Exhibit 99.4
EVERYSTORY, INC.
CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 AND DECEMBER 31, 2015
EVERYSTORY, INC.
CONDENSED FINANCIAL STATEMENTS
| INDEX TO THE FINANCIAL STATEMENTS | PAGE NUMBER |
| Condensed Financial Statements | |
| Condensed Balance Sheets | F-3 |
| Condensed Statements of Operations | F-4 |
| Condensed Statements of Cash Flows | F-5 |
| Notes to Condensed Financial Statements | F-6 - F-12 |
| F-2 |
EVERYSTORY, INC.
CONDENSED BALANCE SHEETS
| June 30, 2016 | December 31, 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 12,580 | $ | 27,238 | ||||
| Prepaid expenses | – | 21,390 | ||||||
| Deposits | 1,000 | 1,000 | ||||||
| TOTAL CURRENT ASSETS | 13,580 | 49,628 | ||||||
| LONG TERM ASSETS | ||||||||
| Property and equipment, net | 1,175 | 1,648 | ||||||
| TOTAL LONG TERM ASSETS | 1,175 | 1,648 | ||||||
| TOTAL ASSETS | $ | 14,755 | $ | 51,276 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued liabilities | $ | 237,347 | $ | 149,965 | ||||
| Accrued interest | 49,406 | 17,993 | ||||||
| Notes payable-related party | 107,194 | 61,064 | ||||||
| Convertible notes payable, net | 193,078 | 189,243 | ||||||
| Convertible notes payable-related party, net | 29,704 | 29,114 | ||||||
| TOTAL CURRENT LIABILITIES | 616,729 | 447,379 | ||||||
| LONG TERM LIABILITIES | ||||||||
| Convertible notes payable, net | 370,000 | 270,000 | ||||||
| Convertible notes payable-related party, net | 30,000 | 30,000 | ||||||
| TOTAL LONG TERM LIABILITIES | 400,000 | 300,000 | ||||||
| TOTAL LIABILITIES | 1,016,729 | 747,379 | ||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| Preferred stock 10,000,000 Shares Authorized; $0.0001 Par Value; 0 shares issued and outstanding as at June 30, 2016 and December 31, 2015 | – | – | ||||||
| Common stock 100,000,000 Shares Authorized; $0.0001 Par Value; 2,138,000 and 2,050,000 shares issued and outstanding as of June 30, 2016 and December 31, 2015 | 214 | 205 | ||||||
| Additional paid in capital | 158,024 | 87,288 | ||||||
| Accumulated deficit | (1,160,212 | ) | (783,596 | ) | ||||
| Total Stockholders' Deficit | (1,001,974 | ) | (696,103 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 14,755 | $ | 51,276 | ||||
The accompanying notes are an integral part of these condensed financial statements
| F-3 |
EVERYSTORY, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30,
| 2016 | 2015 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| REVENUES | ||||||||
| Sales | $ | – | $ | – | ||||
| Cost of services | – | – | ||||||
| GROSS PROFIT | – | – | ||||||
| OPERATING EXPENSES | ||||||||
| Amortization and depreciation | 473 | 260 | ||||||
| General and administrative | 252,193 | 82,490 | ||||||
| Professional fees | 29,152 | 101,755 | ||||||
| TOTAL OPERATING EXPENSES | 281,818 | 184,505 | ||||||
| OPERATING LOSS | (281,818 | ) | (184,505 | ) | ||||
| OTHER EXPENSES | ||||||||
| Interest expense | (35,838 | ) | (148 | ) | ||||
| Impairment of intangible assets | (58,960 | ) | – | |||||
| TOTAL OTHER EXPENSES | (94,798 | ) | (148 | ) | ||||
| NET LOSS | $ | (376,616 | ) | $ | (184,653 | ) | ||
| WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||
| Basic and diluted | 2,061,733 | 1,403,315 | ||||||
| Loss per share | ||||||||
| Basic and diluted | $ | (0.18 | ) | $ | (0.13 | ) | ||
The accompanying notes are an integral part of these condensed financial statements
| F-4 |
EVERYSTORY, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30,
| 2016 | 2015 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income (Loss) | ||||||||
| Adjustments for non-cash items: | $ | (376,616 | ) | $ | (184,653 | ) | ||
| Amortization and depreciation | 4,898 | 260 | ||||||
| Impairment of intangible assets | 58,960 | – | ||||||
| Options issued for services | 11,785 | – | ||||||
| Operating expense paid in behalf of the company | 22,130 | 66,159 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | 21,390 | (5,000 | ) | |||||
| Deposits | – | (1,000 | ) | |||||
| Accounts payable and accrued liabilities | 87,382 | 75,475 | ||||||
| Accrued interest | 31,413 | 148 | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | (138,658 | ) | (48,611 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Property and equipment | – | (1,730 | ) | |||||
| NET CASH USED IN INVESTING ACTIVITIES | – | (1,730 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock, net | – | 10,000 | ||||||
| Proceeds from issuance of convertible notes | 100,000 | 91,333 | ||||||
| Proceeds from issuance of notes payable - related party | 85,000 | 55,000 | ||||||
| Proceeds from issuance of convertible notes - related party | – | 53,667 | ||||||
| Payments of notes payable - related party | (61,000 | ) | (5,000 | ) | ||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 124,000 | 205,000 | ||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (14,658 | ) | 154,659 | |||||
| CASH AND CASH EQUIVALENTS | ||||||||
| Beginning of period | 27,238 | 8,641 | ||||||
| End of period | $ | 12,580 | $ | 163,300 | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Intangibles purchased with common stock | $ | 58,960 | $ | 0 | ||||
The accompanying notes are an integral part of these condensed financial statements
| F-5 |
EVERYSTORY, INC.
