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DATASIGHT CORPORATION

TABLE OF CONTENTS

PART 1 – FINANCIAL INFORMATION

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PART 1. – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

DATASIGHT CORPORATION

CONDENSED BALANCE SHEETS

See accompanying notes to these unaudited condensed financial statements.

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DATASIGHT CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

See accompanying notes to these unaudited condensed financial statements.

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DATASIGHT CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

See accompanying notes to these unaudited condensed financial statements.

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DATASIGHT CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. OVERVIEW

Nature of Operations

DataSight Corporation, f/k/a LED Lighting Company and Fun Media World, Inc., was incorporated under the name of Pinewood Acquisition Corporation under the laws of the State of Delaware on July 19, 2010 and was originally formed to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

On May 28, 2013, the Company’s board of directors and stockholders approved an amendment to the Company’s Certificate of Formation to change its corporate name to “LED Lighting Company”, and the amendment was filed with the Secretary of State of the State of Delaware on May 30, 2013. On May 28, 2013, new officers and directors were appointed and elected and the prior officers and directors resigned, resulting in the change of control of the Company.  

On October 8, 2018, the Company completed the Amended and Restated Exchange Agreement (the “Exchange Agreement”) with DataSight, Inc., a Nevada corporation (“DSI”), and the shareholders of DSI (the “DataSight Shareholders”) which own over 90% of the outstanding shares of DSI and all of the outstanding options issued by DSI. Under the terms of the Exchange Agreement, the Company acquired DSI through the acquisition of the outstanding stock of DSI. In exchange, the Company agreed to issue to the DataSight Shareholders 7,317,767 shares of the Company’s Series A Convertible Preferred Stock (the “Company Preferred Stock”) and will issue new options to the DataSight Shareholders which hold options. The Company Preferred Stock has 26 to 1 voting rights over the Company common stock and will automatically convert into shares of Company common stock upon the Company’s completion of a reverse stock split.

On October 11, 2018 the Company’s Board of Directors, approved, a reverse stock split in the ratio of 1 for 26 for all shares of common stock, as of a record date of October 11, 2018. As of that date there were 27,890,537 common shares outstanding.  The reverse stock split is subject to the Company receiving shareholder approval.  The Series A Convertible Preferred Stock is not subject to the reverse split.

In accordance with “reverse merger” or “reverse acquisition” accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Exchange Agreement will be replaced with the historical financial statements of DSI prior to the Exchange Agreement, in all future filings with the U.S. Securities and Exchange Commission, or SEC.

The foregoing summary and description of the terms of the transaction contemplated under the Exchange Agreement contained herein is qualified in its entirety by reference to the complete agreement, a copy of which is filed as an exhibit to the Company’s Form 8-K filed with the SEC on October 18, 2018 and incorporated herein by reference.

Going Concern

The Company has sustained operating losses and an accumulated deficit of $4,535,489 since inception of the Company on July 19, 2010 through September 30, 2018. In the nine months ended September 30, 2018, the Company incurred a loss of $64,335.  The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties.

These condensed financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiate with a business entity for the combination of that target company with the Company.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements.

Basis of Presentation

The accompanying unaudited condensed interim financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2018 and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

The accompanying unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K filed by the Company with the SEC on August 15, 2018.

Use of Estimates

In preparing these financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments.

Fair Value Measurements

ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company had no assets or liabilities required to be recorded at fair value on a recurring basis as of March 31, 2018.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September 30, 2018.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

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Income Taxes

Under ASC 740, “Income Taxes”, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of June 30, 2018, there were no deferred taxes.

Share Based Compensation

The Company applies ASC 718, Share-Based Compensation to account for its service providers’ share-based payments.  Common stock of the Company was given to service providers to retain their assistance in becoming a U.S. public company, assistance with public company regulations, investors’ communications and public relations with broker-dealers, market makers and other professional services.

