DATASIGHT CORP - FORM 10-Q - November 16, 2015

Attached files

file	filename
EX-32 - EXHIBIT 32 SECTION 906 CERTIFICATION - DATASIGHT CORP	f10q093015_ex32.htm
EX-31 - EXHIBIT 31 SECTION 302 CERTIFICATION - DATASIGHT CORP	f10q093015_ex31.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

X .QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

.TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 00054146

LED LIGHTING COMPANY

(Exact Name of Registrant as Specified in its Charter)


Delaware		46-3457679
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2090 Novato Blvd., Novato, California 94947

(Address of principal executive offices) (zip code)

(415) 209 – 6468

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X .

Indicate the number of shares outstanding of each of the issuer's classes of stock, as of the latest practicable date.


Class		Outstanding at November 16, 2015
Common Stock, par value $0.0001		13,157,195

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements, which reflect our views with respect to future events and financial performance. These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from such statements. These forward-looking statements are identified by, among other things, the words "anticipates", "believes", "estimates", "expects", "plans", "projects", "targets" and similar expressions. Statements in this report concerning the following are forward looking statements:

future financial and operating results;

our ability to fund operations and business plans, and the timing of any funding or corporate development transactions we may pursue;

the ability of our suppliers to provide products or services in the future of an acceptable quality on a timely and cost-effective basis;

expectations concerning market acceptance of our products;

current and future economic and political conditions;

overall industry and market trends;

management’s goals and plans for future operations; and

other assumptions described in this report underlying or relating to any forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Except to the extent required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that may cause actual results to differ from those projected include the risk factors specified below.

USE OF DEFINED TERMS

Except where the context otherwise requires and for the purposes of this report only:

· "we," "us," "our" and "Company" refer to the business of LED Lighting Company;

· "Exchange Act" refers to the United States Securities Exchange Act of 1934, as amended;

· "SEC" refers to the United States Securities and Exchange Commission;

· "Securities Act" refers to the United States Securities Act of 1933, as amended;

· "U.S. dollars," "dollars" and "$" refer to the legal currency of the United States.

FINANCIAL STATEMENTS



Condensed balance sheets as of September 30, 2015 (unaudited) and December 31, 2014		4
Condensed statements of operations for the three and nine months ended September 30, 2015 and 2014 (unaudited)		5
Condensed statements of cash flows for the nine months ended September 30, 2015 and 2014 (unaudited)		6
Notes to condensed financial statements (unaudited)		7

LED LIGHTING COMPANY

CONDENSED BALANCE SHEETS


ASSETS				September 30,		December 31,
				2015		2014
Current Assets				(Unaudited)		(Audited)
	Cash		$	-	$	27,192
	Accounts Receivable			30,000		-
	Loan receivable			84,000		84,000
	Prepaid Expenses			36,738		47,138
		Total Current Assets		150,738		158,330

		TOTAL ASSETS	$	150,738	$	158,330

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
	Bank Overdraft		$	5	$	-
	Accounts payable & accrued expenses			12,761		125,980
	Convertible promissory notes, net			-		60,032
	Note payable – related party			-		98,438
		Total Liabilities		12,766		284,450

Stockholders' Equity
	Preferred stock, $0.0001 par value, 20,000,000 shares authorized and 0 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively			-		-
	Common stock, $0.0001 par value, 100,000,000 shares authorized and 13, 157,195 shares issued and outstanding as of September 30, 2015 and 8,718,629 shares issued and outstanding as of December 31, 2014, respectively			1,316		872
	Additional paid-in capital			2,969,534		2,526,121
	Accumulated equity (deficit)			(2,832,878)		(2,653,113)
		Total Stockholders' Equity (Deficit)		137,972		(126,120)

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	150,738	$	158,330

The accompanying notes are an integral part of these unaudited condensed financial statements.