Notes to Condensed Financial Statements
June 30, 2016 and December 31, 2015
NOTE 1 – CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2016, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2015 audited financial statements. The results of operations for the periods ended June 30, 2016 and 2015 are not necessarily indicative of the operating results for the full years.
NOTE 2 – GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $1,160,212, negative working capital of $603,149 and currently has no revenues to cover its operating costs, which raises substantial doubt about its ability to continue as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.
The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its operations and (2) to achieve adequate revenues from its operations. Management's plan to address these issues includes, (a) continued exercise of tight cost controls to conserve cash, (b) obtaining additional financing, (c) placing revenue producing services into place (d) identifying and executing on additional revenue generating opportunities.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
EveryStory was incorporated on September 6, 2013 in the State of Delaware. The Company’s primary offices are in San Diego, California. The Company’s portfolio of products and service allows you to privately share your stories with friends and family. You can even invite them to add their own photos and stories. EveryStory’s mission is to simplify technology and make it available to everyone. ‘Simplicity with a human touch’ approach is built into the Company’s products, services, and customizable apps, while centering on personalization and ease of use. EveryStory’s principal market is the United States.
Accounting Basis
The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The Company has elected a December 31 fiscal year end.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments.
| F-6 |
Loss Per Share
Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period.
Diluted loss per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities.
For the six months ended June 30, 2016 and 2015, all of the Company’s potentially dilutive securities (warrants, options, convertible preferred stock, and convertible debt) were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive Common Shares that were excluded were 131,970 and 0 at six months ended June 30, 2016 and 2015, respectively.
Recent Accounting Pronouncements
In April 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs ("ASU-2015-03"). ASU 2015-03 requires companies to present debt issuance costs as a direct deduction from the carrying value of that debt liability. ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is allowed for financial statements that have not been previously issued. Entities would apply the new guidance retrospectively to all prior periods (i.e., the balance sheet for each period is adjusted). The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
Management has considered all other recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.
NOTE 4 – PROPERTY AND EQUIPMENT
The Company’s property and equipment are comprised of the following as of June 30, 2016 and December 31, 2015:
| June 30, 2016 | December 31, 2015 | |||||||
| Computer & Equipment | 2,816 | 2,816 | ||||||
| Less: Accumulated Depreciation | (1,641 | ) | (1,168 | ) | ||||
| Net Property and Equipment | $ | 1,175 | $ | 1,648 | ||||
NOTE 5 – ASSET ACQUISITION
On June 5, 2016,the Company issued88,000 new shares for the purchase agreement of the intellectual property rights, including patents, trademarks and copyrights, of Seniors In Touch, LLC (“SIT”) at $0.67 per share for a value of $58,960. The price per share for Common Stock issued was based on the relative fair market value of the Common Stock using the backsolve valuation method.
