UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2017

[   ] 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: 000-55824

TEAM 360 SPORTS INC. 
(Exact name of registrant as specified in its charter)

Nevada	33-1227600
(State or other jurisdiction	(IRS Employer Identification No.)
of Incorporation or organization)

 

163 Killian Rd.

Maple, Ontario, Canada LGA 1A8

 
(Address of principal executive offices and zip code)

(775) 882-4641 
(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. 
[X] Yes      [   ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
[X] Yes      [   ] 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	[X] Smaller Reporting company
[X] Emerging Growth company		(Do not check if smaller reporting company)

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

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

Class		Outstanding at November 14, 2017
Common stock, $0.001 par value		4,831,612

 

 

 

 

 

 

 

 

 

Team 360 Sports, Inc.

Form 10-Q

For the Nine Months Ended September 30, 2017

INDEX

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	17
Signatures		17

FORWARD-LOOKING STATEMENTS

This Report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report. Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” or similar terms, variations of such terms or the negative of such terms. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Such statements address future events and conditions concerning, among others, capital expenditures, earnings, litigation, regulatory matters, liquidity and capital resources, and accounting matters. Actual results in each case could differ materially from those anticipated in such statements by reason of factors such as future economic conditions, changes in consumer demand, legislative, regulatory and competitive developments in markets in which we operate, results of litigation, and other circumstances affecting anticipated revenues and costs, and the risk factors set forth in our Registration Statement on Form S-1 filed on March 17, 2017 .

As used in this Form 10-Q, “we,” “us,” and “our” refer to Team 360 Sports, Inc., which is also sometimes referred to as the “Company.”

YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS

The forward-looking statements made in this report on Form 10-Q relate only to events or information as of the date on which the statements are made in this report on Form 10-Q. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we expect or hope.

 

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

 

Team 360 Sports, Inc.

(formerly TSI Sports, Inc)

Condensed Balance Sheets

 

 

 

		September 30, 2017				December 31, 2016
ASSETS			(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents		$	3,137			$	1,016
Prepaid Expenses and other Current Assets			—				5,000
Total Current Assets			3,137				6,016
TOTAL ASSETS		$	3,137			$	6,016
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts Payable and Accrued Liabilities		$	2,189			$	2,277
Accrued compensation			18,750				—
Deferred revenue			10,656				12,574
Loan payable			18,896				—
Total liabilities			50,491				14,851
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT
Common stock, par value $0.001 per share; 100,000,000 shares authorized;  4,831,612  and 4,421,612  shares issued and outstanding, as of September 30, 2017 and December 31, 2016, respectively			4,832				4,422
Additional paid in capital			58,800				48,810
Accumulated deficit			(110,986	)			(62,067	)
Total stockholders' deficit			(47,354	)			(8,835	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	3,137			$	6,016

 

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

Team 360 Sports, Inc.

(formerly TSI Sports, Inc)

Condensed Statement of Operations

(unaudited)

 

 

		For the three months ended								For the nine months ended
		September 30,								September 30,
		2017				2016				2017				2016
Revenues		$	640			$	—			$	1,918			$	—
Operating expenses
Compensation expense			—				—				18,750				—
General and administrative			6,449				—				31,820				—
Total operating expense			6,449								50,570				—
Loss from operations			(6,449	)			—				(50,570	)			—
Other income (expense):
Interest expense			(76	)			—				(267	)			—
Other income			—				108				—
Total other income (expense)			(76	)			—				(267	)			—
Income before income taxes		$	(5,885	)		$	108			$	(48,919	)		$	—
Income tax expense			—				—				—				—
Net Income (Loss)			(5,885	)			108				(48,919	)			—
Net Income (Loss) per common share – basic and diluted		$	(0.01	)		$	(0.00			$	(0.01	)		$	(0.00	)
Weighted average common shares outstanding – basic and diluted			4,831,201				4,308,691				4,831,201				4,308,691

 

 

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

 

 Team 360 Sports, Inc.

