UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019March 31, 2020
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 0-29651
OCULUS VISIONTECH INC. |
(Exact name of registrant as specified in its charter) |
Wyoming | 06-1576391 |
(State or Other Jurisdiction of | (I.R.S. Employer |
Incorporation or Organization) | Identification No.) |
Suite 507 - 837 West Hastings Street, Vancouver, BC, Canada, V6C 3N6 |
(Address of principal executive offices) (Zip code) |
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(604) 685-1017 |
(Registrant’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.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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” and “smaller reporting company,” and “emerging growth company”issuer” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☑ |
If an emerging growth company, indicate by(Do not 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. ☐a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☑
As of August 5, 2019,May 8, 2020, there were 67,022,568 shares of the registrant’s common stock outstanding.
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |
Common |
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Common stock - no par value | OVTZ | Over The Counter Bulletin Board |
Preferred stock - no par value | N/A | N/A |
Common stock - no par value | OVT | TSX Venture Exchange |
Common stock - no par value | USF1 | Frankfurt Stock Exchange |
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Item 1. |
| 3 | |
| (A) | 3 | |
| (B) | 4 | |
| (C) | Condensed Interim Consolidated Statements Of Stockholders’ Equity (Deficiency) | 5 |
| (D) | 6 | |
| (E) | Notes to Condensed Interim Consolidated Financial Statements | 7 |
Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8 |
Item 3. |
| 13 | |
Item 4. |
| 13 | |
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Item 1. |
| 14 | |
Item 1A. |
| 14 | |
Item 2. |
| 14 | |
Item 3. |
| 14 | |
Item 4. |
| 14 | |
Item 5. |
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Item 6. |
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PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(Stated in US Dollars) |
June 30, | December 31, | March 31, | December 31, | |||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 475,621 | $ | 5,572 | $ | 326,930 | $ | 382,452 | ||||||||
Prepaid expenses and other current assets | 2,251 | 1,192 | 1,130 | 1,267 | ||||||||||||
Total current assets | 477,872 | 6,764 | 328,060 | 383,719 | ||||||||||||
Deferred Tax Assets, net of valuation allowance of $6,571,000 and $6,545,000, respectively | - | - | ||||||||||||||
Deferred Tax Assets, net of valuation allowance of $5,928,000 and $6,580,000, respectively | - | - | ||||||||||||||
Total Assets | $ | 477,872 | $ | 6,764 | $ | 328,060 | $ | 383,719 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICENCY) | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable and accrued expenses | $ | 44,253 | $ | 56,877 | $ | 23,204 | $ | 5,431 | ||||||||
Accounts payable and accrued expenses - related parties | 114,617 | 685,421 | 129,822 | 129,985 | ||||||||||||
Total current liabilities | 158,870 | 742,298 | 153,026 | 135,416 | ||||||||||||
Commitments and Contingencies | - | - | - | - | ||||||||||||
Stockholders' Equity (Deficiency): | ||||||||||||||||
Preferred stock - no par value; authorized 250,000,000 shares, none issued | ||||||||||||||||
Common stock and additional paid-in capital - no par value; authorized 500,000,000 shares, issued and outstanding 67,022,568 and 45,572,568, respectively | 41,634,999 | 40,458,297 | ||||||||||||||
Common stock and additional paid-in capital - no par value; authorized 500,000,000 shares, issued and outstanding 67,022,568 | 41,634,999 | 41,634,999 | ||||||||||||||
Accumulated deficit | (41,315,997 | ) | (41,193,831 | ) | (41,459,965 | ) | (41,386,696 | ) | ||||||||
Stockholders' equity (deficiency) | 319,002 | (735,534 | ) | 175,034 | 248,303 | |||||||||||
Total Liabilities and Stockholders' Equity (Deficiency) | $ | 477,872 | $ | 6,764 | $ | 328,060 | $ | 383,719 |
SEE ACCOMPANYING NOTES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(Stated in US Dollars) | |||||||||
(Unaudited) |
For the three months ended | For the six months ended | For the three months ended | ||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | March | March | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Revenue | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Expenses: | ||||||||||||||||||||||||
Cost of sales | - | - | - | - | - | - | ||||||||||||||||||
Research and development | - | 203 | - | 1,819 | 1,577 | - | ||||||||||||||||||
