Attached files
| file | filename |
|---|---|
| EX-32.1 - EXHIBIT 32.1 - Appsoft Technologies, Inc. | tv480781_ex32-1.htm |
| EX-31.2 - EXHIBIT 31.2 - Appsoft Technologies, Inc. | tv480781_ex31-2.htm |
| EX-31.1 - EXHIBIT 31.1 - Appsoft Technologies, Inc. | tv480781_ex31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
| x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: December 31, 2016
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
Commission file number: 333-206764
APPSOFT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 47-3427919 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 1225 Franklin Avenue, Suite 325, Garden City, NY | 11530 | |
| (Address of registrant's principal executive offices) | (Zip Code) |
| Registrant's telephone number, including area code: | (516) 224-7717 |
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.0001 per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. ¨ Yes x No
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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
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 |
| Emerging Growth Company | x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No
The aggregate market value of voting and non-voting common equity held by non-affiliates as of April 17, 2017 was approximately $ -0- .
At April 17, 2017 there were 3,183,500 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
EXPLANATORY NOTE
AppSoft Technologies, Inc. (the “Company”) is filing this Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (this “Amendment”), as originally filed with the Securities and Exchange Commission on April 17, 2017 (the “Original Form 10-K”), to (i) amend the Report of George Stewart, CPA, Independent Registered Public Accounting Firm to delete from the signature block the date on which the report was filed with the Original Form 10-K and retain only the date on which the report originally was signed by the independent registered public accounting firm; (ii) change the heading on the Statement of Cash Flows, which currently reads that said statement is “unaudited,” to identify that the statement is “audited”; and (iii) correct the dates on the certifications of the Company’s principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 filed as Exhibits 31.1 and 31.2 with the Original Form 10-K.
As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications of our principal executive officer and principal financial officer are also being filed as exhibits to this Amendment.
Except as described above, this Amendment does not modify or update disclosures presented in the Original Form 10-K, nor does it reflect events occurring after the filing of the Original Form 10-K or modify or update those disclosures. Accordingly, this Amendment should be read in conjunction with the Original Form 10-K and the Company’s filings with the SEC subsequent to the filing of the Original Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GEORGE STEWART, CPA
316 17TH AVENUE SOUTH
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
AppSoft Technologies, Inc.
I have audited the accompanying balance sheets of AppSoft Technologies, Inc. as of December 31, 2015, and the related statements of operations, stockholders’ equity and cash flows for the period from March 24, 2015 (inception) through December 31, 2015. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AppSoft Technologies, Inc., as of December 31, 2015, and the results of its operations and cash flows for the period from March 24, 2015(inception) through December 31, 2015 in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note # B to the financial statements, the Company has had minimal operations to date and has not fully established sources of revenue. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note # B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/S/ George Stewart
Seattle, Washington
May 27, 2016
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Appsoft Technologies, Inc..