(formerly TSI Sports, Inc)

Condensed Statement of Cash Flows

(unaudited)

 

		For the nine months ended September 30,
		2017				2016
OPERATING ACTIVITIES:
Net loss		$	(48,919	)		$	—
Adjustments to reconcile net loss to net cash (used in) operating activities:
Stock issued for services			400				—
Changes in net assets and liabilities -
Accounts payable and accrued expenses			170				—
Prepaid expense			5,000				—
Accrued compensation			18,750				—
Deferred revenue			(1,918	)
NET CASH USED IN OPERATING ACTIVITIES			(26,517	)			—
INVESTING ACTIVITIES:
			—				—
NET CASH USED IN INVESTING ACTIVITIES			—				—
FINANCING ACTIVITIES:
Proceeds from the sale of common stock			10,000				—
Proceeds from loans			22,638				—
Repayment of loans			(4,000	)			—
NET CASH PROVIDED BY FINANCING ACTIVITIES			28,638				—
NET INCREASE (DECREASE) IN CASH			2,121				—
CASH – BEGINNING OF PERIOD			1,016				212
CASH – END OF PERIOD		$	3,137			$	212
SUPPLEMENTAL CASHFLOW INFORMATION:
Cash paid for:
Income tax		$	—			$	—
Interest			—				—

 

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

Team 360 Sports, Inc.

(formerly TSI Sports, Inc)

Notes to the Financial Statements

(Unaudited)

September 30, 2017

 

 

Note 1 – Organization and basis of accounting

 

Basis of Presentation and Organization

 

The Company incorporated in the State of Nevada on February 26, 2013. Effective April 4, 2016, the Company changed its name from TSI Sports Inc. to Team 360 Sports Inc. The Company will provide amateur sports clubs, leagues and teams with easy to use robust digital administration management systems.

The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and SEC rules and regulations. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results may differ from those estimates. The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Registration Statement on Form S-1 for the year ended December 31, 2016 filed on March 17, 2017.

 

Note 2 – Summary of significant accounting policies

 

Cash and Cash Equivalents

 

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

Software Development Costs

 

Costs incurred to develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is capitalized and recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of:  the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product and, the straight-line method over the remaining estimated economic life (a period of three to ten years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the condensed statements of comprehensive income.  If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations.

 

Revenue Recognition

 

Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all of the criteria are met.

 

The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific objective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete.

 

In those instances, in which arrangements include significant customization, contractual milestones, acceptance criteria or other contingencies, the Company accounts for the arrangements using contract accounting, as follows:

 

·

when customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized.

·

when customer acceptance cannot be estimated based on historical evidence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained.

 

The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the accompanying consolidated balance sheets. Revenues for maintenance agreements, software support, online services and information products are recognized ratably over the term of the service agreement.

 

The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities.

 

The Company has had minimal revenues from two customers in three transactions as the Company was developing its technology and platform. One transaction on September 1, 2016 for $1,250 was for a "white label" administration scheduler software.

 

On November 1, 2016 the Company entered into a Licensing Agreement. The agreement grants the Licensee rights to grant sublicense to third parties. The license agreement calls for a one time non refundable fee of $10,000 and a $3,000 set up and training fee. The license agreement also calls for a five percent (5%) royalty on further sales by licensees, but no royalty fees have been received to date.  All fees and royalty payments are to be recognized over the life of the agreement, which terminates on December 1, 2021. On November 5, 2016 the Company received a payment of $10,000 as a non-refundable up-front payment for a non-exclusive license for use of the Company's software. Another transaction on the same date was a training fee of $3,000 in conjunction with a non-exclusive license. The Company recognized $640 during the three months ended September 30, 2017 and $1,918 of revenue during the nine months ended September 30, 2017. As of September 30, 2017 and December 31, 2016, there was deferred revenue of $10,656 and $12,574, respectively.

 

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

We classify tax-related penalties and net interest on income taxes as income tax expense. As of September 30, 2017 and September 30, 2016, no income tax expense had been incurred.

 

Estimates

 

The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. 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 as of September 30, 2017 and December 31, 2016. Actual results could differ from those estimates made by management.

 

Earnings (loss) per share

 

Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. The Company does not have any potentially dilutive instruments or common stock equivalents. Basic and diluted loss per share for the three and nine-month periods ended September 30, 2017 and September 30, 2016 are the same and if the Company had any common stock equivalents they would be excluded from the calculation because their effect is anti-dilutive

 

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers. ASU 2014-09 clarifies the principles for recognizing revenue and develops a common revenue standard under U.S. Generally Accepted Accounting Principles (“GAAP”) under which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 (as amended) is effective for the Company beginning January 1, 2018. The new standard allows application either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the adoption method and the impact ASU 2014-09 will have on the Company, but it is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

 

