Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 31, 2017 | Sep. 20, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | ValueSetters Inc. | |
Entity Central Index Key | 1,414,767 | |
Trading Symbol | VSTR | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-30 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 574,590,000 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Jul. 31, 2017 | Apr. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 296 | $ 3,324 |
Prepaid expenses | 3,209 | 16,424 |
Total current assets | 3,505 | 19,748 |
Deposits | 6,300 | |
Total assets | 9,805 | 19,748 |
Current liabilities: | ||
Accounts payable - Trade | 283,933 | 285,219 |
Accounts payable - Related party | 31,680 | 31,680 |
Accrued expenses | 463,191 | 434,229 |
Deferred revenue | 1,479 | 1,533 |
Notes payable - related parties | 35,100 | 35,100 |
Secured note payable to related party | 1,217,069 | 1,199,327 |
Term notes payable | 533,066 | 533,066 |
Loan payable - bank | 39,447 | 40,107 |
Demand notes payable | 47,300 | 50,190 |
Total current liabilities | 2,652,265 | 2,610,451 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $.001 par value; 900,000,000 shares authorized, 564,590,000 and 530,000,000 shares issued and outstanding, respectively, at July 31, 2017 and April 30, 2017 | 564,590 | 530,000 |
Capital in excess of par value | 682,734 | 660,439 |
Accumulated deficit | (3,889,784) | (3,781,142) |
Total stockholders' deficit | (2,642,460) | (2,590,703) |
Total liabilities and stockholders' deficit | $ 9,805 | $ 19,748 |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jul. 31, 2017 | Apr. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ .001 | $ .001 |
Common stock, authorized | 900,000,000 | 900,000,000 |
Common stock, issued | 564,590,000 | 530,000,000 |
Common stock, outstanding | 564,590,000 | 530,000,000 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 1,933 | $ 3,741 |
Cost and expenses: | ||
Selling, general and administrative | 70,181 | 42,435 |
Depreciation | 95,265 | |
Total costs and expenses | 70,181 | 137,700 |
Loss from operations | (68,248) | (133,959) |
Other income (expense) | ||
Interest expense | (29,049) | (28,974) |
Loss on debt settlement | (12,295) | |
Other income | 950 | |
Total other income (expense) | (40,394) | (28,974) |
Net loss before taxes | (108,642) | (162,933) |
Income tax | ||
Net loss | $ (108,642) | $ (162,933) |
Basic and diluted loss per share (in dollars per share) | $ 0 | $ 0 |
Weighted average number of basic and diluted shares outstanding (in shares) | 533,572,308 | 508,000,000 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Operating activities | ||
Net loss | $ (108,642) | $ (162,933) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 33,215 | 38,248 |
Depreciation | 95,265 | |
Loss on debt settlement | 12,295 | |
Changes in non-cash working capital balances | ||
Deposits | (6,300) | |
Accounts payable | 27,676 | 2,017 |
Accounts payable - related party | (1,307) | |
Accrued expenses | 3,635 | 28,595 |
Deferred revenue | (54) | |
Cash used in operating activities | (38,175) | (115) |
Financing activities | ||
Payments on bank loan | (660) | (660) |
Proceeds from demand note payable | 21,700 | |
Proceeds from note payable - secured related party | 14,107 | |
Cash provided by (used in) financing activities | 35,147 | (660) |
Decrease in cash and cash equivalents during the period | (3,028) | (775) |
Cash and cash equivalents, beginning of the period | 3,324 | 843 |
Cash and cash equivalents, end of the period | 296 | 68 |
Cash paid for: | ||
Interest | 632 | 677 |
Income taxes | ||
Non-cash financing activities: | ||
Common stock issued for debt settlement | $ 24,590 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jul. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1– Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. Accordingly, they do not include all of 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 for a fair presentation have been included. Operating results for the three-month period ended July 31, 2017, are not necessarily indicative of the results that may be expected for the year ended April 30, 2018. For further information, refer to the audited financial statements and footnotes thereto in our Annual Report on Form 10-K for the year ended April 30, 2017. |
Going Concern Matters and Reali
Going Concern Matters and Realization of Assets | 3 Months Ended |
