Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes []   No [X].

Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes [] No [X].

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 (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes [X]  No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K is contained in this form and no disclosure will 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. [X]

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "small reporting company" in Rule 12b-2 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 []  No [X].

 

 

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FORM 10-K

NEXUS ENTERPRISE SOLUTIONS, INC.

INDEX

 

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For purposes of this report, unless otherwise indicated or the context otherwise requires, all references herein to "Nexus," "the Company" ,"we," "us," and "our," refer to Nexus Enterprise Solutions, Inc., a Wyoming corporation.

 

Forward-Looking Statements

 

The following discussion contains forward-looking statements regarding us, our business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: our ability to successfully develop new products and services for new markets; the impact of competition on our revenues, changes in law or regulatory requirements that adversely affect or preclude clients from using us for certain applications; delays our introduction of new products or services; and our failure to keep pace with our competitors.

 

When used in this discussion, words such as "believes", "anticipates", "expects", "intends" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business.

 

 

PART I

 

Item 1. DESCRIPTION OF BUSINESS.

 

 

 

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Platform

 

 

 

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Item 1A.  RISK FACTORS

 

 

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Fiscal year ended December 31, 2015			High				Low
First Quarter		$	0.12			$	0.08
Second Quarter		$	0.25			$	0.25
Third Quarter		$	0.16			$	0.16
Fourth Quarter		$	0.14			$	0.14

			High				Low
First Quarter		$	0.203			$	0.123
Second Quarter		$	0.27			$	0.164
Third Quarter		$	0.20			$	0.08
Fourth Quarter		$	0.129			$	0.08

	●	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
	●	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended;
	●	contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;
	●	contains a toll-free telephone number for inquiries on disciplinary actions;
	●	defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
	●	contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;

 

 

 

 

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	●	the bid and offer quotations for the penny stock;
	●	the compensation of the broker-dealer and its salesperson in the transaction;
	●	the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
	●	monthly account statements showing the market value of each penny stock held in the customer's account.

 

ITEM 6. SELECTED FINANCIAL DATA

A smaller reporting company is not required to provide the information in this Item.

 

 

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

		Years Ended December 31,
Balance Sheet Data:		2015				2014
Cash		$	18,842			$	31,575
Total assets			467,592				602,782
Total liabilities			763,999				1,059,277
Shareholders' deficit			(296,407	)			(456,495	)
Operating Data:
Revenues			1,741,405				1,602,662
Cost of Revenues			1,007,897				1,059,548
Operating expenses			586,494				604,199
Net Income (loss)		$	116,369			$	(62,207	)

 

Results of Operations

 

 

 

 

 

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Operating expenses, which consisted solely of general and administrative expenses, research and development fees and consulting fees for the year ended December 31, 2014, were $604,199. This compares with operating expenses for the year ended December 31, 2013 of $989,022.  The major components of general and administrative expenses include accounting fees, legal and professional fees. Our operating expenses decreased during the year ended December 31, 2014 because we had a decrease in our consulting fees and no research and development costs.

As a result of the foregoing, we had a net loss of $62,207 for the year ended December 31, 2014. This compares with a net loss for the year ended December 31, 2013 of $189,259.

 

 

 

 

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To the Board of Directors and Shareholders of

Nexus Enterprise Solutions, Inc.

Lighthouse Point, Florida

We have audited the accompanying balance sheets of Nexus Enterprise Solutions, Inc. (the "Company"), as of December 31, 2015 and 2014, and the related statements of operations, stockholder's deficit, and cash flows for each of the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an 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 audits 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 audits provide 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 Nexus Enterprise Solutions, Inc. at December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that Nexus Enterprise Solutions, Inc. will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a working capital deficit and an accumulated deficit as of December 31, 2015, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

March 30, 2016

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

 

 

 

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

 

 

 

 

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Nexus Enterprise Solutions, Inc. (fka MutuaLoan, Corp.) (the "Company" and "MutuaLoan"), a corporation organized under the laws of the State of Wyoming, entered into a business combination with Nexus Enterprise Solutions, Inc. ("Nexus Florida"), a corporation organized under the laws of the State of Florida.  The business combination was effective on June 16, 2011 and was filed with the State of Wyoming on September 16, 2011.   The Company is the surviving entity for legal purposes and Nexus Florida is the surviving entity for accounting purposes. Nexus Florida was formed on June 6, 2011 to be a provider of customer leads to the insurance industry. There was no predecessor entity to Nexus Florida. The management of Nexus Florida became the management of the Company and the original owners of Nexus Florida retained control of the combined entity upon the business combination. Prior to the business combination the Company had no revenues and limited operations.

