Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 31, 2019 | Sep. 13, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ValueSetters Inc. | |
Entity Central Index Key | 0001414767 | |
Trading Symbol | VSTR | |
Document Type | 10-Q | |
Emerging Growth Company | false | |
Entity Small Business | true | |
Document Period End Date | Jul. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-30 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 830,331,712 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 190 | $ 19,110 |
Accounts receivable, net | 39,000 | 6,000 |
Contract assets | 15,000 | |
Prepaid expenses | 16,877 | 25,699 |
Total current assets | 56,067 | 65,809 |
Deposits | 6,300 | 6,300 |
Investments at cost | 704,249 | 647,317 |
Total assets | 766,616 | 719,426 |
Current liabilities: | ||
Accounts payable - Trade | 278,752 | 278,752 |
Accounts payable - Related party | 16,680 | 16,680 |
Accrued expenses | 126,468 | 131,155 |
Deferred revenue | 20,664 | 15,711 |
Notes payable - related parties | 74,800 | 76,100 |
Interest payable – related parties | 28,163 | 24,102 |
Loan payable - bank | 34,324 | 34,324 |
Demand notes payable | 7,860 | 7,860 |
Total current liabilities | 587,711 | 584,684 |
Long-term secured note payable – related party | 1,000,000 | 1,000,000 |
Total Liablities | 1,587,711 | 1,584,684 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $.001 par value; 900,000,000 shares authorized, 755,331,712 and 752,519,212 shares issued and outstanding at July 31, 2019 and April 30, 2019, respectively | 755,332 | 752,519 |
Capital in excess of par value | 1,466,231 | 1,449,356 |
Accumulated deficit | (3,042,658) | (3,067,133) |
Total stockholders' deficit | (821,095) | (865,258) |
Total liabilities and stockholders' deficit | $ 766,616 | $ 719,426 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jul. 31, 2019 | Apr. 30, 2019 |
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 | 755,331,712 | 752,519,212 |
Common stock, outstanding | 755,331,712 | 752,519,212 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jan. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 118,732 | $ 91,918 |
Cost of revenues | 2,366 | 4,579 |
Gross profit | 116,366 | 87,339 |
Cost and expenses: | ||
Stock-based compensation | 28,510 | 16,216 |
Consulting fees | 39,200 | 32,000 |
Marketing | 3,539 | 6,666 |
Rent | 12,529 | 12,882 |
General and administrative | 3,380 | 24,455 |
Total costs and expenses | 87,158 | 92,219 |
Income (loss) from operations | 29,208 | (4,880) |
Other income (expense) | ||
Interest expense | (4,733) | (5,027) |
Other income | 2,700 | |
Total other income (expense) | (4,733) | (2,327) |
Net income (loss) before taxes | 24,475 | (7,207) |
Income tax | ||
Net income (loss) | $ 24,475 | $ (7,207) |
Basic earnings (loss) per share | $ 0 | $ 0 |
Diluted earnings (loss) per share | $ 0 | $ 0 |
Weighted average number of basic shares outstanding | 752,549,783 | 731,937,009 |
Weighted average number of diluted shares outstanding | 752,549,783 | 731,937,009 |
Condensed Statements of Shareho
Condensed Statements of Shareholders Deficit - USD ($) | Common Stock | Capital In Excess Of Par Value | Accumulated Deficit | Total |
Beginning balance at Apr. 30, 2018 | $ 731,694,210 | |||
Beginning balance (in shares) at Apr. 30, 2018 | 731,694 | 1,434,328 | (3,650,013) | (1,483,991) |
Net income (loss) | $ (7,207) | $ (7,207) | ||
Q1 stock-based compensation | $ 3,937,501 | |||
Q1 stock-based compensation (in shares) | 3,938 | 2,757 | 6,695 | |
Q1 stock issued for purchase | $ 200,000 | |||
Q1 stock issued for purchase (in shares) | 200 | 500 | 700 | |
Balance at Jul. 31, 2018 | $ 735,831,711 | |||
Balance (in shares) at Jul. 31, 2018 | 735,832 | 1,437,585 | (3,657,220) | (1,483,803) |
Net income (loss) | $ (20,355) | $ (20,355) | ||
Q2 stock-based compensation | $ 8,262,501 | |||
Q2 stock-based compensation (in shares | 8,262 | 3,946 | 12,208 | |
Q2 sale of common stock | $ 2,800,000 | |||
Q2 sale of common stock (in shares) | 2,800 | 2,200 | 5,000 | |
Balance at Oct. 31, 2018 | $ 746,894,212 | |||
Balance (in shares) at Oct. 31, 2018 | 746,894 | 1,443,731 | (3,677,575) | (1,486,950) |
Net income (loss) | $ 12,391 | $ 12,391 | ||
Q3 stock-based compensation | $ 2,812,500 | |||
Q3 stock-based compensation (in shares) | 2,813 | 562 | 3,375 | |
Balance at Jan. 31, 2019 | $ 749,706,712 | |||
Balance (in shares) at Jan. 31, 2019 | 749,707 | 1,444,293 | (3,665,184) | (1,471,184) |
Net income (loss) | $ 598,051 | $ 598,051 | ||
Q4 stock-based compensation | $ 2,812,500 | |||
Q4 stock-based compensation (in shares) | 2,812 | 5,063 | 7,875 | |
Balance at Apr. 30, 2019 | $ 752,519,212 | $ (865,258) | ||
Balance (in shares) at Apr. 30, 2019 | 752,519 | 1,449,356 | (3,067,133) | (865,258) |
Net income (loss) | $ 24,475 | |||
Balance at Jul. 31, 2019 | (821,095) | |||