Jul. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Matters and Realization of Assets | Note 2 – Going Concern Matters and Realization of Assets The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. However, the Company has sustained recurring losses from its continuing operations and as of July 31, 2017, had negative working capital of $2,648,760 and a stockholders’ deficit of $2,642,460. In addition, the Company is unable to meet its obligations as they become due and sustain its operations. The Company believes that its existing cash resources are not sufficient to fund its continuing operating losses, capital expenditures, lease and debt payments and working capital requirements. The Company may not be able to raise sufficient additional debt, equity or other cash on acceptable terms, if at all. Failure to generate sufficient revenues, achieve certain other business plan objectives or raise additional funds could have a material adverse effect on the Company’s results of operations, cash flows and financial position, including its ability to continue as a going concern, and may require it to significantly reduce, reorganize, discontinue or shut down its operations. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company which, in turn, is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in its existence. Management’s plans include: 1. Seek to raise debt or equity for working capital purposes and to pay off existing debt balances. With sufficient additional cash available to the Company, it can begin to make marketing expenditures and hire people to generate more revenues, and consequently cut monthly operating losses. 2. Continue to look for software niches and other digital products that can be sold via an Internet-based store. Various acquisition opportunities may help us generate the revenues we are seeking and be a quicker path to profitability than organic growth. 3. Continue to provide advisory services to early-stage companies and assist them with capital raises. Beginning in September 2017, the Company has a Chief Executive Officer, Chief Financial Officer and Chief Technology Officer, all of whom are active in seeking new advisory opportunities. There can be no assurance that the Company will be able to achieve its business plan objectives or be able to achieve or maintain cash-flow-positive operating results. If the Company is unable to generate adequate funds from operations or raise sufficient additional funds, the Company may not be able to repay its existing debt, continue to operate its business network, respond to competitive pressures or fund its operations. As a result, the Company may be required to significantly reduce, reorganize, discontinue or shut down its operations. The financial statements do not include any adjustments that might result from this uncertainty. |
Income (Loss) Per Common Share
Income (Loss) Per Common Share | 3 Months Ended |
Jul. 31, 2017 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Common Share | Note 3 – Income (Loss) Per Common Share Income (Loss) per common share data was computed as follows: Three Months Three Months Net income (loss) $ (108,642 ) $ (162,933 ) Weighted average common shares outstanding 533,572,308 508,000,000 Effect of dilutive securities — — Weighted average dilutive common shares outstanding 533,572,308 508,000,000 Income (Loss) per common share – basic $ .00 $ (.00 ) Income (Loss) per common share – diluted $ .00 $ (.00 ) For the three-month periods ended July 31, 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. |
Principal Financing Agreements
Principal Financing Agreements | 3 Months Ended |
Jul. 31, 2017 | |
Notes to Financial Statements | |
Principal Financing Agreements | Note 4 – Principal Financing Arrangements The following table summarizes components of debt as of July 31, 2017 and April 30, 2017: July 31, 2017 April 30, 2017 Interest Rate Secured lender $ 1,217,069 $ 1,199,327 8.0% Related party notes 35,100 35,100 0.0% - 8.0% Term note payable 333,066 333,066 3.0% Term note payable 200,000 200,000 2.0% Other notes payable 47,300 50,190 0.0% - 10.0% Due to bank 39,447 40,107 5.5% Total Debt $ 1,871,982 $ 1,857,790 As of July 31, 2017 and April 30, 2017, the Company owed its principal lender (“Lender”) $1,217,069 and $1,199,327, respectively, under a loan and security agreement (“Loan”) dated April 28, 2011, that was amended on July 26, 2014 to change the maturity date to June 30, 2017. The loan is now in default for non-payment, but the Lender has not issued a default notice. The maximum amount of the Loan is $1,250,000. The Lender is also the largest shareholder of the Company, owning 227,173,207 shares of common stock, or 40% of the 564,590,000 shares issued and outstanding. In connection with the financing, the Company has agreed to certain restrictive covenants, including, among others, that the Company may not convey, sell lease, transfer or otherwise dispose of any part of its business or property, except as permitted in the agreement, dissolve, liquidate or merge with any other party unless, in the case of a merger, the Company is the surviving entity, incur any indebtedness except as defined in the agreement, create or allow a lien on any of its assets or collateral that has been pledged to the Lender, make any loans to any person, except for prepaid items or deposits incurred in the ordinary course of business, or make any material capital expenditures To secure the payment of all obligations to the lender, the Company granted to the lender a continuing security interest and first lien on all of the assets of the Company. As of July 31, 2017 and April 30, 2017, the Company’s