The business combination stipulated that the companies would undergo a business combination through a share exchange and the surviving entity for legal purposes would be MutuaLoan. Nexus Enterprise Solutions, Inc. was then dissolved into MutuaLoan, Corp. MutuaLoan, Corp. then changed its name to Nexus Enterprise Solutions, Inc. The transaction has been accounted for as a reverse merger recapitalization, whereby the accounting target/legal acquirer was MutuaLoan. The accounting acquirer/legal target was Nexus Florida. The shareholders of Nexus Florida received 9,000,000 common shares of the combined entity, and 100% of the equity voting interest of MutuaLoan; the shareholders of MutuaLoan Corp. retained their holdings on a 1:1 basis and the authorized number of shares in the surviving entity remained at 500,000,000 and the issued and outstanding shares were accordingly adjusted to 9,151,679, upon total issuance.

The financial statements as of December 31, 2015 and 2014 have been prepared in accordance with accounting principles generally accepted in the United States. The Company has elected a December 31, fiscal year end.

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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

For purposes of the financial statements, the Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.

The Company applies ASC 740, which requires the asset and liability method of accounting for income taxes.  The asset and liability method requires that the current or deferred tax consequences of all events recognized in the financial statements are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered. This interpretation also requires recognition and measurement of uncertain tax positions using a "more-likely-than-not" approach, requiring the recognition and measurement of uncertain tax positions. The adoption of ASC 740 had no material impact on the Company's financial statements.

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The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements. The Company computes net income (loss) per share in accordance with ASC 260. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.

Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company had no common stock equivalents outstanding as of December 31, 2015 and 2014.

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision.  Changes in assumptions can significantly affect estimated fair value. The carrying value of cash and cash equivalents and accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant market or credit risks arising from these financial instruments.

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Company's best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based upon historical write-off experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a regular basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company's allowance for doubtful accounts was $106,467 as of December 31, 2015, and December 31, 2014, respectively.  As of December 31, 2015, three customers represented approximately 59.04% (19.02%, 22.17% and 17.85%) of accounts receivable.  As of December 31, 2014, four customers represented approximately 70.03% (26.02%, 19.73%, 13.23% and 11.05%) of accounts receivable.

Property and equipment consists of furniture and fixtures and computer equipment. It is recorded at cost and depreciated over estimated useful lives ranging from three to five years on a straight-line basis. As of December 31, 2015 and 2014, the Company had property and equipment of $547 and $784, respectively, net of accumulated depreciation of $1,198 and $961, respectively. Expenditures for normal repairs and maintenance are charged to expense as incurred. Depreciation expense for the years ended December 31, 2015 and 2014 totaled $237 and $263, respectively.

In the event facts and circumstances indicate the carrying value of long-lived assets may be impaired, an evaluation of recoverability is performed by comparing the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount to determine if a write-down to market value or discounted cash flow is required. There was no impairment recorded during the years ended December 31, 2015 and 2014.

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Indefinite-lived intangible assets are not amortized. The useful lives of the intangible assets are reassessed each reporting period and the indefinite lives may be adjusted to determinable lives if the assessment determines circumstances have changed. The intangible assets are evaluated for impairment annually or when indicators of a potential impairment are present. There was no evidence of impairment of our indefinite-lived intangible assets as of December 31, 2015, or 2014.

The intangible asset as of December 31, 2015 consists of a license to use certain intellectual property in the Company's lead generation business into perpetuity. It was acquired through the issuance of 500,000 common shares in 2012 valued at $125,000 and through the issuance of a note payable for $150,000 in 2013.

The Company applies the provisions of ASC 605 which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements filed with the SEC. ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies.

In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. The Company earns a fee for providing referrals to insurance providers. The fee is recognized as revenues upon acceptance of the referral by the Company's customer.

Revenue is presented net of estimated returns. Returns comprised approximately 22% and 14% of total revenue during the years ended December 31, 2015, and 2014, respectively.

 

The Company had three major customers which generated approximately 62.71% (26.70%, 22.41% and 13.60%)  and 71.67% (37.13%, 16.64% and 17.90%) of its revenue in the fiscal years ended December 31, 2015 and 2014, respectively. The customer representing 13.60% of the total revenues of 2015 ceased operations during 2016.

The Company records as cost of sales the amounts paid to the providers of the insurance leads which it resells.

General and administrative expenses are comprised of the costs of operating the Company. These costs include professional fees, office expenses, telephone and travel.

Advertising costs are expensed as incurred. Advertising expenses totaled $0 for the years ended December 31, 2015, and 2014, respectively.