Selling, general and administrative | 69,486 | 27,621 | 122,166 | 63,866 | 71,788 | 52,680 | ||||||||||||||||||
Total expenses | 69,486 | 27,824 | 122,166 | 65,685 | 73,365 | 52,680 | ||||||||||||||||||
Loss from operations | (69,486 | ) | (27,824 | ) | (122,166 | ) | (65,685 | ) | (73,365 | ) | (52,680 | ) | ||||||||||||
Other income (expense) | Other income (expense) | |||||||||||||||||||||||
Interest income (expense) | - | - | - | - | 96 | - | ||||||||||||||||||
- | - | - | - | 96 | - | |||||||||||||||||||
Net loss | $ | (69,486 | ) | $ | (27,824 | ) | $ | (122,166 | ) | $ | (65,685 | ) | $ | (73,269 | ) | $ | (52,680 | ) | ||||||
Net loss per share - basic and diluted | $ | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) | ||||||
Weighted-average number of common shares outstanding - basic and diluted | 48,165,425 | 45,572,568 | 46,876,159 | 45,572,568 | 67,022,568 | 45,572,568 |
SEE ACCOMPANYING NOTES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) | ||||||||
(Stated in US Dollars) | ||||||||
(Unaudited) |
(Unaudited) | ||||||||||||||||
Common Stock and | ||||||||||||||||
Additional Paid in | ||||||||||||||||
Capital | ||||||||||||||||
Accumulated | Stockholders' | |||||||||||||||
Shares | Amount | Deficit | Equity | |||||||||||||
(Deficiency) | ||||||||||||||||
Balance at January 1, 2019 | 45,572,568 | $ | 40,458,297 | $ | (41,193,831 | ) | $ | (735,534 | ) | |||||||
Sale of common stock, net of $32,416 of issuance cost | 21,450,000 | 1,176,702 | - | 1,176,702 | ||||||||||||
Net loss | (122,166 | ) | (122,166 | ) | ||||||||||||
Balance at June 30, 2019 | 67,022,568 | $ | 41,634,999 | $ | (41,315,997 | ) | $ | 319,002 |
Common Stock and | ||||||||||||||||
Additional Paid in | ||||||||||||||||
Capital | ||||||||||||||||
Accumulated | Stockholders' | |||||||||||||||
Shares | Amount | Deficit | Equity | |||||||||||||
(Deficiency) | ||||||||||||||||
Balance at January 1, 2020 | 67,022,568 | $ | 41,634,999 | $ | (41,386,696 | ) | $ | 248,303 | ||||||||
Net loss | (73,269 | ) | (73,269 | ) | ||||||||||||
Balance at March 31, 2020 | 67,022,568 | $ | 41,634,999 | $ | (41,459,965 | ) | $ | 175,034 |
SEE ACCOMPANYING NOTES
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(Stated in US Dollars) |
Six months ended June 30, | 2019 | 2018 | ||||||||||||||
Three months ended March 31, | 2020 | 2019 | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (122,166 | ) | $ | (65,685 | ) | $ | (73,269 | ) | $ | (52,680 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Decrease (increase) in prepaid expenses and other current assets | (1,059 | ) | (6,139 | ) | 137 | (98 | ) | |||||||||
Increase (decrease) in accounts payable and accrued expenses | (12,624 | ) | (8,727 | ) | 17,773 | (7,182 | ) | |||||||||
Increase (decrease) in accounts payable and accrued expenses due to related parties | (570,804 | ) | 86,623 | (163 | ) | 60,274 | ||||||||||
Net cash used in operating activities | (706,653 | ) | 6,072 | (55,522 | ) | 314 | ||||||||||
Cash flows from financing activities | ||||||||||||||||
Proceeds from the sale of common stock | 1,176,702 | - | - | - | ||||||||||||
Net cash from financing activities | 1,176,702 | - | - | - | ||||||||||||
Net increase in cash and cash equivalents | 470,049 | 6,072 | (55,522 | ) | 314 | |||||||||||
Cash and cash equivalents at beginning of period | 5,572 | - | 382,452 | 5,572 | ||||||||||||
Cash and cash equivalents at end of period | $ | 475,621 | $ | 6,072 | $ | 326,930 | $ | 5,886 | ||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid during the period for interest | $ | - | $ | - | $ | - | $ | - | ||||||||
Cash paid during the period for income taxes | $ | - | $ | - | $ | - | $ | - |
SEE ACCOMPANYING NOTES
OCULUS VISIONTECH INC. AND SUBSIDIARY
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, March 31, 2020 and 2019 and 2018
(Stated in US Dollars)
(Unaudited)
1. | BASIS OF PRESENTATION |
These unaudited condensed interim consolidated financial statements should be read in conjunction with the annual financial statements for Oculus VisionTech Inc. (“Oculus” or the “Company”) most recently completed fiscal year ended December 31, 2018.2019. These unaudited condensed interim consolidated financial statements do not include all disclosures required in annual financial statements, but rather are prepared in accordance with recommendations for interim financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These unaudited condensed interim consolidated financial statements have been prepared using the same accounting policies and methods as those used by the Company in the annual audited financial statements for the year ended December 31, 2018,2019, except when disclosed below.