related-party unsecured notes payable totaled $35,100. $15,000 is payable to a board member at a zero percent interest rate and $100 is payable to a former board member at a zero percent interest rate. $20,000 is payable to an entity that owns the majority of our largest shareholder. This note accrues interest at a rate of 8% per annum and is due in January 2018. The Company owes JP Morgan Chase Bank $39,447 and $40,107 and as of July 31, 2017 and April 30, 2017, respectively. The Company pays approximately $220 a month in principal payments on the outstanding balance, plus the monthly interest expense, which is calculated at a rate of 5.5% per annum. Other notes payable totaled $47,300 and $50,190 at July 31, 2017 and April 30, 2017, respectively. The notes are payable on demand, and $18,500 of the notes are convertible into common stock at a price of $0.0025 per share. The Company owes $533,066 at July 31, 2017 and April 30, 2017 to two individual note holders. A $200,000 note is due in September 2017 and accrues interest at an annual rate of 2%. The holder can convert the note into shares of common stock at a price of $0.01 per share. A second note for $333,066 accrues interest at 3% per annum and was due in June 2017. The note is technically in default, but the lender has not issued a default notice. |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5 – Income Taxes At July 31, 2017, the Company had net operating loss carryforwards for federal income tax purposes of approximately $2,100,000 that expire in the years 2018 through 2033. The Company has provided an allowance for the full value of the related deferred tax asset since it is more likely than not that none of such benefit will be realized. Utilization of the net operating losses may be subject to annual limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Due to the loss for the three-month periods ended July 31, 2017 and 2016, the Company has recorded no income tax expense in either of these three-month periods. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jul. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 – Related Party Transactions The Company’s largest shareholder is also its principal lender. As of July 31, 2017 and April 30, 2017, the Company owed its largest shareholder, under a secured lending agreement, $1,217,069 and $1,199,327 respectively. The maximum amount of the loan is $1,250,000, and the loan matured on June 30, 2017. The largest shareholder of the Company owns 227,173,207 shares of common stock, or 40% of the 564,590,000 shares issued and outstanding. The Company owes a director $31,680 as of July 31, 2017 and April 30, 2017, which is recorded as accounts payable. The Company owes a former director, who resigned on August 7, 2017, $15,000 as of July 31, 2017 and April 30, 2017. The Company owes a related party $20,000 as of July 31, 2017 and April 30, 2017 under a note payable with interest at 8% per annum, with a maturity date of November 18, 2017. The Company owes its former Chief Executive Officer and Chairman of the board of directors $100 as of July 31, 2017 and April 30, 2017. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Jul. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 7 – Stockholders’ Deficit The Company is authorized to issue 900,000,000 shares of its common stock, par value $0.001. 564,590,000 and 530,000,000 shares were outstanding as of July 31, 2017 and April 30, 2017, respectively. In the first quarter of fiscal 2018, the Company issued 10,000,000 shares of restricted stock to its chief executive officer and 24,590,000 to a creditor to settle $24,590 in debt. On May 7, 2014, the Company granted 5-year stock options that fully vest over a three year period to three consultants. Each consultant was granted an option to purchase up to 6 million shares of the Company’s common stock at a price of $0.03 per share. The stock options are fully vested as of July 31, 2017. On July 24, 2014, the Company signed a three-year consulting agreement in exchange for 6,000,000 shares of common stock. Those shares were issued in the first quarter of fiscal 2016. |
Fair Value
Fair Value | 3 Months Ended |
Jul. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 8 – Fair Value The Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. ● Level 2: inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3: inputs are unobservable inputs for the asset or liability. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, we base fair value on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market data and, therefore, are based primarily upon management’s own estimates, are often calculated based on current pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows that could significantly affect the results of current or future value. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 3 Months Ended |
Jul. 31, 2017 | |
Notes to Financial Statements | |
