Washington, D.C.DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TOUNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly periodQuarterly Period ended JulyMarch 31, 2009
Commission file number File No. 000-53425
Singlepoint Inc. | ||
(Name of small business issuer in its charter) |
Nevada | 26-1240905 | |
(State or other jurisdiction of incorporation or organization) | ( Identification No.) |
2999 North 44th Street Suite 800, Las Vegas, Nevada USA 89102
Phoenix, AZ 85018
(Address of principal executive offices) (Zip Code)
(855) 711-2009
(Registrant’sIssuer’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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 requirements for the past 90 days. xYes ox No¨
Indicate by check mark whether the registrant has submitted electronically 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 x 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”, “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 | x |
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-2 of the Exchange Act). oYes ¨ No x No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock,equity, as of the latest practicable date: As of September 14, 2009, there were 32,537,000May 15, 2019, the Company had 1,299,350,272 outstanding shares of Common Stock, $0.0001its common stock, par value.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, of Part I of this report include forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.
PART I – FINANCIAL INFORMATION
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SINGLEPOINT INC.
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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PART I – FINANCIAL INFORMATION
SINGLEPOINT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, 2019 December 31, 2018 ASSETS CURRENT ASSETS: Cash Accounts receivable Prepaid expenses Inventory Total Current Assets NON-CURRENT ASSETS: Investment, at cost (Note 3) Total Assets LIABILITIES AND STOCKHOLDERS' DEFICIT LIABILITIES CURRENT LIABILITIES: Accounts payable, including related party (Note 8) Accrued expenses, including accrued officer salaries (Note 8) Current portion of convertible notes payable, net of debt discount (Note 4) Advances from related party (Note 8) Derivative liability Total Current Liabilities LONG-TERM LIABILITIES: Convertible notes payable, net of debt discount (Note 4) Total Liabilities Commitments and Contingencies (Note 8) STOCKHOLDERS' DEFICIT Class A convertible preferred stock, par value $0.0001; 60,000,000 shares authorized; 49,200,000 and 50,950,000 shares issued and outstanding Common stock, par value $0.0001; 2,000,000,000 shares authorized; 1,299,350,272 and 1,236,319,023 shares issued and outstanding Additional paid-in capital Accumulated deficit Total Singlepoint Inc. stockholders' deficit Non-controlling interest Total Stockholders' Deficit Total Liabilities and Stockholders' Deficit $ 383,249 $ 68,781 22,949 5,979 23,347 8,938 5,903 157 435,448 83,855 60,000 60,000 $ 495,448 $ 143,855 $ 132,475 $ 146,635 705,622 1,345,567 30,747 156,853 677,801 645,788 2,149,878 2,215,376 3,696,523 4,510,219 1,250,000 500,000 4,946,523 5,010,219 4,920 5,095 129,935 123,632 65,616,362 63,940,510 (70,113,791 ) (68,846,438 ) (4,362,574 ) (4,777,201 ) (88,501 ) (89,163 ) (4,451,075 ) (4,866,364 ) $ 495,448 $ 143,855
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Table of Contents |
SINGLEPOINT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended March 31, 2019 March 31, 2018 REVENUE Cost of Revenue Gross profit OPERATING EXPENSES: Consulting fees Compensation Professional and legal fees Investor relations General and administrative Operating expenses LOSS FROM OPERATIONS OTHER INCOME (EXPENSE): Interest expense Amortization of debt discounts Gain (loss) on change in fair value of derivative liability Other income (expense), net LOSS BEFORE INCOME TAXES Income taxes NET LOSS Loss attributable to non-controlling interests Net loss per share - basic Weighted average number of common shares outstanding - basic $ 262,890 $ 188,883 187,261 120,756 75,629 68,127 67,442 90,935 87,490 86,194 103,843 21,199 112,439 148,955 207,535 116,892 578,749 464,175 (503,120 ) (396,048 ) (73,194 ) (24,849 ) (73,394 ) (109,767 ) (616,983 ) 197,758 (763,571 ) 63,142 (1,266,691 ) (332,906 ) - - (1,266,691 ) (332,906 ) (662 ) (502 ) NET LOSS ATTRIBUTABLE TO SINGLEPOINT INC. STOCKHOLDERS $ (1,267,353 ) $ (333,408 ) $ (0.00 ) $ (0.00 ) 1,282,900,570 1,059,634,814
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SINGLEPOINT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT For the Three Months Ended March 31, 2019 and Year Ended December 31, 2018 (Unaudited) Preferred Stock Par Value $0.0001 Common Stock Par Value $0.0001 Additional Non- Total Number of Shares Amount Number of Shares Amount paid-in Capital Accumulated Deficit controlling Interest Stockholders' Deficit Balance, December 31, 2017 Issuance of common shares for services Issuance of common shares for investments Issuance of common shares for principal and accrued interest on convertible notes Issuance of preferred shares for services Conversion of preferred shares Resolution of derivative liability due to debt conversion Net loss Balance, December 31, 2018 Issuance of common shares for services previously accrued Issuance of common shares for