In accordance with ASC 718, the Company determines whether a share payment should be classified and accounted for as a liability award or equity award.  All grants of share-based payments to service providers classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using historical pricing.  The Company has elected to recognize compensation expense based on the criteria that the stock awards vest immediately on the issuance date.  ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent period if actual forfeitures differ from initial estimates.  There were no forfeitures of share based compensation.

Net Loss Per Share

Under the provisions of ASC 260, “Earnings per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of June 30, 2018, there were no warrants or stock options outstanding.

3.  LIABILITIES TO RELATED PARTIES

Company liabilities to related parties consist of the following as of September 30, 2018 and December 31, 2017:

4.  STOCK BASED COMPENSATION

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expenses resulting from share-based payments are recorded in operating expenses in the statement of operations.

Stock Options

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

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No options are currently outstanding under the Plan.

Warrants

As of September 30, 2018, 5,418,628 warrants had been issued with an exercise price of $1.00, and all had expired unexercised. No warrants were issued during the first nine months of 2018.  

A summary of warrant activity as of September 30, 2018 and changes during the nine month period since December 31, 2017 is presented below:

5. STOCKHOLDERS’ DEFICIT

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

On August 20, 2018, effective June 30, 2018, three related parties including the Company’s CEO and two other shareholders, entered into a conversion agreement. Pursuant to the conversion agreement, the three parties agreed to convert shareholder advances of $102,129 to paid in capital.  No common or preferred shares were issued in conjunction with the conversion agreement.

During August 2018 three existing shareholders, including the Company’s former CEO, invested $50,000 to purchase 1,733,342 shares of common stock of the Company.  The investment was made at an equivalent price of $0.75 per share on a “post-split” basis (see Note 6 for discussion of the proposed 1:26 reverse stock split of common stock).  

As of September 30, 2018, the Company had 27,890,537 shares of common stock issued and outstanding, and zero shares of preferred stock issued and outstanding.   

6. SUBSEQUENT EVENT

On October 8, 2018, the Company completed the Amended and Restated Exchange Agreement (the “Exchange Agreement”) with DataSight, Inc., a Nevada corporation (“DSI”), and the shareholders of DSI (the “DataSight Shareholders”) which own over 90% of the outstanding shares of DSI and all of the outstanding options issued by DSI. Under the terms of the Exchange Agreement, the Company acquired DSI through the acquisition of the outstanding stock of DSI. In exchange, the Company agreed to issue to the DataSight Shareholders 7,317,767 shares of the Company’s Series A Convertible Preferred Stock (the “Company Preferred Stock”) and will issue new options to the DataSight Shareholders which hold options. The Company Preferred Stock has 26 to 1 voting rights over the Company common stock and will automatically convert into shares of Company common stock upon the Company’s completion of a reverse stock split.

On October 11, 2018 the Company’s Board of Directors, approved, a reverse stock split in the ratio of 1 for 26 for all shares of common stock, as of a record date of October 11, 2018. As of that date there were 27,890,537 common shares outstanding. The Series A Convertible Preferred Stock is not subject to the reverse split.

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

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

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

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

On June 16, 2017, LED Lighting Company (the “Company”) entered into a share exchange agreement (the “Share Exchange Agreement”) with The Hit Channel, Inc., a California corporation (“THC”), and the shareholders of THC (the “THC Sellers”). Under the terms of the Share Exchange Agreement, the Company will acquire THC through an acquisition of its outstanding stock. In exchange, the Company will issue to the THC Sellers up to 12,000,000 shares of Company stock (the “Company Shares”). Upon the closing of the Share Exchange Agreement, the Company would own THC as a subsidiary. THC is developing a proprietary social media and ecommerce software platform for the cannabis industry.  The Share Exchange Agreement terminated by the Company on February 19, 2018.