LED LIGHTING COMPANY

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


		For the Three Months Ending September 30, 2015		For the Three Months Ending September 30, 2014		For the Nine Months Ending September 30, 2015		For the Nine Months Ending September 30, 2014
Revenue	$	-	$	20,000	$	30,000	$	20,000
Cost of revenue		-		20,000		15,000		20,000
Gross Profit		-		-		15,000		-

Stock based compensation		-		89,113		-		344,447
Consulting expense		50,000		991,471		87,850		1,166,471
General and Administrative		12,185		18,648		49,430		222,975
Operating Loss		(62,185)		(1,099,232)		(122,280)		(1,733,893)
Other income (expense)
Interest expense		(2,068)		(4,611)		(53,585)		(4,611)
Other income		(3,900)		5,000		(3,900)		8,713
		(5,968)		389		(57,485)		4,102

Loss before income taxes		(68,153)		(1,098,843)		(179,765)		(1,729,791)
Income tax expense		-		-		-		-
Net loss	$	(68,153)	$	(1,098,843)	$	(179,765)	$	(1,729,791)

Loss per share – basic and diluted	$	(0.01)	$	(0.13)	$	(0.02)	$	(0.23)
Weighted average shares – basic and diluted
Weighted average shares – basic and diluted		11,480,403		8,362,132		9,396,600		7,387,275

The accompanying notes are an integral part of these unaudited condensed financial statements.

LED LIGHTING COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


				For the Nine Months ended September 30, 2015		For the Nine Months ended September 30, 2014
OPERATING ACTIVITIES:
	Net loss		$	(179,765)	$	(1,729,791)
	Adjustments to reconcile net loss to net cash
		used by operating activities
		Common stock issued for services		50,000		1,196,471
		Stock based compensation		-		89,447
		Amortization of debt discount		-		4,611
		Decrease in discount to FV of convertible note		48,967		-
	Changes in operating assets and liabilities
		Accounts receivable		(30,000)		-
		Prepaid and other current assets		10,400		(47,096)
		Accounts payable & accrued expenses		61,967		229,217
		Net cash used in operating activities		(38,431)		(257,141)
		Total Cash Flows (used) in Investing Activities		-		-

FINANCING ACTIVITIES:
	Bank Overdraft			5		-
	Advance to Company			11,234		-
	Proceeds from issuance of convertible promissory notes			-		21,500
	Proceeds from the issuance of note payable			-		20,000
	Proceeds from the issuance of common stock			-		235,000
		Net cash provided by financing activities		11,239		276,500

	Net increase (decrease) in cash			(27,192)		19,359

	Cash, beginning of period			27,192		194

	Cash, end of period		$	-	$	19,553

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Shares issued for debt settlement		$	393,856	$	260,000
	Interest Paid		$	-	$	-
	Taxes Paid		$	-	$	-

The accompanying notes are an integral part of these unaudited condensed financial statements.

LED LIGHTING COMPANY

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

LED LIGHTING COMPANY ("the Company"), formerly known as Fun Media World, Inc., was incorporated under the name of Pinewood Acquisition Corporation under the laws of the State of Delaware on July 19, 2010 and was originally formed to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

The LED Lighting Company supplies LED (light-emitting diode) light bulbs and light fixtures to the commercial, industrial and consumer/retail markets. All of our products are tested and listed by UL Underwriters Laboratories (UL) or Electrical Testing Laboratories (ETL). Additionally, all products to be supplied will be tested and in compliance with industry standards such as those set up by Energy Star, and the Illuminating Engineering Society of North America (IESNA).