principal and accrued interest on convertible notes Conversion of preferred shares Settlement of derivative liability due to debt conversion Net loss Balance, March 31, 2019 47,750,000 $ 4,775 935,585,925 $ 93,559 $ 59,951,381 $ (60,797,888 ) $ (31,804 ) $ (779,977 ) 600,000 60 38,460 38,520 6,979,167 698 215,656 216,354 198,153,931 19,815 733,673 753,488 7,000,000 700 2,494,300 2,495,000 (3,800,000 ) (380 ) 95,000,000 9,500 (9,120 ) - 516,160 516,160 - (8,048,550 ) (57,359 ) (8,105,909 ) 50,950,000 $ 5,095 1,236,319,023 $ 123,632 $ 63,940,510 $ (68,846,438 ) $ (89,163 ) $ (4,866,364 ) 8,000,000 800 799,200 800,000 44,531,249 4,453 195,046 199,499 (1,750,000 ) (175 ) 10,500,000 1,050 (875 ) - 682,481 682,481 (1,267,353 ) 662 (1,266,691 ) 49,200,000 $ 4,920 1,299,350,272 $ 129,935 $ 65,616,362 $ (70,113,791 ) $ (88,501 ) $ (4,451,075 )
SINGLEPOINT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
For the Three Months Ended March 31, 2018
(Unaudited)
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| Common Stock |
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| Par Value $0.0001 |
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| Total |
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| Accumulated Deficit |
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Balance, December 31, 2017 |
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| 47,750,000 |
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| $ | 4,775 |
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| 935,585,925 |
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| $ | 93,559 |
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| $ | 59,951,381 |
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| $ | (60,797,888 | ) |
| $ | (31,804 | ) |
| $ | (779,977 | ) |
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Issuance of common shares for services |
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| 600,000 |
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| 60 |
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| 38,460 |
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Issuance of common shares for principal and accrued interest on convertible notes |
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| 105,000,000 |
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| 10,500 |
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| 199,500 |
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| 210,000 |
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Conversion of preferred shares |
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| (3,800,000 | ) |
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| (380 | ) |
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| 95,000,000 |
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Net loss |
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| (333,408 | ) |
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| 502 |
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| (332,906 | ) |
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Balance, March 31, 2018 |
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| 43,950,000 |
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| $ | 4,395 |
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| 1,136,185,925 |
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| $ | 113,619 |
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| $ | 60,180,221 |
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| $ | (61,131,296 | ) |
| $ | (31,302 | ) |
| $ | (864,363 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| Table of Contents |
SINGLEPOINT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) For the Three Months Ended March 31, 2019 March 31, 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss Adjustments to reconcile net loss to net cash used in operating activities Loss attributable to non-controlling interests Common stock issued for services Depreciation Amortization of debt discounts (Gain) loss on change in fair value of derivatives Changes in operating assets and liabilities: Accounts receivable Prepaid expenses Inventory Accounts payable Accrued expenses NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for deposit NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from advances from related party Payments on advances to related party Proceeds from issuance of convertible notes, net NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES NET CHANGE IN CASH Cash at beginning of period Cash at end of period SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: Interest paid Income tax paid NON-CASH INVESTING AND FINANCING ACTIVITIES: Original issue discount from issuance of notes payable Common stock issued for conversion of debt Conversion of preferred stock to common stock Issuance of common stock previously accrued $ (1,267,353 ) $ (333,408 ) 662 502 - 38,520 - 2,800 73,394 109,767 616,983 (197,758 ) (16,970 ) (962 ) (14,409 ) (12,607 ) (5,746 ) (8,209 ) (14,160 ) (10,563 ) 168,622 (18,084 ) (458,977 ) (430,002 ) - (120,000 ) - (120,000 ) 23,445 - - (4,303 ) 750,000 - 773,445 (4,303 ) 314,468 (554,305 ) 68,781 915,078 $ 383,249 $ 360,773 $ - $ - $ - $ - $ 75,000 $ - $ 199,499 $ 210,000 $ 1,050 $ 380 $ 800,000 -
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
SINGLEPOINT INC.