The Company evaluated this acquisition in accordance with ASC 805, Business Combinations (10-55-4) to discern whether the assets and operations of SIT met the definition of a business. The Company concluded there were not a sufficient number of key processes obtained to develop the inputs into outputs, nor could such processes be easily obtained by the Company. Accordingly, the Company accounted for this transaction as the acquisition of assets.
| F-7 |
The transaction was accounted for in accordance with asset acquisition guidance found in ASC 805. The consideration transferred and assets acquired recognized is as follows:
| Consideration paid: | $ | |
| Common Stock | 58,960 | |
| Consideration received: | $ | |
| Intangible assets | 58,960 | |
| Net value of assets purchased: | 58,960 |
NOTE 6 – INTANGIBLE ASSETS
The Company’s intangible assets are comprised of the following of June 30, 2016 and December 31, 2015:
| June 30, 2016 | December 31, 2015 | |||||||
| Technology asset purchase | $ | 58,960 | $ | 7,100 | ||||
| Less: Accumulated Amortization | – | – | ||||||
| Less: Impairment | (58,960 | ) | (7,100 | ) | ||||
| Net Intangible Assets | $ | – | $ | – | ||||
The Company impaired intangible assets related to the technology asset purchase and patent purchase due to the no revenue production, totaling $58,960 and $7,100, for the years ended June 30, 2016 and 2015, respectively.
NOTE 7 – LOANS PAYABLE
Notes Payable – Related Parties
Notes payable due to related parties consisted of the following as of June 30, 2016 and December 31, 2015:
| Balance December 31, 2015 | $ | 61,064 | ||
| Cash additions | 85,000 | |||
| Expense additions | 22,130 | |||
| Cash payments | (61,000 | ) | ||
| Balance June 30, 2016 | $ | 107,194 |
During the six months ended June 30, 2016 and the year ended December 31, 2015, the company Founder and CEO advanced $80,000 and $110,000, expense additions of $21,130 and $68,904, and were repaid $57,000 and $75,000, respectively. The notes bear an interest rate of 0% per annum.
During the six months ended June 30, 2016 and the year ended December 31, 2015, the company Founder and CTO advanced $5,000 and $25,000, expense additions of $1,000 and $595, and were repaid $4,000 and $73,153, respectively. The notes bear an interest rate of 0% per annum.
| F-8 |
Convertible Notes Payable –Related Parties
Convertible notes payable due to related parties consisted of the following as of June 30, 2016 and December 31, 2015:
| Balance December 31, 2015 | $ | 60,000 | ||
| Cash additions | – | |||
| Expense additions | – | |||
| Debt discount from debt issuance costs | (296 | ) | ||
| Balance June 30, 2016 | $ | 59,704 | ||
| Current portion | $ | 29,704 | ||
| Long-term portion | $ | 30,000 |
On June 29, 2015, the Company issued convertible notes to two related party individuals for $30,000 that mature on December 31, 2016. The notes bear an interest rate of 12% per annum and is convertible into shares of the Company’s common stock at the lesser of 70% of the price per share paid by the investors for the next preferred stock in qualified financing or the quotient of $2,000,000 divided by the fully diluted capitalization of the company immediately prior to the closing date of the qualified financing. There were also loan service and attorney fees, which resulted in the Company recording a debt discount of $1,333 resulting from these issuance costs which is being amortized over the life of the loan to interest expense, leaving a discount balance of $296 at June 30, 2016.
On November 18, 2015, the Company issued convertible notes to two related party individuals for $30,000 that mature on November 18, 2017. The notes bear an interest rate of 12% per annum and is convertible into shares of the Company’s common stock at the lesser of 60% of the lowest price per share paid by the investors for the next preferred stock in qualified financing or the quotient of $5,000,000 divided by the fully diluted capitalization of the company immediately prior to the closing date of the qualified financing.
Convertible Notes Payable –
Notes payable due to non-related parties consisted of the following as of June 30, 2016 and December 31, 2015:
| Balance December 31, 2015 | $ | 465,000 | ||
| Cash additions | 100,000 | |||
| Debt discount from debt issuance costs | (1,922 | ) | ||
| Balance June 30, 2016 | $ | 563,078 | ||
| Current portion | $ | 193,078 | ||
| Long-term portion | $ | 370,000 |
On June 29, 2015, the Company issued convertible notes to ten unrelated individuals for $195,000 that mature on December 31, 2016. The notes bear an interest rate of 12% per annum and is convertible into shares of the Company’s common stock at the lesser of 70% of the price per share paid by the investors for the next preferred stock in qualified financing or the quotient of $2,000,000 divided by the fully diluted capitalization of the company immediately prior to the closing date of the qualified financing. There was also loan service and attorney fees, which resulted in the Company recording a debt discount of $8,667 resulting from these issuance costs which is being amortized over the life of the loan to interest expense, leaving a discount balance of $1,922 at June 30, 2016.