Beginning balance at Apr. 30, 2019 | $ 752,519,212 | $ (865,258) | ||
Beginning balance (in shares) at Apr. 30, 2019 | 752,519 | 1,449,356 | (3,067,133) | (865,258) |
Net income (loss) | $ 24,475 | $ 24,475 | ||
Q1 stock-based compensation | $ 2,812,500 | |||
Q1 stock-based compensation (in shares) | 2,813 | 16,875 | 19,688 | |
Balance at Jul. 30, 2019 | $ 755,331,712 | |||
Balance (in shares) at Jul. 30, 2019 | 755,332 | 1,466,231 | (3,042,658) | (821,095) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Operating activities | ||
Net income (loss) | $ 24,475 | $ (7,207) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 28,510 | 16,216 |
Changes in non-cash working capital balances | ||
Accounts receivable | (33,000) | |
Investments | (56,932) | |
Contracts receivable | 15,000 | |
Accounts payable | (235) | |
Accrued expenses | (4,687) | 8,426 |
Interest payable – related party | 4,061 | |
Deferred revenue | 4,953 | (47) |
Cash provided by (used in) operating activities | (17,620) | 17,153 |
Financing activities | ||
Proceeds from subscription agreement | 5,000 | |
Payments on bank loan | (1,570) | |
Payments on demand note | (5,500) | |
Payments on related party note | (1,300) | |
Cash used in financing activities | (1,300) | (2,070) |
Increase (decrease) in cash and cash equivalents during the period | (18,920) | 15,083 |
Cash and cash equivalents, beginning of the period | 19,110 | 1,655 |
Cash and cash equivalents, end of the period | 190 | 16,738 |
Cash paid for: | ||
Interest | 672 | 660 |
Income taxes |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jul. 31, 2019 | |
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, 2019, are not necessarily indicative of the results that may be expected for the fiscal year ended April 30, 2020. 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, 2019. In February 2016, the FASB issued ASU 2016-2, Leases In June 2018, the FASB issued ASU 2018-7, Compensation-Stock Compensation (Topic 718), which now provides guidance for share-based payments to non-employees, resulting in alignment in accounting for employees and non-employees. The amendment is effective for public companies with fiscal years beginning after December 15, 2018. . The Company determined the impact of this pronouncement to its consolidated financial statements to be immaterial. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), which makes modifications to disclosure requirements on fair value measurements. The amendment is effective for public companies with fiscal years beginning after December 15, 2019. The Company determined the impact of this pronouncement to its consolidated financial statements to be immaterial. In August 2018, the FASB issued 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40), which reduces complexity for the accounting for the accounting for costs of implementing a cloud computing service arrangement. The amendment is effective for public companies with fiscal years beginning after December 15, 2019. The Company determined the impact of this pronouncement to its consolidated financial statements to be immaterial. |
Going Concern Matters and Reali
Going Concern Matters and Realization of Assets | 3 Months Ended |
Jul. 31, 2019 | |
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 negative working capital of $531,644 and a stockholders’ deficit of $821,095. In addition, the Company is unable to meet all of its obligations as they become due. The Company believes that its existing cash resources are not sufficient to fund its 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 make additional marketing expenditures and hire people to generate more revenues, and consequently increase cash flow from operations. 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 companies seeking to raise capital and assist them with capital raises. Management has determined, based on its recent history and its liquidity issues that it is not probable that management’s plan will sufficiently alleviate or mitigate, to a sufficient level, the relevant conditions or events noted above. Accordingly, the management of the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. 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. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Jul. 31, 2019 | |
Notes to Financial Statements | |