| (A DEVELOPMENT STAGE ENTERPRISE) | ||||||||
| CONDENSED BALANCE SHEETS | ||||||||
| July 31, | October 31, | |||||||
| 2009 | 2008 | |||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 18,454 | $ | 75,223 | ||||
| Accounts receivable-affiliate | - | 767 | ||||||
| Prepaid expenses | - | 1,410 | ||||||
| Total current assets | 18,454 | 77,400 | ||||||
| EQUIPMENT | ||||||||
| Computer, net of accumulated depreciation | 1,569 | 2,182 | ||||||
| OTHER ASSETS | ||||||||
| Website development costs, net of accumulated amortization | 5,342 | 7,124 | ||||||
| License, net of accumulated amortization | 3,768,774 | - | ||||||
| Total other assets | 3,774,116 | 7,124 | ||||||
| Total assets | $ | 3,794,139 | $ | 86,706 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | - | $ | 1,096 | ||||
| Accrued liabilities | 85,195 | - | ||||||
| Shareholders' advances | 37,695 | 72,196 | ||||||
| Total current liabilities | $ | 122,890 | $ | 73,292 | ||||
| STOCKHOLDERS' EQUITY | ||||||||
| Class A Convertible Preferred stock, $.0001 par value, | ||||||||
| 10,000,000 shares authorized, 8,000,000 issued and outstanding | 800 | 800 | ||||||
| Common stock, par value $.0001,100,000,000 shares | ||||||||
| authorized, 32,537,000 shares issued and outstanding (2009) | ||||||||
| 24,781,000 shares issued and outstanding (2008) | 3,254 | 2,478 | ||||||
| Paid in capital | 4,993,351 | 482,004 | ||||||
| Stock subscriptions payable | 42,272 | 15,180 | ||||||
| Deficit accumulated during development stage | (1,368,428) | (487,048) | ||||||
| Total stockholders' equity | 3,671,249 | 13,414 | ||||||
| Total liabilities & stockholders' equity | $ | 3,794,139 | $ | 86,706 | ||||
| The accompanying notes are an integral part of these financial statements. | ||||||||
| (A DEVELOPMENT STAGE ENTERPRISE) | ||||||||||||||||||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Cumulative | ||||||||||||||||||||
| from Inception | ||||||||||||||||||||
| Three Months | Three Months | Nine Months | Nine Months | (October 15, 2007) | ||||||||||||||||
| Ended | Ended | Ended | Ended | to | ||||||||||||||||
| July 31, 2009 | July 31, 2008 | July 31, 2009 | July 31, 2008 | July 31, 2009 | ||||||||||||||||
| REVENUES | $ | - | $ | - | $ | 1,145 | $ | - | $ | 1,912 | ||||||||||
| EXPENSES | ||||||||||||||||||||
| General and administrative: | ||||||||||||||||||||
| Consulting fees | 494,500 | 83,126 | 707,381 | 249,376 | 1,061,124 | |||||||||||||||
| Other | 30,490 | 67,338 | 101,743 | 92,855 | 235,616 | |||||||||||||||
| Depreciation and amortization | 72,024 | - | 73,621 | - | 73,893 | |||||||||||||||
| Total expenses | 597,014 | 150,464 | 882,745 | 342,231 | 1,370,633 | |||||||||||||||
| OTHER INCOME-Interest | 7 | - | 221 | - | 293 | |||||||||||||||
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| NET LOSS | $ | (597,007 | ) | $ | (150,464 | ) | $ | (881,379 | ) | $ | (342,231 | ) | $ | (1,368,428 | ) | |||||
| NET LOSS PER SHARE - BASIC | $ | (0.02 | ) | $ | * | $ | (0.03 | ) | $ | (0.01 | ) | |||||||||
| WEIGHTED AVERAGE NUMBER OF | ||||||||||||||||||||
| COMMON SHARES OUTSTANDING - BASIC | 29,063,630 | 24,621,000 | 29,028,923 | 24,603,847 | ||||||||||||||||
| * less than $(.01) per share | ||||||||||||||||||||
The accompanying notes are an integral part of these financial statements. | ||||||||||||||||||||
| CARBON CREDITS INTERNATIONAL, INC. | ||||||||||||
| (A DEVELOPMENT STAGE ENTERPRISE) | ||||||||||||
| CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||
| (unaudited) | ||||||||||||
| Cumulative | ||||||||||||
| from | ||||||||||||
| Nine Months | Nine Months | Inception | ||||||||||
| Ended | Ended | (October 15, 2007) to | ||||||||||
| July 31, 2009 | July 31, 2008 | July 31, 2009 | ||||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | (881,379) | $ | (342,231) | $ | (1,368,427) | ||||||
| Adjustments to reconcile net loss to net | ||||||||||||
| cash used by operating activities: | ||||||||||||
| Depreciation and amortization | 73,621 | - | 73,893 | |||||||||
| Common stock issued at spin off | - | - | 2,420 | |||||||||
| Preferred stock issued for services | - | - | 800 | |||||||||
| Common stock issued for services | 477,500 | - | 477,500 | |||||||||
| Compensation considered as addition to capital | 161,005 | - | 474,448 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Decrease in accounts receivable-affiliate | 767 | - | - | |||||||||