On October 12, 2013, the Company had entered into an Agreement and amendment (the “Agreement”) with Goeken Group Corp. and its wholly-owned subsidiary, PolyBrite International, Inc. (“PolyBrite”) pursuant to which the Company and PolyBrite agreed to work together to secure funding for PolyBrite, retain the management consulting services, and complete a transaction in which PolyBrite will become a publicly traded company through an acquisition with the Company. The Company and PolyBrite initially anticipated the completion of the acquisition transaction would occur on or before March 31, 2014. However, the completion of the transactions described in the Agreement did not occur by December 31, 2014. The Company and Polybrite extended the term of the Agreement by amendments through October 31, 2014. The Company and Polybrite did not complete the acquisition transaction and the Agreement as amended had expired as of October 31, 2014. A Standstill Agreement between the Parties dated November 17, 2014 provided that the Company could not complete any acquisition that would prevent the Company from completing a public company transaction of Polybrite between November 17, 2014 and March 1, 2015. As that date has passed, there is currently no agreement between the Company and Polybrite regarding a transaction of this nature, and no discussions are currently ongoing in that regard between the Company and Polybrite, as management does not believe further discussions to be in the best interests of the Company.

BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The unaudited accompanying condensed financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state our results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited financial statements should be read in conjunction with the condensed financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 (2014 Form 10-K) as filed with the SEC.

In the quarter ending June 30, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.

USE OF ESTIMATES

The preparation of condensed financial statements in conformity with GAAP 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 date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of September 30, 2015 and December 31, 2014.

REVENUE RECOGNITION

We recognize revenue for our sales or services rendered when each of the following four criteria is met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectability is reasonably assured.

INCOME TAXES

Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

Due to our history of losses since inception, there is not enough evidence at this time to support that we will generate future income of a sufficient amount and nature to utilize the benefits of its net deferred tax assets. Accordingly, the deferred tax assets have been reduced by a valuation allowance, since it has been determined that it is more likely than not that all of the deferred tax assets will not be realized. Therefore, no federal or state income taxes are expected and none have been recorded as of September 30, 2015. Income taxes have been accounted for using the liability method.

LOSS PER COMMON SHARE

Basic loss per common shares excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of September 30, 2015 and December 31, 2014 there were no outstanding dilutive securities.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance 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. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The carrying amounts of financial assets and liabilities, such as cash and accrued liabilities, approximate their fair values because of the short maturity of these instruments.

The Company has sustained operating losses and has an accumulated deficit of $2,832,878 since inception of the Company on July 19, 2010 through September 30, 2015. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties.

These unaudited condensed financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiate with a business entity for the combination of that target company with the Company. The management of the Company plans to use their personal funds or seek equity or debt financing to pay all expenses incurred by the Company in 2015. There is no assurance that the Company will ever be profitable. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

Adopted

On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) – Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.

Not Adopted

On August 27, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 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, which requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). We have declined to adopt this standard in advance of the date on which adoption is required, December 15, 2016.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard beginning January 1, 2017.

We have evaluated the recent accounting pronouncements through ASU 2015-16 and believe that none of them will have a material effect on our financial statements for periods up to September 30, 2015.

NOTE 3 – LOAN RECEIVABLE

Loan receivable amounted to $84,000 as of December 31, 2014 and September 30, 2015, and consists of an advance of $70,000 made to Polybrite International, Inc. (Polybrite) for marketing expenses and fees of $14,000 earned related to the December 2013 Purchase Order Financing and Distribution Agreement that was entered into with Polybrite. The Company is a sales representative and distributor of Polybrite’s LED products. The Company is confident of receiving repayment on the loan receivable in the fourth quarter of 2015.

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following as of September 30, 2015 and December 31, 2014:


	September 30,		December 31,
	2015		2014
Accounts payable and accrued expenses	$	12,761	$	121,679
Other accrued expenses		-		4,301

	$	12,761	$	125,980

On August 4, 2015 the Company effected a conversion of all material liabilities with related and unrelated parties into equity. This enabled the Company to reduce its liabilities by a total of $393,856, including a reduction of accounts payable, accrued interest expenses and other obligations by a total of $173,116. The largest component of the Company’s accounts payable had been the $118,857 in legal services provided by the Company’s counsel, a related party, in 2014. Through the debt conversion the Company was also able to eliminate a $15,000 invoice for cost of sales presented to the Company, an obligation to pay a consultant in the amount of $25,000 for services related to marketing and sales, and an obligation to compensate a consultant in the amount of $6,750 for services related to company administration and reporting.