The accompanying consolidated financial statements include the accounts of Oculus and its wholly-owned subsidiary, USVO Inc. (dissolved December 31, 2019). All intercompany balances and transactions have been eliminated upon consolidation.
In the opinion of the management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. The results for the interim periods are not necessarily indicative of the results that may be attained for an entire year or any future periods. For further information, refer to the Financial Statements and footnotes thereto in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2018.2019.
2. | GOING CONCERN |
The accompanying unaudited condensed interim consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown in the financial statements, the Company has incurred a loss of $122,166$73,269 for the sixthree month period ended June 30, 2019March 31, 2020 and, in addition the Company incurred losses of $183,279$192,865 and $230,699$183,279 for the years ended December 31, 20182019 and 2017,2018, respectively. As of June 30, 2019,March 31, 2020, the Company had an accumulated deficit of $41,315,997$41,459,965 and a working capital deficit of $319,002.$175,034. These conditions raise doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations as they come due which management believes it will be able to do. To date, the Company has funded operations primarily through the issuance of common stock and warrants to outside investors and the Company’s management. The Company believes that its operations will generate additional funds and that additional funding from outside investors and the Company’s management will continue to be available to the Company when needed. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary in the event the Company cannot continue as a going concern.
3. | COMMON STOCK |
On June 19, 2019, the Company issued 7,500,000 units to employee and directors at $0.075 CND per unit. Each unit consisted of one share of common stock.
On June 19, 2019, the Company issued 13,950,000 units to investors at $0.075 CND per unit. Each unit consisted of one share of common stock.
4. |
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None.On September 30, 2019, the Company adopted Rolling Stock Option Plan. Up to 10% of the Company’s issued and outstanding common shares may be reserved for granting of stock options. The Company has reserved up to 6,702,257 options to grant under the Plan based on the fee calculation table. The Company has not issued stock options from the plan as of the date of this statement.
5. | SUBSEQUENT EVENTS |
In early 2020, a coronavirus that causes COVID-19 emerged globally, which is currently affecting the global economies and has a resulting effect on the Company. Therefore, while the Company expects this matter to negatively impact the Company's financial condition, results of operations, or cash flows, the extent of the financial impact and duration cannot be reasonably estimated at this time.
On April 20, 2020, the Company announced the planned expansion of its suite of data security products through the acquisition of 100% of the shares of OCL Technologies Corp. Consideration for the acquisition of OCL is 12,500,000 common shares of the Company and 12,500,000 share purchase warrants exercisable for a period of five years from date of issuance. The share purchase warrants are exercisable only upon specific performance criteria being met. Completion of the Acquisition and the convertible debenture offering are subject to receipt of applicable regulatory approvals including acceptance by the TSX Venture Exchange ("TSXV") which was received on May 5th ,2020.