| (Decrease) in accounts payable | (1,096) | - | - | |||||||||
| Decrease in prepaid expenses | 1,410 | 19,023 | - | |||||||||
| Increase in accrued liabilities | 85,195 | 222,926 | 85,195 | |||||||||
| Net cash used by operating activities | (82,977) | (100,282) | (254,171) | |||||||||
| INVESTING ACTIVITIES | ||||||||||||
| Website development costs | - | - | (7,124) | |||||||||
| Purchase of equipment | - | - | (2,454) | |||||||||
| Net cash used by investing activities | - | - | (9,578) | |||||||||
| FINANCING ACTIVITIES | ||||||||||||
| Proceeds from sale of common stock | 18,438 | 48,999 | 187,057 | |||||||||
| Proceeds from shareholder advances | 30,212 | 12,787 | 128,275 | |||||||||
| Proceeds received in advance of stock subscriptions | 42,272 | - | 57,452 | |||||||||
| Shareholder advances - repaid | (64,714) | (4,963) | (90,581) | |||||||||
| Net cash provided (used) by financing activities | 26,208 | 56,823 | 282,203 | |||||||||
| NET INCREASE/(DECREASE) IN CASH | (56,769) | (43,459) | 18,454 | |||||||||
| CASH, BEGINNING OF PERIOD | 75,223 | 43,934 | - | |||||||||
| CASH, END OF PERIOD | $ | 18,454 | $ | 475 | $ | 18,454 | ||||||
| NON-MONETARY TRANSACTION | ||||||||||||
| Stock issued for licensing agreement 6,000,000 shares | ||||||||||||
| issued at $0.64 per share | $ | 3,840,000 | $ | - | $ | 3,840,000 | ||||||
| Stock issued for subscriptions payable 46,000 | ||||||||||||
| shares issued at $0.33 per share | $ | 15,180 | $ | - | $ | 15,180 | ||||||
The accompanying notes are an integral part of these financial statements. | ||||||||||||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASISORGANIZATION AND NATURE OF PRESENTATION
History
Carbon Credits International Inc. (“CCII”), which was formed on October 15, 2007 as a Nevada corporation, was the opinionresult of management,a spin off from Carbon Credits Industries, Inc. (“CCI”), its former parent issuer, on October 17, 2007, in which 24,196,000 shares of common stock were issued to the accompanying unauditedshareholders of CCI on a share for share basis ownership.
On December 23, 2011, CCII entered into a merger agreement with Lifestyle Wireless, Inc. (“LWI”), A Washington Corporation, whereby 30,008,000 shares of CCI common stock were cancelled and 6,321,830 shares of CCII common stock were issued to LWI, with CCII remaining as the surviving company. The effective date of the merger was January 10, 2012 under the Articles of Merger.
On July 1, 2013, CCII changed its name to Singlepoint Inc. (“Singlepoint” or “the Company”) and increased its authorized shares of common stock from 100,000,000 to 500,000,000 and authorized 30,000,000 preferred shares. On July 1, 2013, the ticker symbol changed from CARN to SING.
On July 20, 2016, the Company amended its Articles of Incorporation and increased its authorized common shares from 500,000,000 to 1,000,000,000.
On July 20, 2016, the Company increased the number of authorized Class A Convertible Preferred Stock from 30,000,000 to 60,000,000. The Class A Stock is entitled to vote 25 votes of common stock for each share of Class A Stock held with respect to all matters upon which common stockholders are entitled to vote or to which stockholders are entitled to give consent. Class A Stock converts into common stock of the Company at a ratio of six common shares for every 1 Class A Share.
On August 31, 2017, the Company amended its Articles of Incorporation and increased its authorized common shares from 1,000,000,000 to 2,000,000,000.
On August 31, 2017, the Company amended its Articles of Incorporation and increased the voting rights on its Class A Convertible Preferred Stock to 50 votes of common stock for each share of Class A Stock held with respect to all matters upon which common stockholders are entitled to vote, and increased the conversion ratio on its Class A Stock so that it converts into common stock of the Company at a ratio of 25 common shares for every one Class A share.
On May 17, 2017, the Company acquired a 90% interest in Discount Garden Supply, Inc. (“DIGS”) for cash and common stock.
On October 11, 2017, the Company acquired a 51% interest in Jiffy Auto Glass (“JAG”) for cash and common stock.
On August 31, 2018, the Company acquired a 51% interest in ShieldSaver, LLC (“ShieldSaver”) for cash and common stock.