We have audited the accompanying balance sheet of Appsoft Technologies, Inc. as of December 31, 2016, and the related statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2016. Appsoft Technologies, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Appsoft Technologies, Inc. as of December 31, 2016, and the results of its operations and its cash flows for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note B to the financial statements, the Company has a history of operating losses, has limited cash resources, and its viability is dependent upon its ability to sustain future profitable operations and/or obtain necessary outside funding to pay its obligations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Fruci & Associates ll, PLLC
Spokane, WA
April 17, 2017
| F-2 |
Balance Sheets
(Audited)
| As of | As of | |||||||
| December 31, 2016 | December 31, 2015 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | - | $ | 6,324 | ||||
| TOTAL CURRENT ASSETS | - | 6,324 | ||||||
| FIXED ASSETS | ||||||||
| Computer Equipment, net | 1,871 | - | ||||||
| TOTAL FIXED ASSETS | 1,871 | - | ||||||
| OTHER ASSETS | ||||||||
| Gaming Platform, net | 57,000 | - | ||||||
| Phone Apps, net | 32,500 | 42,500 | ||||||
| TOTAL OTHER ASSETS | 89,500 | 42,500 | ||||||
| TOTAL ASSETS | $ | 91,371 | $ | 48,824 | ||||
| LIABILITIES | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts Payable and Accruals | $ | 21,051 | $ | - | ||||
| Accrued Interest | 841 | 44 | ||||||
| TOTAL CURRENT LIABILITIES | 21,892 | 44 | ||||||
| Note Payable | 41,429 | 4,000 | ||||||
| TOTAL LIABILITIES | 63,321 | 4,044 | ||||||
| COMMITMENTS AND CONTINGENCIES | $ | - | $ | - | ||||
| STOCKHOLDER’S EQUITY | ||||||||
| Series A Cumulative, Convertible Preferred stock ($0.0001 par value; 10,000,000 shares authorized; 2,000,000 shares issued and outstanding at December 31, 2016 and 2015) | $ | 200 | $ | 200 | ||||
| Common stock ($0.0001 par value; 1,000,000,000 shares authorized; 3,183,500 shares issued and outstanding at December 31, 2016; 4,110,000 shares issued and outstanding at December 31, 2015) | 318 | 411 | ||||||
| Stock Subscription Receivable | - | (400 | ) | |||||
| Additional Paid in Capital | 319,140 | 100,197 | ||||||
| Additional Paid in Capital - Stock Warrants | 42,400 | - | ||||||
| Accumulated Deficit | (334,008 | ) | (55,628 | ) | ||||
| TOTAL STOCKHOLDER’S EQUITY (DEFICIT) | 28,050 | 44,780 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY/(DEFICIT) | $ | 91,371 | $ | 48,824 | ||||
The accompanying notes are an integral part of these financial statements.
| F-3 |
Statements of Operations
(Audited)
| For the year ending December 31, | ||||||||
| 2016 | 2015 | |||||||
| Sales | $ | 2,037 | $ | 1,791 | ||||
| Total Revenue | $ | 2,037 | $ | 1,791 | ||||
| EXPENSES: | ||||||||
| Selling, General and Administrative | 66,870 | 15,277 | ||||||
| Amortization Expense | 13,000 | 7,500 | ||||||
| Depreciation Expense | 208 | - | ||||||
| Interest Expense | 799 | 44 | ||||||
| Outside Services | 154,851 | 18,930 | ||||||
| Professional Fees | 44,689 | 15,668 | ||||||
| Total Expense | 280,417 | 57,419 | ||||||
| Loss from operations | $ | (278,380 | ) | $ | (55,628 | ) | ||
| Provision for Income Taxes | $ | - | $ | - | ||||
| NET LOSS | (278,380 | ) | (55,628 | ) | ||||
| Weighted average common shares outstanding | 3,641,025 | 3,246,156 | ||||||
| Basic and fully diluted net loss per common share: | $ | (0.076 | ) | $ | (0.017 | ) | ||
The accompanying notes are an integral part of these financial statements.
| F-4 |
Statement of Stockholders’ Deficit
(Audited)
For the period from
March 24, 2015 (Inception)
through December 31, 2016
| Common Stock | Preferred Stock | Stock Subscription | Common Stock | Additional Paid-in | Additional Paid-in Capital Stock | Accumulated | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Receivable | Subscribed | Capital | Warrants | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balances, March 24, 2015 (Inception) | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | 0 | (55,628 | ) | (55,628 | ) | ||||||||||||||||||||||||||||
| Issuance of Preferred Shares | - | - | 2,000,000 | 200 | - | - | 100,208 | - | - | 100,408 | ||||||||||||||||||||||||||||||
| Issuance of Common Shares | 4,000,000 | 400 | (400 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Issuance of Common Shares for services | 110,000 | 11 | - | - | (11 | ) | - | - | - | |||||||||||||||||||||||||||||||