On October 20, 2015, the Company issued a convertible note to an unrelated individual for $5,000 that matures on October 20, 2017. The note bears an interest rate of 12% per annum and is convertible into shares of the Company’s common stock at the lesser of 60% of the lowest price per share paid by the investors for the next preferred stock in qualified financing or the quotient of $5,000,000 divided by the fully diluted capitalization of the company immediately prior to the closing date of the qualified financing.
On November 18, 2015, the Company issued convertible notes to eleven unrelated individuals for $265,000 that mature on November 18, 2017. The notes bear an interest rate of 12% per annum and is convertible into shares of the Company’s common stock at the lesser of 60% of the lowest price per share paid by the investors for the next preferred stock in qualified financing or the quotient of $5,000,000 divided by the fully diluted capitalization of the company immediately prior to the closing date of the qualified financing.
On February 9, 2016, the Company issued a convertible note to an unrelated individual for $100,000 that matures on February 9, 2018. The note bears an interest rate of 0% per annum and is convertible into shares of the Company’s common stock at the $1.60 per share.
| F-9 |
NOTE 8 –PREFERRED STOCK
The Company has authorized 10,000,000 shares of $0.0001 par value per share Preferred Stock, of which the following no preferred stock were issued and outstanding.
NOTE 9 – COMMON STOCK
On February 23, 2016 the Company amended its articles of incorporation to increase the number of authorized shares to 100,000,000. The Company has authorized 100,000,000 shares of $0.0001 par value per share Common Stock, of which 2,138,000 and 2,050,000 were issued outstanding as of June 30, 2016 and December 31, 2015, respectively. The activity surrounding the issuances of the Common Stock is as follows:
Six Months Ended June 30, 2016
The Company issued88,000 shares for the purchase agreement for the intangible assets of Seniors in Touch, LLC (SIT) at $0.67 per share for a value of $58,960. The price per share for Common Stock issued for services was based on the relative fair market value of the Common Stock using the backsolve valuation method.
Year Ended December 31, 2015
The Company issued 900,000 shares of Common Stock for net cash proceeds of $10,000 to Company founders.The Company also issued 50,000 shares of Common Stock as payment for services at $0.67 per share for a value of $33,500.The price per share for Common Stock issued for services was based on the relative fair market value of the Common Stock using the backsolve valuation method.
NOTE 10 – STOCK PURCHASE OPTIONS
The Board of Directors on 2015 approved the Company’s Stock Option Plan (“the Plan”). The purpose of the Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by employees, consultants, and other key individuals. The Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 680,000 shares of the Company's Common Stock is reserved for issuance under stock options to be issued under the Plan. The Plan permits the grant of incentive stock options, non-statutory stock options and restricted stock awards. The Plan is administered by the Board of Directors or, at its direction, a Compensation Committee comprised of officers of the Company.
Stock Purchase Options
During the six months ended June 30, 2016, the Company did not issue any stock purchase options.
During the year ended December 31, 2015, the Company issued options to purchase a total of 486,200 shares of Common Stock valued at $75,457 with multiple vesting periods. The Company issued 127,200 options in conjunction to a consulting agreement entered into in May 10, 2015 and 359,000 options issued in conjunction with employment agreements entered into during the year. The options were valued using the Black-Scholes options pricing model under the assumptions noted below. The price per share for Common Stock for the stock options was based on the relative fair market value of the Common Stock using the backsolve valuation method of applying the Option Pricing Method (OPM).