Going Concern
The financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all ofassuming that the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary forCompany will continue as a fair presentation of the Company’s financial position as of July 31, 2009, and the results of its operations and cash flows for the nine months ended July 31 2009 and 2008 have been made. Operating results for the three and nine months ended July 31 2009 are not necessarily indicative of the results that may be expected for the year ended October 31, 2009.
The Company’s ability to continue in existence is dependent on the Company’s ability to develop the Company’s business plan and to achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company’s common stock.
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| Table of Contents |
NOTE 2 - INCOME TAXES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly state the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted pursuant to such rules and regulations. These financial statements and the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited financial statements and explanatory notes for the year ended December 31, 2018 as disclosed in our Form 10-K filed on April 5, 2019. The results of the three months ended March 31, 2019 (unaudited) are not necessarily indicative of the results to be expected for the pending full year ending December 31, 2019.
Principles of Consolidation
The consolidated financial statements include the accounts of Singlepoint, DIGS, JAG, and Singleseed, Inc. as of March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018. All significant intercompany transactions have been eliminated in consolidation.
Revenues
It is the Company’s policy that revenue from product sales or services will be recognized in accordance with ASC 606 “Revenue from Contracts with Customers”. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current federal tax provision or benefit recorded for any period since inception, nor were there any recorded deferred income tax assets, as such amounts were completely offset by valuation allowances since there is no assurancerevenue recognition guidance, including industry-specific guidance. In applying the new revenue recognition model to contracts with customers, an entity: (1) identifies the contract(s) with a customer; (2) identifies the performance obligations in the contract(s); (3) determines the transaction price; (4) allocates the transaction price to the performance obligations in the contract(s); and (5) recognizes revenue when (or as) the entity satisfies a performance obligation. The accounting standards update applies to all contracts with customers except those that are within the scope of future taxable income.
The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company’s previous accounting practices, the treatment of shipping and handling activities under Topic 606 did not have any impact on the Company’s results of operations, financial condition and/or financial statement disclosures. In December 2007,accordance with the FASB issued SFAS 141(R), “Business Combinations.” This Statement replaces SFAS 141, “Business Combinations,”new guidance, the Company recognizes revenue at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company’s policy is to record revenue when control of the goods transfers to the customer.
Revenue Sharing
In addition to selling the Company’s products to customers, the Company recognizes revenues by sharing commissions with Independent Sales Organizations as an agent on a net basis.
These revenues do not comprise a material amount of the Company’s net sales.
Cash and requires an acquirerCash Equivalents
The Company considers all highly liquid investments with the original maturities of ninety days or less at the time of purchase to recognizebe cash equivalents. The Company maintains deposits in financial institutions which are insured by the assets acquired,Federal Deposit Insurance Corporation (“FDIC”). The Company had deposits in excess of amounts insured by the liabilities assumed, including those arisingFDIC of approximately $108,000 as of March 31, 2019.
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Convertible Instruments
The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with the Accounting Standards Committee (“ASC”) 815 “Derivatives and Hedging”. It provides three criteria that, if met, require companies to bifurcate conversion options from contractual contingencies, any contingent consideration,their host instruments and any non-controlling interestaccount for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the acquireeconsolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the acquisitionconversion date measuredand is reclassified to equity. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at their fair values asthe commitment date of that date, with limited exceptions specifiedthe note transaction and the effective conversion price embedded in the statement. SFAS 141(R) alsonote. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of notes redemption
Income Taxes
The Company accounts for its income taxes in accordance with ASC 740 “Income Taxes”, which requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiablerecognition of deferred tax assets and liabilities as well asfor future tax consequences attributable to differences between the non-controlling interestfinancial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the acquiree, at the full amounts of their fair values (or other amounts determinedyears in accordance with SFAS 141(R)). In addition, SFAS 141(R)'s requirementwhich those temporary differences are expected to measure the non-controlling interest in the acquiree at fair value will result in recognizing the goodwill attributable to the non-controlling interest in addition to that attributable to the acquirer. SFAS 141(R) amends SFAS No. 109, “Accounting for Income Taxes,” to require the acquirer to recognize changes in the amount of itsbe recovered or settled. The effect on deferred tax benefits that are recognizable becauseassets and liabilities of a business combination eitherchange in income from continuingtax rates is recognized in operations in the period that includes the enactment date. The Company has a net operating loss carryforward, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for deferred tax assets resulting from this net operating loss carryforward.
Earnings (loss) Per Common Share
Basic loss per common share has been calculated based upon the weighted average number of common shares outstanding during the period in accordance with the ASC 260-10, “Earnings per Share”. Common stock equivalents are not used in the computation of loss per share, as their effect would be antidilutive. Diluted EPS includes the effect from potential issuance of common stock, including stock issuable pursuant to the assumed exercise of warrants and conversion of convertible notes and Class A Preferred Stock. Dilutive EPS is computed by dividing net income (loss) by the sum of the combination or directly in contributed capital, depending onweighted average number of common stock outstanding, and the circumstances. It also amends SFAS 142, “Goodwill and Other Intangible Assets,” to, among other things, provide guidance ondilutive shares.