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. The update requires that deferred income tax assets and liabilities be classified as noncurrent in the balance sheet. For public entities, the guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company early adopted ASU 2015-17 as of December 31, 2016, on a retrospective basis to all prior balance sheet periods presented. As a result of the adoption, the Company reclassified $61,710 and $12,487 as of December 31, 2016, and December 31, 2015, respectively, from "Other Current Liabilities" in current liabilities to “Deferred Tax Liability, Net” in long term liabilities on the balance sheets. Adoption of ASU 2015-17 had no impact on the Company's current and previously reported shareholders' equity, results of operations or cash flows. The affected prior period deferred income tax account balances presented throughout this report on Form 10-K have been adjusted to reflect the retroactive adoption of ASU 2015-17.

 In January, 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities. The update simplifies the accounting and disclosures related to equity investments. The amendments in ASU 2016-01 are effective for fiscal years beginning after December 15, 2017 and for interim periods therein. Adoption of this update will not have a material impact on the Company’s financial position, results of operations or cash flows.

 In February 2016, the FASB issued ASU No. 2016-02, Leases with new lease accounting guidance. Under the new guidance, at the date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new guidance is not applicable for leases with a term of 12 months or less. Lessor accounting is largely unchanged. ASU 2016-02 is effective for the Company beginning after December 15, 2018, including interim periods within those fiscal years. The Company currently has no capital or operating leases. Accordingly, we do not expect this new guidance to have any impact on the Company’s financial position, results of operations or cash flows.

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-19 that provides a new requirement to record all of the tax effects related to share-based payments at settlement (or expiration) through the income statement. This pronouncement is effective for annual reporting periods beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018, for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures

In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15 update addressing the classification and presentation of eight specific cash flow issues that currently result in diverse practices. The amendments provide guidance in the presentation and classification of certain cash receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The amendments in this ASU should be applied using a retrospective approach. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. 

Note 3 – Going Concern

 

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 normal course of business. The Company has had minimal revenue and has accumulated a deficit of $110,986 as of September 30, 2017. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements are issued. The financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.

 

The Company has discussed ways in order to mitigate conditions or events that may raise substantial doubt about its ability to continue as a going concern, there are no assurances that any of these measures will successfully mitigate or be effective at all. (1) The Company shall pursue financing plans to raise funds to judiciously spend towards operational expenses, (2) The Company shall continue to employ low cost measures to operate its business and analyze any unnecessary cost or expense, (3) The Company will seek to avoid unnecessary expenditures, travel, and lodging costs that are not mission critical to its business, (4) The Company shall seek to continuously maximize its assets and business licensing strategies to increase revenue as well as to gain new customers.

Note 4 – Loans Payable

On January 1, 2017, the Company executed a promissory note for $4,000. The loan was repaid on January 23, 2017. The loan was unsecured, accrued interest at 10% and was due on demand.

On March 14, 2017, the same party loaned the Company $2,500 for operating expenses. The loan is unsecured, bears interest at 10% and due on demand.

On April 25, 2017, the same party loaned the Company $2,500 for operating expenses. The loan is unsecured, bears interest at 10% and due on demand.

On May 22, 2017, the same party loaned the Company $5,000 for operating expenses. The loan is unsecured, bears interest at 10% and due on demand.

On June 28, 2017, the same party loaned the Company $638 for operating expenses. The loan is unsecured, bears interest at 10% and due on demand.

On July 25, 2017, the same party loaned the Company $8,000 for operating expenses. The loan is unsecured, bears interest at 10% and due on demand.

The company also accrued $258 of interest expense during the nine month period ended September 30, 2017. As of September 30, 2019 $18,896 remains outstanding.

Note 5 – Stockholders’ Equity

On January 1, 2016, the Company issued 24,000 shares of common stock for services. The shares were issued at par of $0.001 for a total non-cash expense of $24.

On January 20, 2017, the Company sold 10,000 shares of common stock for total cash proceeds of $10,000.

Refer to Note 6 for shares issued to related parties.

Note 6 – Related party transactions

On January 1, 2016, pursuant to the terms of an Executive Management Agreement, the Company granted 100,000 shares of common stock to Mr. Sandor Miklos, President and member of the Board of Directors, for services to be rendered. Shares are deemed to be earned proportionally over twelve months. The shares were issued at par of $0.001 for a total non-cash expense of $100.