The following table summarizes the changes in options outstanding of the Company during the year ended June 30, 2016:
| Number of Options | Weighted Average Exercise Price $ | |||||||||
| Outstanding, December 31, 2015 | 486,200 | 0.67 | ||||||||
| Granted | – | – | ||||||||
| Expired | – | – | ||||||||
| Outstanding, June 30, 2016 | 486,200 | $ | 0.67 | |||||||
| Exercisable, June 30, 2016 | 268,161 | $ | 0.56 | |||||||
| F-10 |
Additional information regarding stock options as of June 30, 2016 is as follows:
| Date Issued | Number Outstanding | Number Exercisable | Exercise Price $ | Weighted Average Remaining Contractual Life (Years) | Expiration Date | Proceeds to Company if Exercised $ | ||||||
| 5/10/2015 | 197,200 | 150,533 | 0.25 | 8.87 | 5/10/2025 | 49,300 | ||||||
| 5/10/2015 | 30,000 | 10,000 | 0.50 | 8.87 | 5/10/2025 | 15,000 | ||||||
| 6/1/2015 | 42,000 | 42,000 | 1.00 | 8.93 | 6/1/2025 | 42,000 | ||||||
| 7/1/2015 | 3,000 | 3,000 | 1.00 | 9.01 | 7/1/2025 | 3,000 | ||||||
| 8/1/2015 | 8,000 | 8,000 | 1.00 | 9.09 | 8/1/2025 | 8,000 | ||||||
| 8/31/2015 | 60,000 | – | 1.00 | 9.18 | 8/31/2025 | 60,000 | ||||||
| 9/1/2015 | 9,000 | 9,000 | 1.00 | 9.18 | 9/1/2025 | 9,000 | ||||||
| 9/15/2015 | 1,000 | 1,000 | 1.00 | 9.22 | 9/15/2025 | 1,000 | ||||||
| 10/1/2015 | 36,000 | 21,001 | 1.00 | 9.26 | 10/1/2025 | 36,000 | ||||||
| 10/15/2015 | 100,000 | 23,626 | 1.00 | 9.30 | 10/15/2025 | 100,000 | ||||||
| 486,200 | 268,161 | $ 323,300 |
The following table presents the assumptions used to estimate the fair values of the stock options granted:
| June 30, 2016 | December 31, 2015 | |||
| Expected volatility | N/A | 77 - 83% | ||
| Expected dividends | N/A | 0% | ||
| Expected term | N/A | 10 Years | ||
| Risk-free interest rate | N/A | 2.04 - 2.43% |
As of June 30, 2016 there was $29,679 of unrecognized stock option expense.
NOTE 11 – FAIR VALUE MEASUREMENTS
For asset and liabilities measured at fair value, the Company uses the following hierarchy of inputs:
| ● | Level one — Quoted market prices in active markets for identical assets or liabilities; |
| ● | Level two — Inputs other than level one inputs that are either directly or indirectly observable; and |
| ● | Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
Liabilities measured at fair value on a recurring basis at June 30, 2016, are summarized as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
| Fair value of options | $ | – | $ | – | $ | – | $ | – | ||||||||||
Liabilities measured at fair value on a recurring basis at December 31, 2015, are summarized as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
| Fair value of options | $ | – | $ | 75,457 | $ | – | $ | 75,457 | ||||||||||
Fair value is calculated using the Black-Scholes options pricing model.
| F-11 |
NOTE 12- SUBSEQUENT EVENTS
In accordance with ASC 855, Company’s management reviewed all material events through the date of this filing and determined that there were the following material subsequent events to report:
During subsequent period, the Company Founder and CEO advanced $0, expense additions of $9,497, and were repaid $2,000, respectively. The notes bear an interest rate of 0% per annum.
During subsequent period, the Company Founder and CTO advanced $0, expense additions of $1,000, and were repaid $2,000, respectively. The notes bear an interest rate of 0% per annum.
On August 3, 2016, the Company entered into a promissory note purchase agreement with an unrelated individual for $20,000, which is still being closed and referrers to a Share Exchange Agreement with Knowledge Machine International, Inc. dated July 1, 2016, that matures on October 20, 2017. The note bears an interest rate of 12% per annum and is convertible into shares of the Company’s common stock at the $0.67 per share.
On September 1, 2016, the Company issued options to purchase a total of 106,100 valued at $63,678 with multiple vesting periods. The Company issued the options in conjunction with employment agreements. The price per share for Common Stock for the stock options was based on the relative fair market value of the Common Stock using the backsolve valuation method of applying the Option Pricing Method (OPM).
On September 13, 2016, the Company entered into a series A Preferred stock purchase agreement with two related individuals for 112,690 Series A preferred stock in settlement of $112,690 of related party notes.
On September 14, 2016, the Company amended a marketing and consulting agreement to issue an additional 25,000 shares of common stock at $0.67 per share for a value of $16,750.
On September 14, 2016, the Company issued 37,500 shares of common stock for in settlement of $60,000 accrued consulting fees at $0.67 per share for a value of $25,125. This resulted in a gain on settlement of debt of 34,875.
On September 21, 2016, the Company entered into an Amended and Restated Acquisition and Share Exchange Agreement with Knowledge Machine International, Inc. (“KMI”) and agreed to be taken over as a wholly owned subsidiary of KMI. Pursuant to the A&R Agreement, KMI issued 35.7733 shares of KMI common stock for each one share of EveryStory, Inc. common stock tendered. One hundred percent of the outstanding EveryStory common stock was exchanged for an aggregate of 101,436,457 shares of KMI common stock.
| F-12 |