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
FORWARD-LOOKING STATEMENTS AND SUPPLEMENTARY DATA
The following discussion should be read in conjunction with our condensed interim financial statements and other financial information appearing elsewhere in this quarterly report. In addition to historical information, the following discussion and other parts of this quarterly report contain forward-looking statements under applicable securities laws. You can identify these statements by forward-looking words such as “plan”, “may”, “will”, “expect”, “intend”, “anticipate”, believe”, “estimate” and “continue” or similar words. Forward-looking statements are statements that are not historical facts, and include, but are not limited to, statements regarding the Company’s digital watermarking technology and Cloud Document Protection System (C-DPS),the Company’s expenses related to the Alpha and Beta testing of its digital water marketing technology and Cloud Document Protection System, the anticipated development and commercialization date of its Cloud Document Protection System, the future sources and availability of additional funding, and the effect of funding arrangements on projects and products. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. We believe that it is important to communicate future expectations to investors. However, there may be events in the future that we are not able to accurately predict or control. Accordingly, we do not undertake any obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as required by law.
The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 20182019 and other periodic reports filed with the United States Securities and Exchange Commission (“SEC”). Accordingly, to the extent that this quarterly report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company, please be advised that the Company’s actual financial condition, operating results and business performance may differ materially from that projected or estimated by the Company in forward-looking statements.
OVERVIEW OF THE COMPANY
We have recognized that Internet-based, digital document security/protection products are a business opportunity for the Company that allow us to apply our proprietary real-time digital video watermarking technology, which was developed for studios and networks in the entertainment industry, to the digital document security/protection sector. Our Cloud-DPS technology introduces the Company to the online, digital document security/protection industry and possible vertical markets that exist in the sector, including the ability to confirm the authenticity of online documents and photographs distributed through traditional wireline networks or over wireless smart devices.
Our Cloud-DPS secures and protects digital documents (including text documents, photos, blueprints, etc.) from any modification, and/or attempted forgery. It works by imperceptibly watermarking documents, using real-time image processing and watermarking algorithms, embedded into a secured/protected copy of a document. This protected copy is designed to resist any attempts to alter or forge the document by forensically tracking and deterring any attempts to tamper with the document. The watermarking algorithms are able to ascertain whether a document is protected by our DPS technology and if any attempts to modify or tamper with the document occurred. Any such modifications will be flagged, time stamped, and can be spatially highlighted in the document where any tampering occurred. This authentication and verification process ensures the integrity of the original document.
We currently have no customers for our products and services. We are taking steps to monetarize our Cloud-DPS technology. These steps include actively seeking licensing initiatives. Our DPS architecture is designed as a web service, which allows for an easy customization to individual customer needs. The main customization effort is reduced by our creation of well synchronized interfaces to a potential customer's infrastructure. This feature will allow us to offer "white label" licensing of our DPS technology.
BUSINESS OBJECTIVES:
We have established the following near-term business objectives:
1. | Patent and license new technology developed within the corporate research and development program; |
2. | Demonstrate proof of concept on selected commercial projects with C-DPS – Cloud Document Protection System and gain industry recognition for the architectural and business differentiators of company’s C-DPS product’s authentication and tamper-proof functionality. |
CRITICAL ACCOUNTING POLICIES (AND ESTIMATES)
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates, including those related to customer programs and incentives, bad debts, inventories, investments, intangible assets, income taxes, warranty obligations, impairment or disposal of long-lived assets, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We have identified the policies below as critical to our business operations and to the understanding of our financial results. The impact and any associated risks related to these policies on our business operations is discussed throughout management’s discussion and analysis of financial condition and results of operations where such policies affect our reported and expected financial results:
● | Revenue recognition; |
● | Impairment or disposal of long-lived assets; |
● | Deferred taxes; |
● | Accounting for stock-based compensation; and |
● | Commitments and contingencies. |
Revenue Recognition . In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, RevenuefromContractswithCustomers(Topic606)("ASC 606"). This guidance outlines a single, comprehensive model for accounting for revenue from contracts with customers to depict the transfer of control over a product to a customer. The guidance's core principle is that the Company will recognize revenue when it transfers control over promised goods or services to customers in an amount that reflects consideration to which the Company expects to be entitled in exchange for those goods or services.
Under ASC 606, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to a customer. The Company's contracts with customers typically contain a single performance obligation. A contract's transaction price is allocated to its distinct performance obligation and recognized for digital water markingas revenue when, or as, the performance obligation is satisfied. If there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on a contracted usage schedule on a monthly billing cycle. Software revenuetheir relative standalone selling prices. Sales are recorded net of sales returns, discounts and other services are recognized in accordance with the terms of the specific agreement, which is generally upon delivery and when accepted by the customer. Maintenance, support and service revenue are recognized ratably over the term of the related agreement. In order to recognize revenue, we must not have any continuing obligations and it must also be probable that we will collect the accounts receivable.allowances.