Revenue Recognition | Note 3 – Revenue Recognition Revenue Recognition under ASC 606 The Company recognizes service revenue from its consulting contracts and its game website using the five-step model as prescribed by ASC 606: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as, the Company satisfies a performance obligation. The Company identifies performance obligations in contracts with customers, which primarily are professional services and subscription services. The transaction price is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised services to the customer. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. The Company usually bills its customers before it provides any services, and begins performing services after the first payment is received. Contracts are typically one year or less. For larger contracts, in addition to the initial payment, the Company may allow for progress payments throughout the term of the contract. Judgments and Estimates The estimation of variable consideration for each performance obligation requires the Company to make subjective judgments. The Company enters into contracts with customers that regularly include promises to transfer multiple services, such as digital marketing, web-based videos, offering statements, and professional services. For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources, and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract. When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on the relative standalone selling prices (“SSP”) of each performance obligation. Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised service separately to a customer, such data is used to establish SSP. In instances where standalone sales data is not available for a particular performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs. The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis. Service Revenue Service revenue from subscriptions to the Company's game website is recognized over time on a ratable basis over the contractual subscription term beginning on the date that the platform is made available to the customer. Payments received in advance of subscription services being rendered are recorded as a deferred revenue. Professional services revenue is recognized over time as the services are rendered. When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve for uncollectible amounts based on the aging of the contract balance, current and historical customer trends, and communications with its customers. These reserves are recorded as operating expenses against the contract asset (Accounts Receivable). Contract Assets Contract assets are recorded for those parts of the contract consideration not yet invoiced but for which the performance obligations are completed. The revenue is recognized when the customer receives services. Contract assets are included in other current or non-current assets in the consolidated balance sheets, depending on if their reduction will be recognized during the succeeding twelve-month period or beyond. Deferred Revenue Deferred revenues represent billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of annual plan subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that will be recognized during the succeeding twelve-month period are recorded as current deferred revenues in the consolidated balance sheets, with the remainder recorded as other non-current liabilities in the consolidated balance sheets. Costs to Obtain a Customer Contract Sales commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized as other current or non-current assets and amortized on a straight-line basis over the life of the contract, which approximates the benefit period. The benefit period was estimated by taking into consideration the length of customer contracts, technology lifecycle, and other factors. All sales commissions are recorded as consulting fees within the Company's consolidated statement of operations. Remaining Performance Obligations The Company's subscription terms are typically less than one year. All of the Company’s revenues in the three-month periods ended July 31, 2019 and 2018, which amounted to $118,732 and $91,918, respectively, are considered contract revenues. Contract revenue as of July 31, 2019 and April 30, 2019, which has not yet been recognized, amounted to $20,664 and $15,711, respectively, and is recorded on the balance sheet as deferred revenue. The Company expects to recognize revenue on all of its remaining performance obligations over the next 12 months. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 3 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | Note 4 – Earnings (Loss) Per Common Income (loss) per common share data was computed as follows: Three Months Ended Net income (loss) attributable to common stockholders – basic $ 24,475 $ (7,207 ) Adjustments to net income (loss) — — Net income (loss) attributable to common stockholders – diluted $ 24,475 (7,207 ) Weighted average common shares outstanding – basic 752,549,783 731,937,009 Effect of dilutive securities — — Weighted average common shares outstanding – diluted 752,549,783 731,937,009 Earnings (loss) per common share – basic $ 0.00 (0.00 ) Earnings (loss) per common share – diluted $ 0.00 (0.00 ) For the three-month period ended July 31, 2018, the Company excluded 18,000,000 shares of common stock, issuable upon the exercise of outstanding stock options from the calculation of net loss per share because the effect would be anti-dilutive. For the three-month period ended July 31, 2019, the Company had no convertible or dilutive securities. |
