| Description of Business and Summary of Accounting Principles | 1.
Description of Business and Summary of Accounting Principles Description
of Business and Concentrations Valuesetters,
Inc. (“Valuesetters,” “we,” “our,” or the “Company”) is a provider of consulting
services, subscription services, advertising and digital goods using technology distribution platforms like the Internet and mobile
devices in the media and entertainment markets. The
financial statements are presented in United States dollars and have been prepared in accordance with generally accepted accounting
principles in the United States of America. The Company’s fiscal year end is April 30. Income
Taxes The
Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.
A valuation allowance has been established to eliminate the Company’s deferred tax assets as it is more likely than not
that none of the deferred tax assets will be realized. The
Company recognizes 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 are measured based on the largest benefit that has a greater than fifty percent
likelihood of being realized upon settlement with the tax authorities. Changes in recognition or measurement are reflected in
the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest
expense and penalties in income tax expense. The Company has determined that it had no significant uncertain tax positions requiring
recognition or disclosure. Revenue
Recognition Revenues
from services are recognized in the period in which they are earned, in accordance with the terms and conditions noted on our
websites. In instances where a subscriber prepays for a service, any prepayment is recognized as a current liability until it
is earned. Costs
of Services Costs
of services consist of direct costs that we pay to third parties in order to provide the services that generate revenue. Loss
Per Share Basic
loss per share is computed by dividing net loss by the weighted-average number of shares outstanding. To the extent that
stock options and warrants are anti-dilutive, they are excluded from the calculation of diluted loss per share. For 2017 and
2016, the Company excluded 38,733,333 shares of common stock issuable upon the exercise of outstanding stock options and
fixed-rate convertible debt from the calculation of net loss per share because the effect would be
anti-dilutive. Cash
and Cash Equivalents The
Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
The Company did not have any cash equivalents during fiscal 2017 and 2016. Use
of Estimates In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The most
significant estimate relates to the accruals for income tax valuation allowance. On a continual basis, management reviews its
estimates, utilizing currently available information, changes in facts and circumstances, historical experience and reasonable
assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ
from those estimates. Determination
of Fair Value Cash
and cash equivalents, accounts receivable, and accounts payable In
general, carrying amounts approximate fair value because of the short maturity of these instruments. Deferred
Revenue Deferred
Revenue represents revenues collected but not earned as of the year end. The Company renders services, or rights to use its
software, over a specific time period and revenues are recognized as earned as time passes. Debt At
April 30, 2017 and 2016, the Company’s secured debt was carried at its face value plus accrued interest. In July 2014, the
Company renegotiated its secured related party debt and a note payable to a former director, and these notes became term loans
which matured on June 30, 2017, and are now technically in default, although the company has not received a default notice and
the lenders have indicated that the terms of the notes can be extended. Based on the financial condition of the Company, it is
impracticable for the Company to estimate the fair value of its short and long-term debt. The
Company has no instruments with significant off balance sheet risk. Recent
Accounting Pronouncements In
May 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. This ASU is a comprehensive new revenue
recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an
amount that reflects the consideration it expects to receive in exchange for those goods or services. The revised effective date
for this ASU is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted,
but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public
entities. We will adopt this ASU when effective. Companies may use either a full retrospective or modified retrospective approach
to adopt this ASU and our management is currently evaluating which transition approach to use. We are currently evaluating the
possible impact of ASU 2014-09, but we do not anticipate that it will have a material impact on the Company’s consolidated
results of operations, financial position or cash flows. In
August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure
of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under this amendment, management is now required
to determine every interim and annual period whether conditions or events exist that raise substantial doubt about an entity’s
ability to continue as a going concern within one year after the date the financial statements are issued. If management indicates
that it is probable the entity will not be able to meet its obligations as they become due within the assessment period, then
management must evaluate whether it is probable that plans to mitigate those factors will alleviate that substantial doubt. The
guidance is effective for fiscal years, beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption
of ASU 2014-15 to have a significant impact on the Company’s consolidated results of operations, financial position or cash
flows. In
April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03
requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability.
ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015. The new guidance will
be applied on a retrospective basis and early adoption is permitted. The Company chose early adoption of the new guidance,
which had no impact on the Company’s consolidated results of operations, financial position or cash flows. In
November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes.”
To simplify the presentation of deferred income taxes, the amendments in this Update require that deferred tax liabilities and
assets be classified as noncurrent in a classified statement of financial position. The amendments in this Update apply
to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities
and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments
in this Update. For public business entities, the amendments in this Update are effective for financial statements issued
for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities,
the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017,
and interim periods within annual periods beginning after December 15, 2018. Earlier application is permitted for all entities
as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively
to all deferred tax liabilities and assets or retrospectively to all periods presented. If an entity applies the guidance
prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for
the change in accounting principle and a statement that prior periods were not retrospectively adjusted. If an entity applies
the guidance retrospectively, the entity should disclose in the first interim and first annual period of change the nature of
and reason for the change in accounting principle and quantitative information about the effects of the accounting change on prior
periods. We do not expect the adoption of ASU 2015-17 to have a significant impact on our consolidated results of operations,
financial position or cash flows. In
January 2016, the FASB issued ASU 2016-01 – “Financial Instruments – Overall (Subtopic 825-10) – Recognition
and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01, among other changes, requires equity
investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee)
to be measured at fair value with changes in fair value recognized in net income. This Update also simplifies the impairment
assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment.
The amendments in ASU 2016-01 will become effective for public business entities for fiscal years beginning after December 15,
2017, including interim periods within those fiscal years. We are currently evaluating the effect of the adoption of ASU
2016-01 will have on our consolidated results of operations, financial position or cash flows. In
February 2016, the FASB issued ASU 2016-02 – “Leases (Topic 842).” Under ASU 2016-02, entities will be required
to recognize lease asset and lease liabilities by lessees for those leases classified as operating leases. Among other changes
in accounting for leases, a lessee should recognize in the statement of financial position a liability to make lease payments
(the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When
measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional
periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate
the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease
assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. The amendments in
ASU 2016-02 will become effective for fiscal years beginning after December 15, 2018, including interim periods with those fiscal
years, for public business entities. We are currently evaluating the effect of the adoption of ASU 2016-02 will have on
our consolidated results of operations, financial position or cash flows. In
March 2016, the FASB issued ASC 2016-09 – “Compensation – Stock Compensation (Topic 718) – Improvements
to Employee Share-based Payment Accounting.” The areas for simplification in this Update involve several aspects of
the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either
equity or liabilities, and classification on the statement of cash flows. In addition to these simplifications, the amendments
eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised
2004), Share-Based Payment. The amendments in ASC 2016-09 will become effective for fiscal years beginning after December
15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or
annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning
of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments
in the same period. We are currently evaluating the effect of the adoption of ASU 2016-09 will have on our consolidated
results of operations, financial position or cash flows. In
August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipt and Cash
Payments. The new guidance addresses certain classification issues related to the statement of cash flows which will eliminate
the diversity of practice in how certain cash receipts and cash payments are presented and classified in the statement of cash
flows. The guidance is effective for fiscal years beginning after December 2017. Early adoption is permitted. We are currently
evaluating the possible impact of ASU 2016-15, but do not anticipate that it will have a material impact on the Company’s
consolidated results of operations, financial position or cash flows. In
October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common
Control. The new guidance amends the consolidation guidance on how a reporting entity that is the single decision maker should
treat indirect interests in the entity held through related parties that are under common control with the reporting entity when
determining whether it is the primary beneficiary of that VIE. The guidance is effective for fiscal years beginning after December
2016. Early adoption is permitted. We are currently evaluating the possible impact of ASU 2016-17, but do not anticipate that
it will have a material impact on the Company’s consolidated results of operations, financial position or cash flows. |