NOTE 5 – CONVERTIBLE PROMISSORY NOTES, RELATED PARTY

Effective November 7, 2013, the Company entered into two Secured Convertible Promissory Notes in the aggregate amount of $15,000. The notes accrued interest at 10% per annum and were due and payable in one year. On August 4, 2015 the note holders converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share, and received an equal number of warrants to purchase shares of Company common stock at a $1.00 exercise price for a term of 3 years, with a cashless exercise provision.

In July 2014, the Company entered into three Convertible Promissory Notes with investors, two of whom are related parties, and one with a Director, in the aggregate amount of $20,000. The notes accrued interest at 10% per annum and were due and payable in one year. On August 4, 2015 the note holders converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.

In August 2014, the Company entered into two Convertible Promissory Notes with related party investors in the Company in the aggregate amount of $9,000. The notes accrued interest at 10% per annum and were due and payable in one year. On August 4, 2015 the note holders converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.

In October 2014, the Company entered into two Convertible Promissory Notes with investors, one of whom is a related party, and one with a Director, in the aggregate amount of $15,000. On August 4, 2015 the note holders converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.

In November 2014, the Company issued a $50,000 Convertible Promissory Note with a related party investor in the Company. The note accrued interest at 10% per annum and was due March 1, 2015. On August 4, 2015 the note holder converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.

With regard to the $94,000 in notes issued in 2014, the Company recorded beneficial conversion features on the date of issuance that in the aggregate equals $81,468. This was recorded as a debt discount that is amortized over the term of the notes. In 2014, $32,500 of that discount was amortized. During the first quarter of 2015, amortization of debt discounts amounted to $35,534. During the second quarter of 2015, amortization of debt discounts amounted to $9,534. The remaining $3,900 of discount to face value was eliminated by conversion of convertible debt to equity, and has therefore been charged to other expense as of August 4, 2015.

Effective August 4, 2015, the Company agreed to convert all outstanding convertible debt including interest accrued ($109,000 and $10,578 respectively) into equity, issuing 1,195,780 shares of restricted common stock. The company no longer has related party convertible note debts.

NOTE 6 – NOTE PAYABLE, RELATED PARTIES

In December 2013, the Company issued an unsecured and non-interest bearing note payable for an amount of $70,000. On August 4, 2015 the note holder converted the note at the conversion price of $0.10 per share.

In April 2014, the Company issued an unsecured, 10% bearing note payable to Andrew Molasky, a related party, for services rendered as a consultant in the amount of $20,000. On August 4, 2015 the note holder converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.

In July 2014, the Company issued an unsecured, non-interest bearing note payable to Gary Rockis, a related party, for services rendered as a consultant in the amount of $8,438. On August 4, 2015 the note holder converted all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.

Effective August 4, 2015, the Company agreed to convert all these notes payable, totaling $98,438 in principal and $2,724 in accrued interest, to equity, issuing 1,011,620 shares of restricted common stock. The company no longer has related party notes payable debts.

NOTE 7 – STOCK BASED COMPENSATION

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expenses resulting from share-based payments are recorded in operating expenses in the statement of operations. There were no issuances of stock based compensation in the second quarter of 2015.

Stock Options

On May 28, 2013, the Company’s board of directors and stockholders approved the adoption of the LED Lighting Company 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan is intended to aid the Company in recruiting and retaining key employees, directors or consultants and to motivate them by providing incentives through the granting of awards of stock options or other stock based awards. The 2013 Plan is administered by the board of directors. Directors, officers, employees and consultants of the Company and its affiliates are eligible to participate under the 2013 Plan. A total of 1,500,000 shares of common stock have been reserved for awards under the 2013 Plan.