Principal Financing Agreements
Principal Financing Agreements | 3 Months Ended |
Jul. 31, 2019 | |
Notes to Financial Statements | |
Principal Financing Agreements | Note 5 – Principal Financing Arrangements The following table summarizes components debt as of July 31, 2019 and April 30, 2019: July 31, April 30, 2019 Interest Rate Secured lender (affiliate) $ 1,000,000 $ 1,000,000 1.25 % Notes payable – related parties 74,800 76,100 0.0 – 8.0 % Demand notes payable 7,860 7,860 0.0 – 10.0 % Loan payable – bank 34,324 34,324 5.5 % Total Debt $ 1,116,984 $ 1,118,284 As of July 31, 2019 and April 30, 2019, the Company owed its principal lender (“Lender”) $1,000,000 under a loan and security agreement (“Loan”) dated April 28, 2011, that was amended on July 26, 2014 and again on October 31, 2017. The Lender is also the largest shareholder of the Company, owning 271,371,454 shares of common stock, or 36% of the 755,331,712 shares issued and outstanding, as of July 31, 2019. The Loan was amended on October 31, 2017 to change the maturity date to October 31, 2020, reduce the interest rate from 8% to 1.25% per annum, and reduce the default interest rate from 15% to 8% per annum (the “Amendments”). In conjunction with the Amendments, the Lender also agreed to reduce the total debt and accrued interest payable by $453,031 to $1,000,000, in exchange for the Company issuing to the Lender 44,198,246 shares of its common stock. Consequently, upon issuance of the 44,198,246 shares, the Company recorded an increase of $44,198 in common stock and $408,833 in capital in excess of par value. 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, 2019 and April 30, 2019, the Company’s related-party unsecured notes payable totaled $74,800 and $76,100, respectively. The Company also owes $34,324 as of July 31, 2019 and April 30, 2019 to Chase Bank. The Company pays interest expense to Chase Bank, which is calculated at a rate of 5.5% per annum. The debt to Chase Bank was personally guaranteed by a former Chief Executive Officer and Chairman of the Board (the “Former CEO”). The Former CEO sold shares of the Company to a third-party, and in addition to payments to the Former CEO, the contract of sale required the third-party make monthly payments to Chase Bank to pay down the money owed to Chase Bank. Total payments received from the third-party in the three months ended July 31, 2019 and 2018 amounted to $0 and $2,700, respectively. These payments were recorded as other income. Demand notes payable totaled $7,860 at July 31, 2019 and April 30, 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6 – Income Taxes At July 31, 2019 and April 30, 2019, the Company had net operating loss carryforwards for Federal income tax purposes of approximately $1,300,000 expiring in the years of 2020 through 2035. 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. The Tax Cuts and Jobs Act ("Tax Act") was enacted on December 22, 2017. Among numerous provisions, the Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. As a result of the Tax Act, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. Due to the nominal income for the three-month period ended July 31, 2019, and the availability of a tax loss carryforward to offset any potential tax, the Company has recorded no income tax expense for the three months ended July 31, 2019. Due to the loss for the three-month period ended July 31, 2018, the Company has recorded no income tax expense for the three months ended July 31, 2018. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jul. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7 – Related Party Transactions The Company’s largest shareholder is also its principal lender. As of July 31, 2019 and April 30, 2019, the Company owed its largest shareholder, under a secured lending agreement, $1,000,000 . Under the existing loan agreement, as amended, the maximum amount of the loan is $1,250,000, and the loan matures on October 31, 2020. The largest shareholder of the Company owns 271,371,454 shares of common stock, or 36% of the 755,331,712 shares issued and outstanding at July 31, 2019. Compensation to officers in the three-month periods ended July 31, 2019 and 2018 consisted of common stock valued at $19,688 and $6,695 respectively, and cash payments of $30,000 and $30,000, respectively. The Company also remitted cash payments to a related party consultant of $7,200 and $0 in the three-month periods ended July 31, 2019 and 2018, respectively. The Company owes a director $16,680 as of July 31, 2019 and April 30, 2019, which is recorded as accounts payable, plus $15,000 in a non-interest-bearing note payable. The Company owes a related party $59,800 and $61,100 as of July 31, 2019 and April 30, 2019 under a note payable with interest at 8% per annum, which had a maturity date of November 18, 2017. Accrued interest payable on related party debt amounted to $28,163 and $24,102 at July 31, 2019 and April 30, 2019, respectively. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 8 – Stockholders’ Deficit The Company is authorized to issue 900,000,000 shares of its common stock, par value $0.001. 755,331,212 and 752,519,212 shares were outstanding as of July 31, 2019 and April 30, 2019, respectively. In the first quarter of fiscal 2020, the Company issued an aggregate of 2,812,500 shares of restricted stock to its chief executive officer, chief financial officer and chief marketing officer as compensation. The shares were valued at $19,688. In the first quarter of fiscal 2019, the Company issued 200,000 restricted shares of stock in conjunction with the purchase of a virtual reality game known as SpaceoutVR. The Company also issued 3,937,501 restricted shares of common stock as part of stock-based compensation agreements. Shares issued for compensation amounted to 3,625,000 shares to Company officers, and 312,501 to a consultant. Compensation expense was recorded of $8,822 for the three-month periods ended July 31, 2019 and 2018 for previously issued shares in conjunction with a consulting agreement. |
Fair Value
Fair Value | 3 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 9 – 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. Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Level 1 Level 2 Level 3 Total July 31, 2019 Investments at cost $ — $ — $ 704,249 $ 704,249 April 30, 2019 Investments at cost $ — $ — $ 647,317 $ 647,317 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. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 3 Months Ended |
Jul. 31, 2019 | |
Notes to Financial Statements | |
Stock-Based Compensation Plans | Note 10 – Stock-Based Compensation Plans The Company entered consulting agreements to issue 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, 2019 and 2018, the Company recorded $28,510 and $16,216, respectively, in stock-based compensation expense. As of July 31, 2019, there was $16,877 of prepaid stock-based compensation expense for services that end in January 2020. As of July 31, 2019, an aggregate of 3,437,500 shares of common stock can be earned by our chief marketing officer from unvested stock grants. These shares vest at a rate of 312,500 shares per quarter, over the next eleven quarters. |
Deposits and Commitments
Deposits and Commitments | 3 Months Ended |
Jul. 31, 2019 | |
Deposits [Abstract] | |
Deposits and Commitments | Note 11 – Deposits and Commitments 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. |
Concentrations
Concentrations | 3 Months Ended |
Jul. 31, 2019 | |
Notes to Financial Statements | |
Concentrations | Note 12 – Concentrations For the three-month period ended July 31, 2019, the Company had one customer that constituted 81% of its revenues. For the three-month period ended July 31, 2018, the Company had a different customer that constituted 82% of its revenues. At July 31, 2019 one customer accounted for 100% of the net amount of accounts receivable and at April 30, 2019 a different customer accounted for 100% of the net amount of accounts receivable. |
Investments
Investments | 3 Months Ended |
Jul. 31, 2019 | |
Investments [Abstract] | |
Investments | Note 13 – Investments During fiscal 2019, the Company entered into a consulting contract with NetCapital Systems LLC (“Netcapital”), which allows the Company to receive up to 1,000 membership interest units of NetCapital in return for consulting services. As of July 31, 2019 and April 30, 2019, the Company had earned 771 and 709 membership interest units, respectively, and the remaining 229 units can be earned on a straight-line basis over the 11-month period ended June 30, 2020. The Company valued the membership interest units at $704,249 and $647,317, at July 31, 2019 and April 30, 2019, respectively, based upon a private sale of Netcapital membership interest units in which an accredited investor purchased Netcapital membership interest units at a per unit price of $913 in an arms-length transaction. Such value is consistent with the standard hourly billing rate of $500 per hour charged by the Company for consulting services. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jul. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events The Company signed two contracts that will generate revenue for the Company in the second quarter of fiscal 2020, when the Company’s performance obligations are satisfied. In August 2019 the Company received a $90,000 fee under an advisory service agreement to perform and deliver a comprehensive transition plan for the transformative use of an airport campus. The engagement is for services through October 11, 2019. On August 1, 2019 the Company signed a three-month marketing and advisory services agreement for a fee of $540,000. Payment to the Company was 300,000 membership interest units that trade at $1.80 per unit. The Company is current with its performance obligations for both of these contracts through the date these financial statements were available to be issued. On September 9, 2019, the Company signed a two-year stock-based compensation agreement with its Chief Executive Officer. The Company issued 25 million shares of its common stock in conjunction with this agreement. On September 9, 2019, the Company signed a two-year stock-based compensation agreement with its Chief Financial Officer. The Company issued 25 million shares of its common stock in conjunction with this agreement. On September 9, 2019, the Company signed two-year stock-based compensation agreements with two consultants. The Company issued 12,500,000 shares of its common stock to each consultant in conjunction with these agreements. The Company evaluated subsequent events through the date these financial statements were available to be issued. There were no other material subsequent events that required recognition or additional disclosure in these financial statements. |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per common share | Three Months Ended Net income (loss) attributable to common stockholders – basic $ 24,475 $ (7,207 ) Adjustments to net income (loss) — — Net income (loss) attributable to common stockholders – diluted $ 24,475 (7,207 ) Weighted average common shares outstanding – basic 752,549,783 731,937,009 Effect of dilutive securities — — Weighted average common shares outstanding – diluted 752,549,783 731,937,009 Earnings (loss) per common share – basic $ 0.00 (0.00 ) Earnings (loss) per common share – diluted $ 0.00 (0.00 ) |
Principal Financing Agreements
Principal Financing Agreements (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Note 4 - Principal Financing Agreements Tables | |
Schedule of debt | July 31, April 30, 2019 Interest Rate Secured lender (affiliate) $ 1,000,000 $ 1,000,000 1.25 % Notes payable – related parties 74,800 76,100 0.0 – 8.0 % Demand notes payable 7,860 7,860 0.0 – 10.0 % Loan payable – bank 34,324 34,324 5.5 % Total Debt $ 1,116,984 $ 1,118,284 |
Fair Value (Table)
Fair Value (Table) | 3 Months Ended |
Jul. 31, 2019 | |
Fair Value Table Abstract | |
Schedule of fair values | Level 1 Level 2 Level 3 Total July 31, 2019 Investments at cost $ — $ — $ 704,249 $ 704,249 April 30, 2019 Investments at cost $ — $ — $ 647,317 $ 647,317 |
Going Concern Matters and Rea_2
Going Concern Matters and Realization of Assets (Details Narrative) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Going Concern Matters And Realization Of Assets Details Narrative | ||
Working capital | $ 531,644 | |
Stockholders' equity deficit | $ (821,095) | $ (865,258) |
Income (Loss) Per Common Share
Income (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jan. 31, 2018 | |
Note 8 - Loss Per Common Share Details | ||
Net income (loss) attributable to common stockholders – basic | $ 24,475 | $ (7,207) |
Adjustments to net income (loss) | ||
Net income (loss) attributable to common stockholders – diluted | $ 24,475 | $ (7,207) |
Weighted average common shares outstanding - basic | 752,549,783 | 731,937,009 |
Effect of dilutive securities | ||
Weighted average common shares outstanding – diluted | 752,549,783 | 731,937,009 |
Earnings (loss) per common share - basic | $ 0 | $ 0 |
Earnings (loss) per common share - diluted | $ 0 | $ 0 |
Principal Financing Arrangement
Principal Financing Arrangements (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Total Debt | $ 1,116,984 | $ 1,118,284 |
Secured Lender [Member] | ||
Total Debt | $ 1,000,000 | $ 1,000,000 |
Interest Rate | 1.25% | 1.25% |
Related Party Notes [Member] | ||
Total Debt | $ 74,800 | |
Interest Rate | 8.00% | |
Related Party Notes [Member] | Minimum [Member] | ||
Interest Rate | 0.00% | |
Related Party Notes [Member] | Maximum [Member] | ||
Total Debt | $ 76,100 | |
Interest Rate | 8.00% | |
Term Notes Payable Minimum [Member] | ||
Total Debt | $ 7,860 | |
Interest Rate | 10.00% | 0.00% |
Term Notes Payable Maximum [Member] | ||
Total Debt | $ 7,860 | |
Interest Rate | 10.00% | |
Due To Bank [Member] | ||
Total Debt | $ 34,324 | $ 37,487 |
Interest Rate | 5.50% | 5.50% |
Fair Value (Details)
Fair Value (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Fair Value, Inputs, Level 1 [Member] | ||
Investments at cost | ||
Fair Value, Inputs, Level 2 [Member] | ||
Investments at cost | ||
Fair Value, Inputs, Level 3 [Member] | ||
Investments at cost | $ 704,249 | $ 647,317 |