On October 8, 2018, the Company completed the Amended and Restated Exchange Agreement (the “Exchange Agreement”) with DataSight, Inc., a Nevada corporation (“DSI”), and the shareholders of DSI (the “DataSight Shareholders”) which own over 90% of the outstanding shares of DSI and all of the outstanding options issued by DSI. Under the terms of the Exchange Agreement, the Company acquired DSI through the acquisition of the outstanding stock of DSI. In exchange, the Company agreed to issue to the DataSight Shareholders 7,317,767 shares of the Company’s Series A Convertible Preferred Stock (the “Company Preferred Stock”) and will issue new options to the DataSight Shareholders which hold options. The Company Preferred Stock has 26 to 1 voting rights over the Company common stock and will automatically convert into shares of Company common stock upon the Company’s completion of a reverse stock split.

On October 11, 2018 the Company’s Board of Directors, approved, a reverse stock split in the ratio of 1 for 26 for all shares of common stock, as of a record date of October 11, 2018. As of that date there were 27,890,537 common shares outstanding.  The reverse stock split is subject to the Company receiving shareholder approval.  The Series A Convertible Preferred Stock is not subject to the reverse split.

The closing of the Exchange Agreement resulted in a change of control of the Company.  In accordance with “reverse merger” or “reverse acquisition” accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Exchange Agreement will be replaced with the historical financial statements of DSI prior to the Exchange Agreement, in all future filings with the U.S. Securities and Exchange Commission, or SEC.

Overview of Business and Results of Operations

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

Following the closing of the Exchange, which occurred after September 30, 2018, the Company’s business will be that of DSI, which is a data-centric company using unmanned aerial systems and specialized sensors to gather and analyze data obtained in hard-to-get environments.  

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Revenue

The Company had no revenue during the nine months ended September 30, 2018 and 2017

Net Loss

Our net loss for the nine-month period ending September 30, 2018 was $64,335 compared to $36,134 for the nine months ended September 30, 2017, as the result of higher legal, accounting and auditing fees, in preparation for the Exchange Agreement.

Liquidity and Capital Resources

As of September 30, 2018, we had cash of $3,698; total assets of $3,698 and total liabilities of $11,893.  As of December 31, 2017, the Company had cash of $71 and no other assets, and total liabilities of $126,256.  

For the nine months ended September 30, 2018, net cash used in operations was $96,569. For the nine months ended September 30, 2018, net cash provided by financing activities was $100,196, from sale of common stock and shareholder contributed capital.  Our total stockholder’s deficit at September 30, 2018 was $8,195.

To date, we have financed our operations through funding by our stockholders and the issuance of promissory notes and common stock and securities convertible into common stock. We will need to secure additional financing to continue our operations. However, we cannot provide any assurances that we will be able to raise additional funds to meet our cash needs or that we can achieve profitability. The failure to secure any financing will severely curtail our plans for future growth or in more severe scenarios the continued operations of our Company. Based on our need to raise additional funds to implement our business plans for the next twelve months, we have included a discussion concerning the presentation of our financial statements on a going concern basis in the notes to our financial statements and our independent public accountants have included a similar discussion in their opinion on our financial statements through September 30, 2018.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information not required to be filed by smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our principal executive officer and principal financial officer (who is the same person), we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report.

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

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the nine months ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

The “Risk Factors” contained in our Annual Report on Form 10-K filed with the SEC on August 15, 2018 (the “Form 10-K”) are hereby incorporated by reference herein. Readers are encouraged to read the Form 10-K including those risk factors.

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

On August 2, 2018 and August 20, 2018, the Company agreed to issue a total of 1,733,333 shares of Company common stock to three accredited investors for a total of $50,000. The proceeds were used to fund the operations of the Company. The investors were George Mainas, Gary Rockis and Kevin Kearney all of whom would be deemed to be affiliates of the Company at the time of the purchase and sale of shares.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

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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.

DATASIGHT CORPORATION

Dated: November 2, 2018

By: /s/ Lyle L. Probst

Chief Executive Officer and Acting Chief Financial Officer

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