The following table summarizes the impairment testingsecurities that were excluded from the diluted per share calculation because the effect of acquired research and development intangible assets and assets thatincluding these potential shares was antidilutive even though the acquirer intends not to use. SFAS 141(R) applies prospectively to business combinations for whichexercise price could be less than the acquisition date is on or after the beginningaverage market price of the first annual reporting period beginning on or after December 15, 2008. We are currently assessing the potential impact that the adoptioncommon shares:
Three months ended | ||||
March 31, | ||||
2019 | ||||
Series A Preferred Stock | 1,230,000,000 | |||
Convertible notes | 229,585,686 | |||
Warrants | 10,000,000 | |||
Potentially dilutive securities | 1,469,585,686 | |||
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Use of SFAS 141(R) could have on our financial statements.
The Company will adopt SFAS 166 in fiscal 2011. The Company does not expect that the adoption of SFAS 166 will have a material impact on the financial statements.
Fair Value Measurements
On January 1, 2011, the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on January 1, 2011, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:
Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.
Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.
The Company’s financial instruments consist of cash, accounts receivable, investments, accounts payable, convertible notes payable, advances from related parties, and derivative liabilities. The estimated fair value of cash, accounts receivable, investments, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.
Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests.
The Company’s derivative liabilities have been valued as Level 3 instruments.
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fair value of convertible notes derivative liability – December 31, 2018 |
| $ | – |
|
| $ | – |
|
| $ | 2,215,376 |
|
| $ | 2,215,376 |
|
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fair value of convertible notes derivative liability – March 31, 2019 |
| $ | – |
|
| $ | – |
|
| $ | 2,149,878 |
|
| $ | 2,149,878 |
|
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The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2018 and March 31, 2019:
|
| Derivative Liability |
| |
Balance, December 31, 2018 |
|
| 2,215,376 |
|
Additions recognized as debt discount |
|
| - |
|
Derivative liability settlements |
|
| (682,481 | ) |
Mark-to-market at March 31, 2019 |
|
| 616,983 |
|
Balance, March 31, 2019 |
| $ | 2,149,878 |
|
|
|
|
|
|
Net loss for the year included in earnings relating to the liabilities held at March 31, 2019 |
| $ | 616,983 |
|
Recently Issued Accounting Pronouncements
Leases
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). SFAS 168 isThis standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods endingbeginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, September 15, 2009. The Company will begin to use the new Codification when referring to GAAP in its annual report on Form 10-K for the fiscal year ending January 3, 2010. This will not have an impact on the resultsbeginning of the Company.
There were various other accounting standards and interpretations issued recently, none of which are expected to have a material effectimpact on the Company’s financial statements.
NOTE 3 -INVESTMENTS
Investments
The company records its investments using the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS 163 requires thatcost method. If cost exceeds fair value, an insurance enterprise recognize a claim liability prior to an event of default when thereimpairment loss is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, includingrecognized unless the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. Itimpairment is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share” (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisionshad total investments of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number$60,000 as of shares of common stock outstanding during the period.
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2019 Acquisition – Direct Solar LLC
On April 10, 2009, our Board of Directors authorized an employee and consultants share plan approving the issuance of up to 5,000,000 shares of common stock as remuneration or in consideration for services rendered. On April 14, 2009, 200,000 of these shares were issued in exchange for legal services rendered at a value to the corporation of $0.05 per share. On May 5, 2009, 500,000 of these shares were issued to our CEO in partial payment against accrued compensation for services rendered between November 1, 2008 and April 30, 2009 at a value to the corporation of $0.05 per share. On May 5, 2009, 200,000 shares of the company's common stock were issued from our employee and consultants share plan in consideration for legal services rendered at a value to the corporation of $0.05 per share. On May, 21 2009, 500,000 shares of the company's common stock from our employee and consultants share plan were issued to our independent directors (250,000 shares to each independent director) at a value to the company of $0.64 per share. On May 26, 2009, in accordance with our agreement with Carbon Reducer Industries Ltd dated May 21, 2009, 6,000,000 shares of the company's restricted common stock were issued at a value of $0.64 each. On May 26, 2009, 250,000 shares of the company's restricted common stock from our employee and consultants share plan were issued to our Chief Financial Officer at a value to the company of $0.45 per share.