Effective October 17, 2013, the Company granted 100,000 options to purchase Common Stock under its 2013 Equity Incentive Plan to each of three consultants in consideration for services provided to the Company. The options have an exercise price of $1.00 per share and may be exercised for a period of two years from the date of grant. The grant of the options were made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in granting the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of recipients; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individuals and the Company; and (f) the recipients of the options were all accredited investors. The following assumptions were used to determine the fair value of the options of $0 at date of original grant on October 17, 2013.

The Options have no intrinsic value as their exercise price exceeds the price at which shares have been issued. A summary of option activity under the Plan as of December 31, 2014 and changes during the three fiscal quarters ended September 30, 2015 is presented below:


	Options Under the Plan	Weighted Avg Exercise Price	Avg Remaining Contractual Life [Yrs]	Weighted Avg Expire Date
Outstanding December 31, 2014	300,000	$1.00	0.80	10/17/2015
Cancelled/forfeited	-	-	-	-
Exercised	-	-	-	-
Granted Q1-Q3 2015	-	-	-	-
Outstanding September 30, 2015	300,000	$1.00	0.05	10/17/2015

Warrants

On various dates in 2013 and in connection with subscription agreements, the Company issued three-year warrants to purchase up to 3,350,000 shares of common stock at an exercise price of $1.00 per share. Since the warrants were issued in connection with a private placement and sale of Company’s common stock, there were no accounting impact related to the issuance of warrants on the accompanying financial statements.

On various dates in 2014 and in connection with the subscription agreements, the Company issued three-year warrants to purchase up to 363,333 shares of common stock at an exercise price of $1.00 per share. Since the warrants were issued in connection with a private placement and sale of Company’s common stock, there were no accounting impact related to the issuance of warrants on the accompanying financial statements Additionally, the associated warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.14%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 45%, and an expected life of 1 year. The aggregate fair value of the warrants is $31,541.

Effective June 1, 2013, the Company entered into a Consulting Agreement with Mark Wolff pursuant to which the Company has agreed to issue Mr. Wolff a Warrant to purchase up to 500,000 shares of Company common stock at an exercise price of $1.00 per share, vesting in 12 monthly increments starting on July 1, 2013 and terminating in 3 years. The Consulting Agreement was terminated as of August 1, 2013 and the vesting of the warrants terminated as of that date. These warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.14%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 103%, and an expected life of 1 year. The warrants had an aggregate fair value of $668. The Company recorded stock based compensation of $334 during the year ended December 31, 2013 related to these warrants. Due to the termination of the Agreement and settlement between the parties, no compensation was incurred in relation to these warrants in 2014.

Effective and vested on July 1, 2014, the Company entered into a consulting agreement with Andrew Molasky, a related party, for his provision of certain business consulting services to the Company. The consulting agreement provides for the Company’s issuance of 1,255,295 shares of Company common stock to Mr. Molasky in consideration for his services. The shares were valued using the price per share used in the most recent equity sale transaction of $0.75 for a total value of $941,471 which was recorded as consulting fees. In connection with the consulting agreement, the Company also issued a common stock purchase warrant to Mr. Molasky pursuant to which he may purchase up to 1,255,295 shares of Company common stock at $1.00 per share for up to three years. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $85,991 under the following assumptions: risk free interest rates of 0.10%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 48%, and an expected life of 1 year and were recorded as stock based compensation as of December 31, 2014.

Effective September 25, 2014, the Company issued a Warrant to Purchase Common Stock as stock based compensation to Mark Blackwell for services rendered, pursuant to which the Company agreed to issue him the right to purchase 300,000 shares of Company common stock for $1.00 per share for a period of 3 years. These warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.09%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 71%, and an expected life of 1 year. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $41,018.

Effective October 22, 2014, the Company entered into a Settlement Agreement and Mutual Release and Warrant Agreement (the “Settlement Documents”) with Mark Wolff pursuant to which the Company agreed to issue Mr. Wolff 50,000 shares of Company common stock and a warrant to purchase up to 150,000 shares of Company common stock for $1.00 per share for a period of 2 years, and Mr. Wolff agreed to settle and release any and all claims pursuant to the previously entered into consulting agreement and warrant dated June 1, 2013 between Mr. Wolff and the Company. The foregoing is only a brief description of the material terms of the Settlement Documents, and does not purport to be a complete description of the rights and obligations of the parties under those agreements. These warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.11%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 78%, and an expected life of 1 year. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $23,581.