Research and development costs are expensed as incurred. Research and development costs totaled $9,018 and $0 for the years ended December 31, 2015, and 2014, respectively.

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Occasionally, the Company has funds deposited in a financial institution in excess of amounts insured by the FDIC. At December 31, 2015, and 2014, the Company had $0 on deposit in excess of currently insured amounts.

The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants and the closing price of the Company's common stock for common share issuances.

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern.  The Company has generated recurring net losses since inception and has a working capital deficit of $556,954 and an accumulated deficit of $1,857,684 as of December 31, 2015.  The Company currently has limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.  These factors raise substantial doubt about the Company's ability to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital, primarily from its shareholders, to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the private placement of its common stock. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

NOTE 3 – RELATED PARTY TRANSACTIONS

As of December 31, 2015, and 2014, the balance of accrued expenses to related parties, which consists of accrued interest or notes payable to related parties and accrued payroll, was $211,721 and $181,076, respectively. At December 31, 2015, and 2014, the accrued interest on the outstanding notes payable to related parties was $93,721 and $63,076, respectively. The outstanding balance of accrued payroll to officers was $118,000 as of December 31, 2015, and 2014.

The company pays monthly consulting fees to two stockholders. During the years ended December 31, 2015, and 2014, these fees aggregated $145,100 and $140,750, respectively.

 

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As of December 31, 2015, and 2014, the Company had outstanding notes payable to related parties of $127,485. These notes are unsecured bear interest between 0% and 6% and are due on demand.

NOTE 6 –STOCKHOLDERS' EQUITY

During the year ended December 31, 2013, the Company granted 300,000 common shares to a new Board member, Stanley Rapp. The shares vested on September 16, 2015. The fair value of the award was determined to be $78,000 and it was expensed over the vesting period. During the years ended December 31, 2015 and 2014, an aggregate of $27,674 and $39,000, respectively, was expensed under this award. As of December 31, 2015, nothing remains to be expensed over the remaining vesting period. The 300,000 shares were issued during January 2014.

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On June 4, 2014 the Company repurchased and cancelled an aggregate of 1,459,504 shares of common stock from investors for an aggregate amount of $356,874.

On June 13, 2014, the Company granted 50,000 common shares to a new Chief Technology Officer. The shares vest on April 13, 2015. The fair value of the award was determined to be $11,940 and it is being expensed over the vesting period. During the year ended December 31, 2015, and 2014, an aggregate of $4,045 and $7,895 was expensed under this award respectively. Nothing remains to be expensed as of December 31, 2015. On April 13, 2015, the 50,000 shares were issued.

On April 28, 2015, the Company granted 100,000 common shares to Scott Schluer (Chief Technology Officer) and 50,000 common shares to TMG Interactive for services. The shares were valued and expensed at $12,000 as of December 31, 2015.

 

NOTE 7 - INCOME TAXES   

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. The net deferred tax asset generated by the loss carry-forward has been fully reserved.

Deferred tax assets consist of the following as of December 31, 2015 and 2014:

	December 31,
	2015				2014
Net operating loss		$	257,894			$	307,585
Valuation allowance			(257,894	)			(307,585	)
Net deferred tax asset		$	-			$	-

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We did not have any disagreements on accounting and financial disclosures with our present accounting firm during the reporting period.

 

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's interim president and chief executive officer (who is the Company's principal executive officer) and the Company's chief financial officer, treasurer, and secretary (who is the Company's principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.  In designing and evaluating the Company's disclosure controls and procedures, the Company's management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company's management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  The ineffectiveness of the Company's disclosure controls and procedures was due to material weaknesses identified in the Company's internal control over financial reporting, described below.

Management's Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over the Company's financial reporting.  In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.  Our management, with the participation of the Company's principal executive officer and principal financial officer has conducted an assessment, including testing, using the criteria in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") (2013).  Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.  Based on this evaluation, the Company's management concluded its internal control over financial reporting was not effective as of December 31, 2015.  The ineffectiveness of the Company's internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small staff:

We are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the next fiscal year, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.

Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

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Set forth below are the names of the directors and officers of the Company, all positions and offices with the Company held, the period during which they has served as such, and the business experience during at least the last five years:

 

 

The above listed officers and directors are not involved, and have not been involved in the past five years, in any legal proceedings that are material to an evaluation of their ability or integrity.