| Balances, December 31, 2015 | 4,110,000 | $ | 411 | 2,000,000 | $ | 200 | $ | (400 | ) | $ | - | $ | 100,197 | $ | - | $ | (55,628 | ) | $ | 44,780 | ||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | (278,380 | ) | (278,380 | ) | ||||||||||||||||||||||||||||
| Stock Subscription Paid | - | - | - | - | 400 | - | (400 | ) | - | - | - | |||||||||||||||||||||||||||||
| Issuance of Common Shares | 358,500 | 36 | - | - | - | - | 179,215 | - | - | 179,251 | ||||||||||||||||||||||||||||||
| Issuance of Common Shares for Asset Acquisition | 80,000 | 8 | - | - | - | - | 39,992 | - | - | 40,000 | ||||||||||||||||||||||||||||||
| Issuance of Common Shares for Services | 235,000 | 24 | - | - | - | - | (24 | ) | - | - | (1 | ) | ||||||||||||||||||||||||||||
| Issuance of Stock Warrants | - | - | - | - | - | - | - | 42,400 | - | 42,400 | ||||||||||||||||||||||||||||||
| Cancellation of Common Shares | (1,600,000 | ) | (160 | ) | - | - | - | - | 160 | - | - | - | ||||||||||||||||||||||||||||
| Balances, December 31, 2016 | 3,183,500 | $ | 318 | 2,000,000 | $ | 200 | $ | - | $ | - | $ | 319,140 | $ | 42,400 | $ | (334,008 | ) | $ | 28,050 | |||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-5 |
Statements of Cash Flows
(Audited)
| For the year ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (278,380 | ) | $ | (55,628 | ) | ||
| Amortization and Depreciation | 13,208 | 7,500 | ||||||
| Stock Warrant Compensation/Expense | 42,400 | - | ||||||
| Adjustments to reconcile net (loss) to net cash provided by (used in) operations: | ||||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts Receivable | - | - | ||||||
| Increase (decrease) in Accounts Payable and Other Accruals | 21,051 | - | ||||||
| Increase (decrease) in Accrued Interest Expense | 797 | 44 | ||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (200,924 | ) | (48,084 | ) | ||||
| CASH FLOWS TO/(FROM) INVESTING ACTIVITIES: | ||||||||
| Acquisition of Guuf Platform | (20,000 | ) | - | |||||
| Acquisition of Computer Equipment | (2,079 | ) | - | |||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (22,079 | ) | - | |||||
| CASH FLOWS TO/(FROM) FINANCING ACTIVITIES: | ||||||||
| Note Payable - borrowings | 41,428 | 4,000 | ||||||
| Notes Payable - repayment | (4,000 | ) | - | |||||
| Proceeds from sale of Preferred Stock | - | 50,000 | ||||||
| Proceeds from sale of Common Stock | 179,251 | |||||||
| Capital Contribution | - | 408 | ||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 216,679 | 54,408 | ||||||
| NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS | (6,324 | ) | 6,324 | |||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 6,324 | - | ||||||
| END OF THE PERIOD | $ | - | $ | 6,324 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| CASH PAID DURING THE PERIOD FOR: | ||||||||
| Interest | $ | - | $ | - | ||||
| Taxes | $ | - | $ | - | ||||
| NON CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Shares of Common Stock Issued for Purchase of Gaming Platform--80,000 shares | $ | 40,000 | $ | - | ||||
| Shares of Preferred Stock Issued for Purchase of Phones Apps--2,000,000 shares | $ | - | $ | 50,000 | ||||
| Shares of Common Stock Cancelled--1,600,000 | $ | 160 | $ | - | ||||
| Shares of Common Stock Issued for Services--330,000 | $ | (33 | ) | $ | - | |||
The accompanying notes are an integral part of these financial statements.
| F-6 |
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE A – BUSINESS ACTIVITY
AppSoft Technologies (the “Company”) was organized under the laws of the State of Nevada March 24, 2015. The Company’s fiscal year end is December 31st. The Company develops, publishes and markets mobile software applications for smartphones and tablet devices (“Apps”). We currently own a portfolio comprising over 400 Apps titles including games designed to appeal to a broad cross section of consumers and legal-related Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines and digests of court decisions rendered by federal courts. Consumers download our Apps through direct-to-consumer digital storefronts, such as the Apple App Store and Google Play Store.
We currently generate revenue from sales, or downloads, of our Apps and from advertisements published on our ad supported game titles.
