Quality Industrial Corp 10-Q for FY2022 Q1
Quality Industrial Corp. (QIND)
About this 10-Q
Quality Industrial Corp filed this 10-Q on May 13, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).
Headline figures
Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $169.99K
- compared with a net loss of $189.8K a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended
| Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to__________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X]
Indicate by check mark whether the registrant has
submitted electronically 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]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
| ☐ Large accelerated filer | ☐ Accelerated filer |
| ☒
|
|
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]
Securities registered pursuant to Section 12(b) of the Act: None
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: common shares as of May 6th, 2022
TABLE OF CONTENTS
| Page | ||
| PART I – FINANCIAL INFORMATION | ||
| Item 1: | Financial Statements | 3 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 7 |
| Item 4: | Controls and Procedures | 8 |
| PART II – OTHER INFORMATION | ||
| Item 1: | Legal Proceedings | 9 |
| Item 1A: | Risk Factors | 9 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3: | Defaults Upon Senior Securities | 9 |
| Item 4: | Mine Safety Disclosures | 9 |
| Item 5: | Other Information | 9 |
| Item 6: | Exhibits | 10 |
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows:
| F-1 | Balance Sheets as of March 31, 2022 (unaudited) and December 30, 2021 (audited); | |
| F-2 | Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited); | |
| F-3 | Statement of Stockholders’ Equity (Deficit) for the periods ended March 31, 2022 and 2021 (unaudited); | |
| F-4 | Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited); and | |
| F-5 | Notes to Financial Statements. |
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2022 are not necessarily indicative of the results that can be expected for the full year.
| 3 |
WIKISOFT CORP.
CONSOLIDATED BALANCE SHEETS
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Other assets | ||||||||
| Prepaid expenses - long term | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Line of credit - related party | ||||||||
| Related party advances | ||||||||
| Loans payable - related party | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders' deficit | ||||||||
| Preferred stock; par value; shares authorized; and shares issued and outstanding as of as of March 31, 2022 and December 31, 2021, respectively | ||||||||
| Common stock; par value; shares authorized; and shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Stock payable | ||||||||
| Stock Receivable | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders' deficit | $ | $ | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-1 |
WIKISOFT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | ||||||||
| March 31, 2022 | March 31, 2021 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Professional fees | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other expense | ||||||||
| Gain on forgiveness of accrued salary | ||||||||
| Loss on foreign currency translation | ( | ) | ||||||
| Loss on license agreement | ( | ) | ||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding | ||||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-2 |
WIKISOFT CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| For the Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Additional Paid-in Capital | Stock Payable | Stock Receivable | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | $ | $ | ( | ) | $ | (369,007 | ) | |||||||||||||||||||||||||
| Common stock issued for cash | ( | ) | 57,824 | |||||||||||||||||||||||||||||||||
| Common stock issued for license agreement | 104,550 | |||||||||||||||||||||||||||||||||||
| Imputed interest | 745 | |||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | (169,990 | ) | ||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | ( | ) | ( | ) | (375,878 | ) | |||||||||||||||||||||||||||||
| For the Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Additional Paid-in Capital | Stock Payable | Stock Receivable | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2020 | $ | $ | $ | $ | $ | $ | ( | ) | $ | (23,041 | ) | |||||||||||||||||||||||||
| Shares issued for services | 68,750 | |||||||||||||||||||||||||||||||||||
| Redemption of common stock for cash | ( | ) | ( | ) | (1 | ) | ||||||||||||||||||||||||||||||
| Imputed interest | 745 | |||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | (189,797 | ) | ||||||||||||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | $ | $ | $ | ( | ) | $ | (143,344 | ) | |||||||||||||||||||||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-3 |
WIKISOFT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Three Months Ended | ||||||||
| March 31, 2022 | March 31, 2021 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Common stock issued for license agreement | ||||||||
| Imputed interest | ||||||||
| Changes in assets and liabilities | ||||||||
| Decrease (increase) in prepaid assets | ( | ) | ||||||
| Decrease in accounts payable | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from investing | ||||||||
| Net cash used in investing activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Payment of Loans payable - related party | ( | ) | ||||||
| Proceeds from related party advances | ||||||||
| Payment of related party advances | ( | ) | ||||||
| Stock redemption for cash | ( | ) | ||||||
| Related party line of credit | ||||||||
| Proceeds from sale of common stock | ||||||||
| Net cash from financing activities | ||||||||
| Net increase (decrease) in Cash | ( | ) | ( | ) | ||||
| Beginning cash balance | ||||||||
| Ending cash balance | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for tax | $ | $ | ||||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Shares issued for prepaid services | $ | $ | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
| F-4 |
WIKISOFT CORP.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF BUSINESS
Organization
WikiSoft Corp. (“we”, “our”, the "Company") was incorporated in the state of Nevada in May 1998 as Sensor Technologies Inc.