Gunnar Counselman has been a Director of the Company since September 19, 2013.  Gunnar Counselman is Founder and CEO of Fidelis Education, an enterprise technology Platform as a Service (PaaS) company for education.  Counselman earned a Bachelors degree in Economics from Cornell, an MBA from Harvard Business School, and served as a Human Source Intelligence Officer in the Marine Corps, deploying to Iraq, Bosnia, the Horn of Africa and Central America. After business school, Gunnar consulted to a variety of media, private equity, and technology companies at Bain and Company before leaving Bain to consult independently to education companies, colleges, and private equity clients while building the resources necessary to launch Fidelis. He's also a board member at the Marine Memorial Club and Hotel in San Francisco.

 

Committees of the Board of Directors

There are no committees of the Board of Directors.

Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in its Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years. We have nothing to report in this regard.

 

Our board of directors has not adopted a code of ethics but plans to do so in the future.

Options/SAR Grants and Fiscal Year End Option Exercises and Values

We have not had a stock option plan or other similar incentive compensation plan for officers, directors and employees, and no stock options, other than as is discussed in this Annual Report. 

Jason Foster, the Company's former officer, received a salary of $149,580 per year during 2013 and 2014.  The first year in which he received this salary was 2013.  Jason Foster resigned as an officer of the company on August 21, 2014.

James Bayardelle, the Company's President, CEO and director receives an annual salary of $83,832.01.  James Bayardelle also received 500,000 shares of common stock as part of his annual compensation.  The first year in which he received this salary was 2013.

None of the other directors of the Company receive any salary.

On August 21, 2014, Stanley Rapp and Jason Foster resigned from their officer and director positions with the Company.

On April 28, 2015, the Company granted 100,000 common shares to Scott Schluer for services rendered as Chief Technology Officer.

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.

 

 

 

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As of December 31, 2015, and 2014, the balance of accrued expenses to related parties, which consists of accrued interest or notes payable to related parties and accrued payroll, was $211,721 and $181,076, respectively. At December 31, 2015, and 2014, the accrued interest on the outstanding notes payable to related parties was $93,721 and $63,076, respectively. The outstanding balance of accrued payroll to officers was $118,000 as of December 31, 2015, and 2014.

 

 

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The Company pays monthly consulting fees to two stockholders. During the years ended December 31, 2015, and 2014, these fees aggregated $145,100 and $140,750, respectively.

As of December 31, 2015, and 2014, the Company had outstanding notes payable to related parties of $127,485. These notes are unsecured bear interest between 0% and 6% and are due on demand.

During the year ended December 31, 2013, the Company granted 300,000 common shares to a new Board member, Stanley Rapp. The shares vest on September 16, 2015. The fair value of the award was determined to be $78,000 and it is being expensed over the vesting period. During the years ended December 31, 2014 and 2013, an aggregate of $39,000 and $11,326, respectively, was expensed under this award. As of December 31, 2014, $27,674 remains to be expensed over the remaining vesting period. The remaining was expensed during the year ended December 31, 2015. The 300,000 shares were issued during January 2014.

On June 4, 2014 the Company repurchased and cancelled an aggregate of 1,459,504 shares of common stock from investors for an aggregate amount of $356,874.

On August 21, 2014, Stanley Rapp and Jason Foster resigned from their officer and director positions with the Company.

On June 13, 2014, the Company granted 50,000 common shares to Scot Schluer, Chief Technology Officer. The shares vested on April 13, 2015. The fair value of the award was determined to be $11,940 and it is being expensed over the vesting period. During the year ended December 31, 2015, and 2014, an aggregate of $4,045 and $7,895 was expensed under this award respectively. Nothing remains to be expensed as of December 31, 2015. On April 13, 2015, the 50,000 shares were issued.

On April 28, 2015, the Company granted 100,000 common shares to Scott Schluer (Chief Technology Officer) and 50,000 common shares to TMG Interactive for services. The shares were valued and expensed at $12,000 as of December 31, 2015.

There are not currently any conflicts of interest by or among its current officers, directors, key employees or advisors. The Company has not yet formulated a policy for handling conflicts of interest; however, it intends to do so upon completion of this offering and, in any event, prior to hiring any additional employees.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our independent auditor, MaloneBailey, LLP, Certified Public Accountants billed an aggregate of $20,500 for the year ended December 31, 2015 and for professional services rendered for the audit of the Company's annual financial statements and review of the financial statements included in our quarterly reports. MaloneBailey, LLP, Certified Public Accountants, billed an aggregate of $25,000 for the year ended December 31, 2014 and for professional services rendered for the audit of the Company's annual financial statements and review of the financial statements included in our quarterly reports.

We do not have an audit committee and as a result our board of directors performs the duties of an audit committee. Our board of directors evaluates the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.

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