The company has paid Carbon Reducer Industries Ltdclosing of the transactions set forth in the Asset Purchase Agreement are subject to the satisfaction (or waiver) of certain conditions. The material conditions are as follows: (i) delivery of a licensing feebill of 6,000,000 sharessale in the form mutually agreeable to the parties duly executed by Sellers, transferring the Tangible Personal Property included in the Purchased Assets to the Company; (2) an assignment agreement in the form mutually agreeable to the parties duly executed, effecting the assignment of the Purchased Assets; (3) [an] assignment[s] in the form mutually agreeable to the parties duly executed, transferring all of Sellers’ right, title and interest in and to the Intellectual Property Assets; (4) an Operating Agreement of the SUB to be in effect upon Closing in the form as mutually agreed to amongst the parties; (5) with respect to each Lease, an Assignment and Assumption of Lease in the form mutually agreeable to the parties; (6) transition services agreements in the forms mutually agreeable to the parties duly executed by certain employees of the Sellers; (7) completion, to the Company’s satisfaction, of an audit of Seller’s financial statements from inception to December 31, 2018 by the Company’s independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States); and the Company being satisfied with its due diligence review of the Sellers, its Business and the Purchased Assets, including without limitation speaking with and otherwise reviewing relationships with all suppliers, customers, employees, independent contractors, and clients of Sellers.
The Company waived certain conditions including but not limited to the completion of an audit of the Seller’s financial statements and the closing of the transactions set forth in the Asset Purchase Agreement was finalized per the Closing Certificate dated May 14, 2019.
Proforma Information (unaudited)
Direct Solar
The unaudited pro forma information of the consolidated results of the Company’s| 14 |
| Table of Contents |
NOTE 4 -CONVERTIBLE NOTES PAYABLE
Convertible notes payable consisted of the following: |
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|
|
| ||||
|
|
|
|
| ||||
|
| March 31, 2019 |
|
| December 31, 2018 |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Convertible note payable with an accredited investor dated October 31, 2017, with interest at 0%, due October 31, 2017, convertible at $0.007 per share. This note is currently in default. |
|
| 10,500 |
|
|
| 10,500 |
|
|
|
|
|
|
|
|
|
|
Convertible note payable to investor (the “CVP Note”) dated October 10, 2017, with interest at 10%, an OID of $70,000, due October 6, 2019, convertible into shares of the Company’s common stock at the average of the 3 lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The note provides for additional tranches of a maximum of $3,970,000, which includes OID of 10%. The note includes a warrant to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share. The note is secured by substantially all assets of the Company. The investor converted a total of $149,500 of principal and accrued interest of this note into 33,370,535 shares of the Company’s common stock during the three months ended March 31, 2019. |
|
| 398,250 |
|
|
| 547,749 |
|
|
|
|
|
|
|
|
|
|
Convertible note payable to investor (the “UAHC Note”) dated October 10, 2017, with interest at 10%, an OID of $70,000, due October 6, 2019, convertible into shares of the Company’s common stock at the average of the 3 lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The note includes a warrant to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share. The note is secured by substantially all assets of the Company. The investor converted a total of $50,000 of principal and accrued interest of this note into 11,160,714 shares of the Company’s common stock during the three months ended March 31, 2019. |
|
| 620,000 |
|
|
| 670,000 |
|
|
|
|
|
|
|
|
|
|
Convertible note payable, to investor (the “Iliad Note”) dated November 5, 2018 totaling $500,000, plus OID of $50,000 and legal fee loan costs of $20,000. The note bears interest at 10% and matures on November 5, 2020.Total available under note is $5,520,000, including $500,000 OID (and $20,000 in legal fees due on first $500k tranche). The note is convertible into shares of the Company’s common stock after 180 days at the average of the 3 lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The Company borrowed an additional $825,000 (including OID of $75,000) under this note during the three months ended March 31, 2019. The note is secured by substantially all assets of the Company. |
|
| 1,395,000 |
|
|
| 570,000 |
|
|
|
|
|
|
|
|
|
|
Total convertible notes payable |
|
| 2,423,750 |
|
|
| 1,798,249 |
|
Less debt discounts |
|
| (1,143,003 | ) |
|
| (1,141,396 | ) |
Convertible notes payable, net |
|
| 1,280,747 |
|
|
| 656,853 |
|
Less current portion of convertible notes |
|
| (30,747 | ) |
|
| (156,853 | ) |
Long-term convertible notes payable |
| $ | 1,250,000 |
|
| $ | 500,000 |
|
Aggregate maturities of long-term debt as of March 31, 2019 are due in future years as follows:
2018 |
| $ | 30,747 |
|
2019 |
|
| 1,250,000 |
|
|
|
|
|
|
|
| $ | 1,280,747 |
|
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| Table of Contents |
JAG, the Company’s subsidiary, entered into a Funding Purchase Agreement on August 25, 2017, whereby JAG received proceeds of $100,000 with loan costs of $37,000, for a total loan of $137,000. This debt was refinanced in April 2018 for $65,000 under a credit agreement with another third-party, payable in weekly payments of approximately $800 through July 2019. The balance under this credit agreement was $44,067 and $52,989 as of March 31, 2019 and December 31, 2018 and is included in accrued expenses on the accompanying balance sheet.