NOTE B – GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated of $334,008 and cash used in operations of $200,924 at December 31, 2016.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise because of this uncertainty.
NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation- The financial statements included herein were prepared under Generally Accepted Accounting Principles (GAAP).
All adjustments have been made which in the opinion of management are necessary for presentation.
Interim filings should be read in conjunction with the Company’s annual report as of December 31, 2016.
Cash and Cash Equivalents- For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.
Management’s Use of Estimates- 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 disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.
Revenue Recognition- The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all the following criteria are met:
| (i) | persuasive evidence of an arrangement exists, |
| (ii) | the services have been rendered and all required milestones achieved, |
| (iii) | the sales price is fixed or determinable, and |
| (iv) | collectability is reasonably assured. |
Comprehensive Income (Loss) - The Company reports Comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
| F-7 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
Net Income per Common Share- Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of December 31, 2016 or December 31, 2015
Deferred Taxes- The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
Fair Value of Financial Instruments- The carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.
Accounts Receivable- Accounts deemed uncollectible are written off in the year they become uncollectible. As of December 31, 2016 and 2015, the balance in Accounts Receivable was $0.
Impairment of Long-Lived Assets- The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the periods ended December 31, 2016 or December 31, 2015.
Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Fair Value for Financial Assets and Financial Liabilities- The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at December 31, 2016 or December 31, 2016
| F-8 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at April 30, 2015, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended December 31, 2016 or December 31, 2015.
Recently Issued Accounting Pronouncements
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new guidance requires an entity to recognize the 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 and services. The new guidance supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. The new guidance does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of the new guidance by one year, which will result in the new guidance being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is evaluating the impact of adopting the new guidance on its financial statements, but does not expect the adoption to have a material impact on its financial statements.
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, that requires management to evaluate whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern. Until now, the requirement to perform a going concern evaluation existed only in auditing standards. The new guidance requires management to evaluate relevant conditions, events and certain management plans that are known or reasonably knowable as of the evaluation date when determining whether substantial doubt about an entity’s ability to continue as a going concern exists. Management will be required to make this evaluation for both annual and interim reporting periods. The standard states substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The guidance is effective for annual periods ending after December 15, 2016 and for annual periods and interim periods thereafter. Early adoption is permitted. The Company does not expect there to be a material impact from adopting this new guidance.
In January 2015, the FASB issued ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, that eliminates the concept of extraordinary items from GAAP. The objective of the new guidance is to simplify the income statement presentation requirements of GAAP. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. The guidance is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. The Company did not experience a material impact from adopting this new guidance.
In February 2015, the FASB issued ASU 2015-02, Consolidation, that provides amendments to the consolidation analysis. The amendments in this new guidance affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The guidance is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. The Company did not experience a material impact from adopting this new guidance.
| F-9 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
Recently Issued Accounting Pronouncements – Cont’d
In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, as amended in August 2015 by ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, that requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of a debt liability, consistent with debt discounts or premiums. The FASB will permit debt issuance costs related to line-of-credit arrangements to be deferred and presented as an asset and subsequently amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The recognition and measurement guidance for debt issuance costs will not be affected by the new guidance. The guidance requires retrospective application and is effective for annual periods, including interim periods within that period, beginning after December 15, 2015. The Company does not expect there to be a material impact from adopting this new guidance.
In February 2016, the FASB issued ASU 2016-02, Leases, amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The guidance will be effective in the first quarter of 2019 and allows for early adoption. The Company is assessing whether the new standard will have a material effect on its financial position or results of operations.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force), that clarifies how certain cash receipts and cash payments should be classified on the statement of cash flows. This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company does not expect there to be a material impact from adopting this new guidance.
NOTE D – SEGMENT REPORTING
The Company follows the guidance set forth by section 280-10 of the FASB Accounting Standards Codification for reporting and disclosure on operating segments of the Company. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of December 31, 2016 or December 31, 2015
| F-10 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE E – CAPITAL STOCK
The Company is authorized to issue 1,000,000,000 Common Shares at $.0001 par value per share.