Impairment or Disposal of Long-Lived Assets . Long-lived assets are reviewed in accordance with ASC Topic 360-10-05. Impairment or disposal of long-lived assets losses are recognized in the period the impairment or disposal occurs.
Deferred Taxes . We record a valuation allowance to reduce deferred tax assets when it is more likely than not that some portion of the amount may not be realized.
Accounting for Stock-Based Compensation . Under ASC Topic 718, Stock Compensation (formerly referred to as SFAS No. 123(R)), the Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The amount of expense attributed is based on estimated forfeiture rate, which is updated based on actual forfeitures as appropriate. This option pricing model requires the input of highly subjective assumptions, including the expected volatility of the Company’s common stock, pre-vesting forfeiture rate and an option’s expected life. The financial statements include amounts that are based on the Company’s best estimates and judgments.
Commitments and Contingencies . We account for commitments and contingencies in accordance with ASC Topic 450 Contingencies (formerly referred to as financial accounting standards board Statement No. 5, Accounting for Contingencies). We record a liability for commitments and contingencies when the amount is both probable and reasonably estimable.
RESULTS OF OPERATIONS
Sales
Sales for the sixthree month period ended June 30,March 31, 2020 and 2019 and 2018 were $-0-
Cost of Sales
The cost of sales for the sixthree months ended June 30,March 31, 2020 and 2019 and 2018 were $-0-.
Selling, General and Administrative Expenses
Selling, general and administrative expenses, consisting of product marketing expenses, consulting fees, office, professional fees and other expenses to execute our business plan and for our day-to-day operations, increased in the sixthree months ending June 30, 2019.March 31, 2020. We continue to develop and market C-DPS – Cloud Document Protection System. Professional fees increased due to management’s decision review and update corporate requirements and procedures. Administrative expenses have increased as a result.
Selling, general and administrative expenses for the sixthree months ended June 30, 2019March 31, 2020 increased by $56,481$19,108 to $122,166$71,788 from $65,685$52,680 for the sixthree months ended June 30, 2018.March 31, 2019.
Professional expenses for the sixthree months ended June 30, 2019,March 31, 2020, increased to $24,035$20,074 from $10,226$10,664 for the comparable period in 2018.2019. We incurred increased costs in 20192020 due to preparationplanned expansion of its suite of data security products through the shareholder meeting and private placement.acquisition.
Filing fees for the sixthree months ended June 30, 2019,March 31, 2020, increased to $12,710$6,493 from $5,614$6,091 for the comparable period in 2018.2019. We incurred increased costs in 20192020 due to a private placement.increase outstanding shares.
Marking expensesCurrency exchange expense for the sixthree months ended June 30, 2019,March 31, 2020, increased to $8,600$23,210 from $-0-$33 for the comparable period in 2018.2019. We incurred increased costs in 20192020 due to completion of the company’s new product line demonstrationchange in 2019.the Canadian dollar and the United States dollar.
Salaries and fees for the sixthree months ended June 30,March 31, 2020 and 2019 and 2018 were $-0-. No costs were incurred due to management and employee reductions.
We have arranged for additional staff and consultants to engage in marketing activities in an effort to identify and assess appropriate market segments, develop business arrangements with prospective partners, create awareness of new products and services, and communicate to the industry and potential customers. Other components of selling, general and administrative expenses did not change significantly.
Research and Development
Research and development costs for the sixthree months ended June 30, 2019, decreasedMarch 31, 2020, increased by $1,577 to by $1,819 to$1,577 from $-0- from $1,819 for the comparable period in 2018.2019. We incurred decreasedincreased costs in 20192020 due to management’s decision to develop C-DPS – Cloud Document Protection System in house.
Net Losses
To date, we have not achieved profitability and expect to incur substantial losses for the foreseeable future. Our net loss for the sixthree months ended June 30, 2019March 31, 2020 was $122,166$73,269 compared with a net loss of $65,685$52,680 for 2018.2019.