Total amortization of debt discounts was $73,394 and $109,767 for the three months ended March 31, 2019 and 2018, respectively. Accrued interest on the above notes payable totaled $152,715 and $96,100 as of March 31, 2019 and December 31, 2018, respectively. Interest expense for the notes payable for the three months ended March 31, 2019 and 2018 was $73,194 and $24,849, respectively.
NOTE 5 -DERIVATIVE LIABILITY
Derivative Liability- Debt
The fair value of the described embedded derivative on all convertible debt was valued at $2,149,878 and $2,215,376 at March 31, 2019 and December 31, 2018, respectively, which was determined using the Black Scholes Pricing Model with the following assumptions:
December 31, 2018 | ||||
Dividend yield: | 0 | % | ||
Term | 0.5 – 1.0 year | |||
Volatility | 109.7–132.8 | % | ||
Risk free rate: | 2.09–2.63 | % | ||
For the three months ended March 31, 2019 and 2018, the Company shall pay Carbon Reducer Industries Ltdadjusted the recorded fair value of the derivative liability on debt to market resulting in non-cash, non-operating loss of $616,983 for the three months ended March 31, 2019 and gain of $197,758 for the three months ended March 31, 2018.
Note 2 contains a commissionsummary of 15%changes in fair value of the Company’s Level 3 financial liabilities as of March 31, 2019.
NOTE 6 -STOCKHOLDERS’ DEFICIT
Class A Convertible Preferred Shares
As of March 31, 2019 and December 31, 2018, the Company had authorized 60,000,000 shares of Series A Convertible Preferred Stock (“Class A Stock”) with $0.0001 par value per share, of which 49,200,000 and 50,950,000 shares were issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.
Each share of Class A Stock is convertible at any time into 25 shares of common stock, totaling 1,230,000,000 shares of common stock assuming full conversion of all gross sales proceeds derivedoutstanding shares. No dividends are payable unless declared by the Board of Directors. Each share of Class A Stock votes with the shares of Common Stock and is entitled to 50 votes per share and ranks senior to all other classes of stock in liquidation in the amount of $1 per share.
On January 3, 2019, the Company issued 10,500,000, shares of common stock to a former director for the conversion of 1,750,000 shares of Class A Preferred Stock.
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| Table of Contents |
Common Shares
As of March 31, 2019, the Company’s authorized common stock is 2,000,000,000 shares at $0.0001 par value per share. 1,299,350,272 and 1,236,319,023 shares were issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.
Shares issued during the Three months ended March 31, 2019
In January and February 2019, the Company issued an aggregate of 44,531,249 common shares to two investors for the conversion of a total of $199,500 of convertible debt.
On March 1, 2019, the Company issued an aggregate of 8,000,000 common shares to a consultant for consulting services at a price of $0.10 per share. The fair value of these shares of $800,000 was included in accrued expenses as of December 31, 2018.
NOTE 7 -RELATED PARTY TRANSACTIONS
Accrued Officer Compensation
As of March 31, 2019 and December 31, 2018, a total of $404,000 and $349,000, respectively, was accrued for unpaid officer wages due the Company’s CEO under the CEO’s employment agreement.
Other
As of March 31, 2019 and December 31, 2018, a total of $16,619 and $30,287 was due our CEO and our President and is included in accounts payable.
As of March 31, 2019 and December 31, 2018, a total of $2,892 was due the founder of DIGS and is included in accounts payable.
The Company’s CEO advanced the Company funds during 2019 and 2018, with a balance of $605,000 and $585,000, plus accrued interest of $26,597 and $18,030 as of March 31, 2019 and December 31, 2018, respectively. These balances accrue interest at 12% beginning on October 1, 2018, are unsecured and due on demand.
As of March 31, 2019 and December 31, 2018, a total of $14,184 and $10,738, respectively, was due to the founder of DIGS for advances to DIGS.
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As of March 31, 2019 and December 31, 2018, a total of $32,020 was due to an entity owned by the founder of ShieldSaver for advances to ShieldSaver prior to the Company’s acquisition of ShieldSaver on August 31, 2018. The founder of ShieldSaver is also the founder of JAG and is a related party.
The Company’s subsidiary DIGS previously sub-leased space on a month-to-month basis from an entity controlled by the commercial exploitationfounder of Carbon Reducer Industries's Ltd energy saving solutions. ( DIGS. Total payments related to this sub-lease for the three months ended March 31, 2019 and 2018 were $0 and $4,875, respectively.
See Note 5)