||
31.1 | Rule 13a-14(a) Certification of Principal Executive Officer. | X | ||||||||
31.2 | Rule 13a-14(a) Certification of Principal Financial Officer. | X | ||||||||
32.1* | X | |||||||||
32.2* | X | |||||||||
101.INS | XBRL Instance. | X | ||||||||
101.XSD | XBRL Schema. | X | ||||||||
101.PRE | XBRL Presentation. | X | ||||||||
101.CAL | XBRL Calculation. | X | ||||||||
101.DEF | XBRL Definition. | X | ||||||||
101.LAB | XBRL Label. | X |
* In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not deemed filed for purposes of Section 18 of the notes, the holders may at any time elect to notify usExchange Act.
In accordance with Section 13 or 15(d) of the default and forecloseSecurities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on essentially all of our assets. In addition,its behalf by the OmniReliant notes contain cross default provisions, such that those notes are also in default due to our being in default of the secured convertible promissory notes. The total amount outstanding on these notes as of September 30, 2010 was $5,023.322.undersigned, thereunto duly authorized.
Beyond Commerce, Inc. | ||
Dated: November 16, 2020 | By: | /s/ Geordan Pursglove |
Geordan Pursglove, |
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