In March 2015, the Company issued the following shares:
2,000,000 shares were issued to Seth Ingram, Chief Operating Officer and Treasurer, for $200.
2,000,000 shares were issued to Brian Kupchik, President, CEO and Secretary, for $200.
The $400 paid for the issuance of the shares was originally booked as a Stock Subscription Receivable and has been subsequently paid in full.
In October 2015, the Company issued the following shares for services:
110,000 shares were issued on October 1, 2015 in exchange for legal and consulting services. The shares were issued at par with a zero value for the services.
In March 2016, the Company issued the following shares:
181,600 shares were purchased under a public offering for $.50 per share for a total of $90,800.
In April 2016, the Company issued the following shares:
70,900 shares were purchased under the public offering for $.50 per share for a total of $35,450.
In June 2016, the Company issued the following shares:
80,000 shares valued at $.50 per share (total value is $40,000) as a part of the acquisition of Guuf gaming platform. Total platform purchase price was $60,000.
1,600,000 shares were cancelled as a part of the resignation of the Chief Operating Officer and Treasurer, Seth Ingram. The shares were originally issued at par.
165,000 shares were issued to 3 different consultants at par for a total of $16.
In July and August 2016, the Company issued the following shares:
55,000 shares issued to 2 different consultants at par for a total of $5.50.
106,000 shares purchased at $.50 per share for a total of $53,000 in a private offering. Each security consists of one share of common stock and two common stock purchase warrants, one of which entitles the holder to purchase one share of common stock at an exercise price of $0.25 per share and one of which entitles the holder to purchase one share of common stock at an exercise price of $0.50 per share, in each case at any time until the expiration of three years from the date of issuance. The stock purchase warrants (warrants) have been valued using the Black Scholes Model. The “warrants” with an exercise price of $.25 have been valued at $.27 per share for total of $28,620 and the “warrants” with an exercise price of $.50 have been valued at $.13 per share for a total of $13,780. The total value of the warrants issued is $42,400. The Black Scholes valuation was based on the following assumptions: a 3-year term, 40% volatility, and 3-year Treasury bill interest rate of .99%.
In October 2016, the Company issued the following shares:
15,000 shares issued to 2 different consultants at par for a total of $1.50.
Total issued and outstanding shares as of December 31, 2016 were 3,183,500 and as of December 31, 2015 were 4,110,000
| F-11 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE E – CAPITAL STOCK CONT’D
The Company is authorized to issue 10,000,000 Series A Cumulative, Convertible Preferred Shares (Preferred Stock) at $.0001 par value per share. During the period from inception (March 24, 2015) through September 30, 2016, the Company issued 2,000,000 shares of preferred stock at $.05 per share to Ventureo, LLC in exchange for $50,000 in cash and Phone Apps with a fair market value of $50,000 for a total of $100,000. The shares of “Preferred Stock” are convertible, at the option of the holder, into shares of common stock at a conversion price of $0.005 per share. The holder of the “Preferred Stock” may not convert any portion of the “Preferred Stock” if, after giving effect to such conversion, the holder would beneficially own in excess of 4.99%, except that the holder may, by written notice to the Company, increase or decrease this percentage up to a maximum of 9.99%, provided that any such increase will not be effective until the 61st day after such notice is delivered to the Company. Upon a liquidation event, the Company shall first pay to the holders of the “Preferred Stock” an amount per share equal to the Original Issue Price (i.e., $$0.05 per share of Series A Preferred Stock), plus all accrued and unpaid dividends on each share of Series A Preferred Stock (the “Series A Preference Amount”). After full payment of the liquidation preference amount to the holders of the “Preferred Stock”, the Company will then distribute the remaining assets to holders of common stock, other junior preferred shares (if any) and the “Preferred Stock” on an as-if-converted-basis.
The Series A Preferred Stock ranks senior to the Company’s common stock and senior to any other shares of preferred stock the Company may issue in the future.
Ventureo. LLC also paid $408 in expense incurred on behalf of AppSoft, Inc. and this amount is considered an additional capital contribution.