 On January 1, 2016, pursuant to the terms of an Executive and Consulting Agreement, the Company granted 100,000 shares of common stock to Mr. Simon Smith, Chief Technology Officer, for services to be rendered. Shares are deemed to be earned proportionally over twelve months. The shares were issued at par of $0.001 for a total non-cash expense of $100.

 On January 1, 2017, pursuant to the terms of an Executive Management Agreement, the Company granted 200,000 shares of common stock to Mr. Sandor Miklos, President and member of the Board of Directors, for services to be rendered. Shares are deemed to be earned proportionally over twelve months. The shares were issued at par of $0.001 for a total non-cash expense of $200.

 On January 1, 2017, pursuant to the terms of an Executive and Consulting Agreement, the Company granted 200,000 shares of common stock to Mr. Simon Smith, Chief Technology Officer, for services to be rendered. Shares are deemed to be earned proportionally over twelve months. The shares were issued at par of $0.001 for a total non-cash expense of $200.

For the three months ended September 30, 2017, Mr. Sandor Miklos, President and Member of the Board of Directors has $0 accrued compensation. For the nine months ended September 30, 2017, Mr. Sandor Miklos, President and member of the Board of Directors, has accrued compensation of $18,750. $0 has been paid as of September 30, 2017.

As of September 30, 2017, a total of 4,831,612 shares of common stock issued and outstanding.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements.

Overview

We were incorporated in Nevada on February 26, 2013, and on April 4, 2016, amended the Articles of Incorporation to change the name of the company to Team 360 Sports Inc. The Company provides amateur sports clubs, leagues and teams with easy to use robust digital administration management systems. 

The Company has had minimal revenues from two customers in three transactions as the Company was developing its technology and platform. One transaction on September 1, 2016 for $1,250 was for a "white label" administration scheduler software,

On November 1, 2016 the Company entered into a Licensing Agreement. The agreement grants the Licensee rights to grant sublicense to third parties. The license agreement calls for a one time non refundable fee of $10,000 and a $3,000 set up and training fee. The license agreement also calls for a five percent (5%) royalty on further sales by licensees, but no royalty fees have been received to date.  All fees and royalty payments are to be recognized over the life of the contract, which terminates on December 1, 2021. On November 5, 2016 the Company received a payment of $10,000 as a non-refundable up-front payment for a non-exclusive license for use of the Company's software. Another transaction on the same date was a training fee of $3,000 in conjunction with a non-exclusive license. There are no assurances that the previous customers will continue using our services as there are no existing contracts due to the nature of our business. The trend in the market place is to provide services to teams versus large organizations such as leagues and clubs. The Company is planning to move into that market place however there can be no assurances that it will succeed.

Results of Operations

Comparison of three-month periods ended September 30, 2017 and 2016

Revenue

We have generated $640 in revenues for the three-month periods ended September 30, 2017 and $0 during the period ended September 30, 2016.

Expenses

General and administration expenses for the three-month period ended September 30, 2017, amounted to $6,449, compared to $108 during the three-month period ended September 30, 2016. The Company incurred significant accounting and legal expense associated with registering the company with the Securities and Exchange Commission.

Compensation expenses for the three-month period ended September 30, 2017, amounted to $0, in addition to the three-month period ended September 30, 2016.

Other expense for the three-month period ended September 30, 2017 amounted to $76, compared to other income of $108 during the three-month period ended September 30, 2016.  The increase is primarily due to an increase in interest expense associated with the company’s increase in its loan payable, offset by $108 in refunded bank charges.

Net Loss

For the three-month period ended September 30, 2017, we incurred a net loss of $5,885, compared to a net income of $1080 for the three-month period ended September 30, 2016. The increase is primarily attributable to significant accounting and legal expense associated with registering the company with the Securities and Exchange Commission.

Comparison of nine-month periods ended September 30, 2017 and 2016

Revenue

We have generated $1,918 and $0 in revenues for the nine-month periods ended September 30, 2017 and 2016, respectively.

Expenses

General and administration expenses for the nine-month period ended September 30, 2017, amounted to $31,820, compared to $0 during the nine-month period ended September 30, 2016. The increase is primarily attributable to significant accounting and legal expense associated with registering the company with the Securities and Exchange Commission.

Compensation expenses for the nine-month period ended September 30, 2017, amounted to $18,750, compared to $0 during the nine-month period ended September 30, 2016. The Company accrued compensation expense for its Chief Executive Officer.