Liquidity and Capital Resources
At June 30, 2019,March 31, 2020, our cash position was $475,621,$326,930, compared $5,572$382,452 at December 31, 2018.2019. We had a working capital deficit of $319,002$175,034 and an accumulated deficit of $41,315,997$41,459,965 at June 30, 2019.March 31, 2020.
We have historically satisfied our capital needs primarily by issuing equity securities to our officers, directors, employees and a small group of investors, and from short-term bridge loans from members of management. During the sixthree months ended June 30, 2019,March 31, 2020, the Company issued on June 19, 2019 common stock and raised $1,176,702.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet transactions, arrangements, or obligations that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, or capital resources.
RELATED PARTY TRANSACTIONS
The Company for the sixthree months ended June 30,March 31, 2020 and 2019 and 2018 reimbursed a related party $12,098$6,071 and $13,827,$6,015, respectively. The Company incurred no expenses from a related party of $1,819 for research and development for the sixthree months ended June 30, 2018.March 31, 2020 and 2019. The Company had no repaid advances from related parties in the amount of $622,277 in June 30, 2019.three months ended March 31, 2020.
Item3. Quantitative and Qualitative Disclosures About Market Risk. |
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Oculus is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not required to provide information required under this Item.
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We maintain “disclosure controls and procedures”, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, who is our principal executive officer, and Chief Financial Officer, who is our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
As of June 30, 2019,March 31, 2020, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the our internal control over financial reporting for the quarterly period ended June 30, 2019,March 31, 2020, identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Legal Proceedings. |
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
Risk Factors. |
Oculus is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide information required under this Item. A description of the risks associated with our business, financial condition, and results of operations is set forth in Part I, Item 1A, of our Annual Report on Form 10 -K for the fiscal year ended December 31, 20182019 filed with the SEC on June 30, 2019.March 31, 2020. Those factors continue to be meaningful for your evaluation of Oculus and we urge you to review and consider the risk factors presented in such Form 10-K.
Unregistered Sales of Equity Securities and Use of Proceeds. |
None.
Defaults Upon Senior Securities. |
None.
Mine Safety Disclosures. |
Not applicable.
Other Information. |
The Company held its shareholders meeting on April 30, 2019, at which the shareholders approved the election of directors, appointed KCPO, PC as auditors, adopted the share consolidation plan and, the Company’s stock option plan. Voting results are as follows:None.
Outcome of Vote | Votes For | Votes Against | Votes Withheld/ Abstained | Votes Spoiled | ||
1. | Fixing the number of directors at five | Carried | 12,740,971 | 39,584 | 0 | 0 |
2. | The election of the following directors: | |||||
i. ROWLAND PERKINS | Carried | 12,329,095 99.69% | 451,460 3.53% | 0 | ||
ii. ANTON J. DRESCHER | Carried | 12,318,593 96.39% | 461,962 3.61% | 0 | ||
iii. MAURICE LOVERSO | Carried | 12,332,556 96.49% | 477,999 3.51% | 0 | ||
iv. TOM PEROVIC | Carried | 12,344,815 96.59% | 435,740 3.41% | 0 | ||
v. RON WAGES | Carried | 12,353,995 96.66% | 426,560 3.34% | 0 | ||
3. | Appointment of KWCO, PC, as auditors of the Company and authorizing the directors to fix their remuneration | Carried | 22,187,962 98.52% | 332,843 1.48% | 0 | |
4. | Approval of Share Consolidation on an up to 15:1 basis | Carried | 11,679,341 91.38% | 1,101,214 8.62% | 0 | |
5. | Approval of 2019 Stock Option Plan | Carried | 12,435,465 96.90% | 397,638 3.10% | 0 |
Exhibits. |
The information required by this Item is set forth on the exhibit index which follows the signature page of this report.
Exhibit No. | Description | |
EX-31.1 | ||
EX-31.2 | ||
EX-32.1 | ||
EX-32.2 |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OCULUS VISIONTECH INC. | ||
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| By: | /s/ Rowland Perkins |
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| Rowland Perkins | |
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| President and Chief Executive Officer | |
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| (principal executive officer) | |
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| By: | /s/ Anton J. Drescher |
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| Anton J. Drescher | |
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| Chief Financial Officer | |
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| (principal financial and accounting officer) |