NOTE F – RELATED PARTY TRANSACTIONS
The Company has paid $15,000 in management fees (included in the Outside Services Expense line item on the Statement of Operations) to Brian Kupchik, President and CEO, during 2016. Also, a Due to Owner in the amount of $300 is included in the total Notes Payable amount in Note I below.
NOTE G – OTHER ASSET/PHONE APPS AND GAMING PLATFORM
Phone Apps
As a part of the Preferred Stock transaction (refer to Note E above), the Company acquired Phone Apps valued at $50,000. These Phone Apps are generating Sales Revenue. The Company will amortize the Phone Apps over 5 years. Management has determined that 5 years is a relatively short period. Monthly amortization is $833.34. Accumulated Amortization as of December 31, 2016 is $17,500.
eSports Tournament Platform Assets
On June 10, 2016, AppSoft Technologies, Inc. (the “Company”) acquired certain assets comprising an eSports tournament platform for competitive gamers from Guuf LLC (“Guuf”). The Company acquired the assets for a total purchase price of $60,000 (refer to Note J below). On October 1, 2016, the Company began amortizing the Phone Apps over 5 years. Management has determined that 5 years is a relatively short period. Monthly amortization is $1,000. Accumulated Amortization as of December 31, 2016 is $3,000.
NOTE H – INCOME TAX
The Company provides for income taxes under (now included under Accounting Standards Codification (ASC), 740), Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. For Federal income tax purposes, the Company has net operating loss carry forwards that expire through 2030. The net operating loss as of December 31, 2016, is approximately $278,000 and as of December 31, 2015 is $56,000 approximately
| F-12 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE H – INCOME TAX—CONT’D
No tax benefit has been reported in the financial statements because after evaluating our own potential tax uncertainties, the Company has determined that there are no material uncertain tax positions that have a greater than 50% likelihood of reversal if the Company were to be audited. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:
| Deferred Tax Asset: | December 31, 2016 | December 31, 2015 | ||||||
| NOL Carry Forward | $ | 107,000 | $ | 19,000 | ||||
| Valuation Allowances | $ | (107,000 | ) | $ | (19,000 | ) | ||
| Deferred Tax Asset | $ | - | $ | - | ||||
The Company is not obligated to pay State Income Taxes because it is a Nevada corporation.
NOTE I – NOTE PAYABLE
The Company issued a non-related party Note Payable on September 11, 2015 in the amount of $2,000. This demand note bears interest at 2% per year. The Company issued a non-related party Note Payable on December 10, 2015 in the amount of $2,000. On March 2, 2016, the $4,000 principal amount was paid. Total remaining interest accrued but not paid for this notes is $44 as of December 31, 2016.
The following demand Notes Payable were issued in 2016, from an unrelated party and bear 2% interest per year:
| Date Issued | Principal Amount | Accrued Interest at December 31, 2016 | ||||||
| June 2016 | $ | 5,000 | $ | 199.98 | ||||
| July 2016 | $ | 6,500 | $ | 238.65 | ||||
| October 2016 | $ | 9,800 | $ | 166.00 | ||||
| November 2016 | $ | 18,328 | $ | 190.72 | ||||
| December 2016 | $ | 1,800 | $ | 3.34 | ||||
| Totals | $ | 41,428 | $ | 798.69 | ||||
NOTE J – ASSET ACQUISITIONS
Acquisition of eSports Tournament Platform Assets
On September 10, 2016, AppSoft Technologies, Inc. (the “Company”) acquired certain assets comprising an eSports tournament platform for competitive gamers from Guuf LLC (“Guuf”). The Company acquired the assets for a total purchase price of $60,000 consisting of (i) $15,000 in cash, which has been paid, (ii) 80,000 shares of common stock valued at $0.50 per share (the price at which the Company sold shares to its initial public offering completed in March 2016); (iii) $5,000 in cash payable due which is included in the Company’s Accounts Payable; and (iv) the grant of a royalty equal to 5% of the first calendar year’s profits generated by the Company from the assets, a royalty equal to 4% of year two profits and royalty equal to 3% of year three profits. As additional consideration for the assets, the Company entered into consulting agreement with Nathan Cavanaugh, the sole member of Guuf, as described below.