As the exercise price of the warrants issued exceeded the price at which shares have been issued by the Company, the warrants have no intrinsic value.

A summary of warrant activity as of December 31, 2014 and changes during the current year is presented below:


	Warrants [ex Plan Options]		Weighted Avg Exercise Price		Avg Remaining Contractual Life [Yrs]		Weighted Average Expiration Date
Outstanding December 31, 2014	5,418,628	$1.00		1.84		11/1/2016
Cancelled/forfeited	-	-		-		-
Exercised	-	-		-		-
Granted in Q1-Q3 2015	-	-		-		-
Outstanding September 30, 2015	5,418,628	$1.00		1.09		11/1/2016

NOTE 8 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock.

Between January 17, 2014 and June 30, 2014 the Company agreed to issue to 6 accredited investors a total of 363,333 shares of Common Stock and 363,333 warrants to purchase shares of Common Stock at an exercise price of $1.00 with a 3 year term, resulting in proceeds to the Company of $235,000.

On March 17, 2014, the Company entered into a consulting agreement with Gary Rockis, a related party, for certain sales and business related consulting services in consideration for the issuance of 300,000 shares of Company common stock. The shares were valued at $225,000 using the price per share used in the most recent equity sale transaction of $0.75. On June 12, 2014, and in connection with Gary Rockis consulting agreement mentioned above, the Company issued additional 40,000 shares of Company common stock as a bonus payment. The shares were valued at $30,000 using the price per share used in the most recent equity sale transaction of $0.75.

Effective August 25, 2014, LED Lighting Company (the “Company”) entered into Debt Conversion Agreements with related parties George Mainas, J. Thomas Hannan and Kevin Kearney pursuant to which each individual agreed to convert all amounts of compensation accrued and payable to such person under the terms of their respective consulting or employment agreement as of August 31, 2014 into shares of Company common stock at $1.00 per share. The Debt Conversion Agreements resulted in the conversion of an aggregate of $260,000 into 260,000 shares of Company common stock. Mr. Mainas and Mr. Hannan also agreed that their consulting agreements would be terminated as of August 31, 2014, and Mr. Kearney agreed that no future compensation will be owed to him by the Company under his employment agreement as of August 31, 2014. The foregoing is only a brief description of the material terms of the Debt Conversion Agreements, and does not purport to be a complete description of the rights and obligations of the parties under those agreements.

On September 25, 2014, the Company issued to Mark Blackwell, an individual who had provided consulting services to the Company under a Consulting Agreement dated April 1, 2014, a Warrant to Purchase Common Stock. Exercise of the Warrant would allow Mr. Blackwell to purchase up to 300,000 shares of Company common stock for $1.00 per share for a period of 2 years from the date of issuance of the Warrant. The Fair Market Value of the warrants was determined to be $41,018.

Effective August 4, 2015, LED Lighting Company (the “Company”) agreed to convert a total of $393,856 in outstanding debt and trade payables owed to 8 Company shareholders into a total of 3,938,566 shares of restricted common stock. The issuance of shares was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities were isolated private transactions by us which did not involve a public offering; (b) there were only 8 recipients and all recipients are Company shareholders; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individuals and the Company; and (f) the recipients of the securities are all accredited investors.

Effective August 4, 2015, the Company agreed to issue to a Company consultant 500,000 shares of restricted common stock as compensation and it was valued for $50,000 for services provided to the Company. The issuance of shares were made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the securities was an accredited investor.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in the financial statements of the Company and the notes which form an integral part of the financial statements which are attached hereto. The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

LED Lighting Company ("LED Company" or the "Company") was incorporated as Pinewood Acquisition Corporation ("Pinewood") on July 19, 2010 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On May 24, 2011, the Company amended its certificate of incorporation to change its name to De Yang International Group Ltd. and on March 2, 2012, the Company amended its certificate of incorporation to change its name to Fun World Media, Inc. On May 30, 2013, the Company amended its certificate of incorporation to change its name to LED Lighting Company.