Stock-Based Compensation Plans | Note 9 – Stock-Based Compensation Plans The Company entered consulting agreements to issue common stock and options to purchase common stock, and recorded the applicable non-cash expense in accordance with the authoritative guidance of the Financial Accounting Standards Board. For the three-month periods ended July 31, 2017 and 2016, the Company recorded $33,215 and $38,248, respectively, in stock-based compensation expense. As of July 31, 2017, there was $3,209 of prepaid stock-based compensation expense for services that end on September 13, 2017. |
Deposits
Deposits | 3 Months Ended |
Jul. 31, 2017 | |
Deposits [Abstract] | |
Deposits | Note 10 – Deposits The company utilizes office space in Boston, Massachusetts, under a month-to-month lease agreement that allows to company to end its lease by providing 30-day written notice. The lease agreement includes a deposit of $6,300. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jul. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events Effective September 1, 2017, the board of directors of the Company approved a compensation package that awarded to each of the Company’s chief executive and chief financial officers, 20,000,000 shares of the Company’s common stock, 10,000,000 shares of which vest on the first day of employment and 10,000,000 of which vest quarterly, on a straight-line basis, over two years. In addition, the chief technology officer was granted 5,000,000 shares of common stock, vesting on a quarterly basis over a two-year period. The 10,000,000 share grant to the chief executive officer was recorded as an expense on July 28, 2017, the day she accepted the position, and the remaining 10,000,000 is being recognized as non-cash compensation expense over a two-year period. The chief financial officer accepted the position on September 5, 2017, and the compensation expense will be recognized over a two-year period, beginning in the second quarter of fiscal 2018. The stock-based compensation expense for the chief technology officer will be recognized over a two-year period, beginning in the second quarter of fiscal 2018. |
Income (Loss) Per Common Share
Income (Loss) Per Common Share (Tables) | 3 Months Ended |
Jul. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of income (loss) per common share | Income (Loss) per common share data was computed as follows: Three Months Three Months Net income (loss) $ (108,642 ) $ (162,933 ) Weighted average common shares outstanding 533,572,308 508,000,000 Effect of dilutive securities — — Weighted average dilutive common shares outstanding 533,572,308 508,000,000 Income (Loss) per common share – basic $ .00 $ (.00 ) Income (Loss) per common share – diluted $ .00 $ (.00 ) |
Principal Financing Agreements
Principal Financing Agreements (Tables) | 3 Months Ended |
Jul. 31, 2017 | |
Note 4 - Principal Financing Agreements Tables | |
Schedule of debt | The following table summarizes components of debt as of July 31, 2017 and April 30, 2017: July 31, 2017 April 30, 2017 Interest Rate Secured lender $ 1,217,069 $ 1,199,327 8.0% Related party notes 35,100 35,100 0.0% - 8.0% Term note payable 333,066 333,066 3.0% Term note payable 200,000 200,000 2.0% Other notes payable 47,300 50,190 0.0% - 10.0% Due to bank 39,447 40,107 5.5% Total Debt $ 1,871,982 $ 1,857,790 |
Going Concern Matters and Rea19
Going Concern Matters and Realization of Assets (Details Narrative) - USD ($) | Jul. 31, 2017 | Apr. 30, 2017 |
Going Concern Matters And Realization Of Assets Details Narrative | ||
Working capital | $ (2,648,760) | |
Stockholders' equity deficit | $ (2,642,460) | $ (2,590,703) |
Income (Loss) Per Common Shar20
Income (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Note 8 - Loss Per Common Share Details | ||
Net income (loss) | $ (108,642) | $ (162,933) |
Weighted average common shares outstanding | 533,572,308 | 508,000,000 |
Effect of dilutive securities | ||
Weighted average dilutive common shares outstanding | 533,572,308 | 508,000,000 |
Income (Loss) per common share - basic (in dollars per share) | $ .00 | $ (.00) |
Income (Loss) per common share - diluted (in dollars per share) | $ .00 | $ (.00) |
Principal Financing Arrangement
Principal Financing Arrangements (Details) - USD ($) | Jul. 31, 2017 | Apr. 30, 2017 |
Total Debt | $ 1,871,982 | $ 1,857,790 |
Secured Lender [Member] | ||
Total Debt | $ 1,217,069 | 1,199,327 |
Interest Rate | 8.00% | |
Term Notes Payable [Member] | ||
Total Debt | $ 333,066 | 333,066 |
Interest Rate | 3.00% | |
Term Notes Payable [Member] | ||
Total Debt | $ 200,000 | 200,000 |
Interest Rate | 2.00% | |
Other Notes Payable [Member] | ||
Total Debt | $ 47,300 | 50,190 |
Other Notes Payable [Member] | Minimum [Member] | ||
Interest Rate | 0.00% | |
Other Notes Payable [Member] | Maximum [Member] | ||
Interest Rate | 10.00% | |
Due To Bank [Member] | ||
Total Debt | $ 39,447 | 40,107 |
Interest Rate | 5.50% | |
Related Party Notes [Member] | ||
Total Debt | $ 35,100 | $ 35,100 |
Related Party Notes [Member] | Minimum [Member] | ||
Interest Rate | 0.00% | |
Related Party Notes [Member] | Maximum [Member] | ||
Interest Rate | 8.00% |