 

Other expense for the nine-month period ended September 30, 2017 amounted to $267, compared to $0 during the nine-month period ended September 30, 2016.  The increase is primarily due to an increase in interest expense associated with the company’s increase in its loan payable offset by refunded bank charges of $108.

Net Loss

For the nine-month period ended September 30, 2017, we incurred a net loss of $48,919, compared to a net loss of $0 for the nine-month period ended September 30, 2016. The increase is due to increased costs associated with registering the company with the Securities and Exchange Commission.

Liquidity and Capital Resources

As of September 30, 2017, we have $3,137 in current assets and $50,491 in current liabilities. Our total assets were $3,137 and our total liabilities were $50,491. We had $3,137 in cash and our working capital deficit was $47,354.

Cash Flows:

		For the nine months ended
		September 30,
		2017				2016
Cash Flows from Operating Activities		$	(26,517	)		$	—
Cash Flows from Investing Activities			—				—
Cash Flows from Financing Activities			28,638				—
Effects of Currency Translations			—				—
Net increase in cash		$	2,121			$	—

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Cash and Cash Equivalents

 

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

Software Development Costs

 

Costs incurred to develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is capitalized and recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of:  the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product and, the straight-line method over the remaining estimated economic life (a period of three to ten years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the condensed statements of comprehensive income.  If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations.

 

Revenue Recognition

 

Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all of the criteria are met.

 

The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific objective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete.

 

In those instances, in which arrangements include significant customization, contractual milestones, acceptance criteria or other contingencies, the Company accounts for the arrangements using contract accounting, as follows:

 

·

when customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized.

·

when customer acceptance cannot be estimated based on historical evidence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained.

 

The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the accompanying consolidated balance sheets. Revenues for maintenance agreements, software support, online services and information products are recognized ratably over the term of the service agreement.

 

The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities.

 

The Company has had minimal revenues from two customers in three transactions as the Company was developing its technology and platform. One transaction on September 1, 2016 for $1,250 was for a "white label" administration scheduler software.

 

On November 1, 2016 the Company entered into a Licensing Agreement. The agreement grants the Licensee rights to grant sublicense to third parties. The license agreement calls for a one time non refundable fee of $10,000 and a $3,000 set up and training fee. The license agreement also calls for a five percent (5%) royalty on further sales by licensees, but no royalty fees have been received to date.  All fees and royalty payments are to be recognized over the life of the agreement, which terminates on December 1, 2021. On November 5, 2016 the Company received a payment of $10,000 as a non-refundable up-front payment for a non-exclusive license for use of the Company's software. Another transaction on the same date was a training fee of $3,000 in conjunction with a non-exclusive license. The Company recognized $640 during the three months ended September 30, 2017 and $1,918 of revenue during the nine months ended September 30, 2017. As of September 30, 2017 and December 31, 2016, there was deferred revenue of $10,656 and $12,574, respectively.

 

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws.

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

We classify tax-related penalties and net interest on income taxes as income tax expense. As of September 30, 2017 and September 30, 2016, no income tax expense had been incurred.

 

Estimates

 

The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. 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 as of September 30, 2017 and December 31, 2016. Actual results could differ from those estimates made by management.

 

Earnings (loss) per share

 

Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. The Company does not have any potentially dilutive instruments or common stock equivalents. Basic and diluted loss per share for the three and nine-month periods ended September 30, 2017 and September 30, 2016 are the same and if the Company had any common stock equivalents they would be excluded from the calculation because their effect is anti-dilutive.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

The Company’s Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, they concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2017.

 

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the nine month period ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

These issuances of the convertible promissory notes were exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involved in any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit	Description
No.
3.1	Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1, as filed with the SEC on March 17, 2017).
3.1.1	Certificate of Amendment (incorporated by reference to our Registration Statement on Form S-1, as filed with the SEC on March 17, 2017).
3.1.1	Bylaws (incorporated by reference to our Registration Statement on Form S-1/A, as filed with the SEC on May 22, 2017).
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 *	Interactive Data Files

 

* Filed herewith.

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.

	Team 360 Sports Inc.
Dated: November 15, 2017	By:	/s/ Sandor Miklos
		Sandor Miklos
		President, Chief Executive Officer, Chairman of the Board of Directors (Principal Executive Officer)
Dated: November 15, 2017	By:	/s/ Sandor Miklos
		Sandor Miklos
		Chief Financial Officer (Principal Financial Officer and Principal
		Accounting Officer)