On October 7, 2010, the Company registered its common stock on a Form 10 registration statement filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 12(g) thereof. The Company files with the Securities and Exchange Commission periodic and current reports under Rule 13(a) of the Exchange Act, including quarterly reports on Form 10-Q and annual reports Form 10-K.

Overview of Business and Results of Operations

The LED Lighting Company supplies LED (light-emitting diode) light bulbs and light fixtures to the commercial, industrial and consumer/retail markets. All of the products which we distribute are tested and listed by UL Underwriters Laboratories (UL) or Electrical Testing Laboratories (ETL). Additionally, all products to be supplied are tested and in compliance with industry standards such as those set up by Energy Star, and the Illuminating Engineering Society of North America (IESNA).

Revenue

We had $30,000 in revenues during the nine month period ended September 30, 2015 compared to $20,000 during the comparative period in 2014. We had $0 in revenue for the third quarter of 2015 compared to $20,000 for the third quarter of 2015. Several sales opportunities are now pending that the Company believes it will realize during the fourth quarter of 2015. Our cost of sales related to revenues recognized in the first half of 2015 was $15,000 but the conversion of Company debt to equity included this item and therefore results in a reduction of cost of sales to $0.

Net Loss

Our net loss for the three months ended September 30, 2015 was $68,153 compared to $1,098,843 for the three months ended September 30, 2014. Our net loss for the nine months ended September 30, 2015 was $179,765 compared to $1,729,765 for the nine months ended September 30, 2014. The decrease in net loss compared to the prior year period is primarily attributable to decreases in executive compensation, stock based compensation, consulting expenses, executive compensation and costs of operations.

Liquidity and Capital Resources

As of September 30, 2015, we had cash of $0; total assets of $150,738; and total liabilities of $12,766. As of December 31, 2014, the Company had $27,192 in cash; total assets of $158,330; and total liabilities of $284,450.

For the nine months ended September 30, 2015, net cash used in operations was $38,431. Our total stockholder’s equity at September 30, 2015 was $137,972. During the first nine months of 2014, net cash used in operations was $257,141. During the first nine months of 2014, net cash gained in financing activities was $276,500, for a net gain in cash of $19,359 during that period. The Company’s total stockholder’s deficit as of December 31, 2014 was $126,120.

To date, we have financed our operations through funding by our stockholders and the issuance of promissory notes and common stock and securities convertible into common stock. We will need to secure additional financing to continue our operations. However, we cannot provide any assurances that we will be able to raise additional funds to meet our cash needs or that we can achieve profitability. The failure to secure any financing will severely curtail our plans for future growth or in more severe scenarios the continued operations of our Company. Based on our need to raise additional funds to implement our business plans for the next twelve months, we have included a discussion concerning the presentation of our financial statements on a going concern basis in the notes to our financial statements and our independent public accountants have included a similar discussion in their opinion on our financial statements through December 31, 2014.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information not required to be filed by Smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our principal executive officer and principal financial officer (who is the same person), we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report.

This Quarterly Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. As a smaller reporting company, management's report was not subject to attestation by the Company's registered public accounting firm.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ending September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

ITEM 1A. RISK FACTORS

The “Risk Factors” contained in our Annual Report on Form 10-K filed with the SEC on March 31, 2015 (the “Form 10-K”) are hereby incorporated by reference herein. Readers are encouraged to read the Form 10-K including those risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a)

Exhibits

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LED LIGHTING COMPANY

Dated: November 16, 2015

By: /s/ Kevin Kearney

Chief Executive Officer and Chief Financial Officer

DATASIGHT CORP - FORM 10-Q - November 16, 2015

Attached files

DATASIGHT CORP Reports