The assets consist of the following:
| · | title to registered or unregistered trademarks and trade names; |
| · | web platform, files, source code and object code; |
| · | branding and marketing collateral; |
| · | Guuf.com domain name; |
| · | prototyped design files of Guuf’s mobile application for iOS; |
| · | web development of new Guuf features, including free play modes and mobile gaming tournaments; |
| · | strategic development of Guuf’s user achievements list and ranking and leaderboard system calculations; and |
| · | sourcing of development for new Guuf features including automated score reporting, API, mobile application for iOS, user achievements, ranking and leaderboard systems, and live streaming. |
| F-13 |
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2016
NOTE J – ASSET ACQUISITIONS—CONT’D
Acquisition of Mobile App Assets
On June 10, 2016, the Company acquired by assignment from Marc Seal certain concepts, artwork, story lines and related computer software in connection with a computer game titled “CryptoGene,” for mobile application (the “Assigned Property”), including:
| (i) | Complete “CryptoGene” intellectual property (Any active and applicable trademarks, copyrights, patents, works, etc.) |
| (ii) | CryptoGene website (www.CryptoGene.com) |
| (iii) | CryptoGene software (Video Game for mobile and computer platforms) |
| (iv) | CryptoGene: Origins (Work in Progress 50 Page Graphic Novel) |
| (v) | CryptoGene Short Story (Work in Progress 10 Page Graphic Novel) |
The assignment includes all of Mr. Seal’s right and interest in and to the intellectual property, including any right to use or disseminate CryptoGene as a mobile application or in any other medium (including all other audio-visual rights, print and allied and incidental rights), all advertising, publication and promotion rights with respect to any part of CryptoGene or any adaptation or version thereof, and all merchandising, commercial tie-in, publishing and exploitation rights.
NOTE K – FIXED ASSETS
In July 2016, the Company purchased computer equipment for $2,079. The computer equipment will be depreciated over its estimated useful life of 5 years. Annual depreciation is $415.80. Depreciation expense for the twelve months ended December 31, 2016 was $208.
NOTE L – MATERIAL EVENT
Departure of Directors or Certain Officers; Election of Directors:
On June 10, 2016, Seth Ingram resigned as a member of the board of directors. Mr. Ingram’s resignation was for personal reasons and not a result of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Upon his resignation, Mr. Ingram returned to the Company for cancellation 1.6 million of the 2 million shares of common stock registered in his name.
NOTE M – SUBSEQUENT EVENTS
The Company is taking the steps necessary to have its common stock quoted for trading in the OTC Bulletin Board Market (“OTCBB”), an interdealer quotation service for over-the-counter, or OTC, equity securities operated the Financial Regulatory Authority (“FINRA”), which permits to be eligible for quotation on OTCBB any OTC equity security that is current in certain required regulatory filings.
| F-14 |
| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
The following documents are being filed as part of this report:
| (1) | The following financial statements of the Company and the report of Fruci & Associates are included in Part II, Item 8: | |
| Report of Independent Registered Public Accounting Firm | ||
| Balance Sheets | ||
| Statements of Operations and Comprehensive Loss | ||
| Statements of Stockholders’ Equity | ||
| Statements of Cash Flows | ||
| Notes to Consolidated Financial Statements | ||
| (2) | All financial statement supporting schedules are omitted because the information is inapplicable or presented in the Notes to Consolidated Financial Statements. | |
| (3) | Exhibits. |
* The certification attached as Exhibit 32.1 that accompanies this Form 10-K/A is not deemed filed with the SEC and is not to be incorporated by reference into any filing of AppSoft Technologies, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date of this Form 10-K/A, irrespective of any general incorporation language contained in such filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| APPSOFT TECHNOLOGIES, INC. | ||
| December 5, 2017 | By: | /s/ Brian Kupchik |
| President and Chief Executive Officer | ||
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date |
| /s/ Brian Kupchik | President, Chief Executive Officer, principal executive officer | December 5, 2017 |
| and principal financial and accounting officer |