Nature of operations
The Company is a wiki portal for businesses. Built on MediaWiki software, the new portal, called wikiprofile.com, is expected to eventually be the largest in the wiki platform with over 328 million published articles and profiles on companies, top brands, and corporate influencers. Users will be able to freely search the portal and all content will eventually be collected, updated and fact-checked in real-time. The Company will generate revenue through paid advertisement placements imbedded in the webpages associated with wikiprofile.com.
2. SUMMARY OF SIGNIFICANT POLICIES
Basis of Presentation and Principles of consolidation
The accompanying consolidated financial statements represent the results of operations, financial position and cash flows of the Company prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. – On March 31, 2019, the Company, a Nevada corporation, entered into an Agreement and Plan of Merger with WikiSoft DE, a Delaware corporation, and WikiSoft Acquisition, Inc., a Delaware corporation. WikiSoft Acquisition, Inc. merged with and into WikiSoft DE (the “Merger”) on April 30, 2019, with the filing of Articles of Merger with the Delaware Secretary of State. All significant inter-company transactions and balances have been eliminated.
Use of estimates
The preparation of consolidated 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, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s, impairments and estimations of long-lived assets, revenue recognition of Contract based revenue, allowances for uncollectible accounts, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Fair value of financial instruments
The carrying value of cash, accounts payable and accrued expenses, and debt approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.
| F-5 |
| • | Level 1 - |
Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.
|
| • | Level 2 - |
Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily-available pricing sources for comparable instruments.
|
| • | Level 3 - | Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. |
Revenue Recognition
The Company recognizes revenue in accordance with ASC Topic 606. The accounting policy on revenue recognition is provided below.
Service Contracts
The company recognizes service contract revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. Service contracts are generally accounted for as a single unit of account (a single performance obligation) and are not segmented between types of services. The company recognizes revenue based primarily on contract cost incurred to date compared to total estimated contract cost (an input method). The input method is the most faithful depiction of the company’s performance because it directly measures the value of the services transferred to the customer. Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the client. Project mobilization costs are generally charged to project costs as incurred when they are an integrated part of the performance obligation being transferred to the client. Customer payments on service contracts are typically due in advance, depending on the contract.
For service contracts in which the company has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the company’s performance completed to date, revenue is recognized when services are performed and contractually billable. Service contracts that include multiple performance obligations are segmented between types of services. For contracts with multiple performance obligations, the company allocates the transaction price to each performance obligation using an estimate of the stand-alone selling price of each distinct service in the contract. Revenue recognized on service contracts that have not been billed to clients is classified as a current asset under contract assets on the Consolidated Balance Sheet. Amounts billed to clients in excess of revenue recognized on service contracts to date are classified as a current liability under contract liabilities. Customer payments on service contracts are typically due within 30 days of billing, depending on the contract.
Cash and cash equivalents
For purposes of the statements of cash flows, the
Company considers all highly liquid investments and short-term debt instruments with original maturities of six months or less to be cash
equivalents. There was $
The Company follows the guidelines in FASB Codification Topic ASC 718-10 “Compensation-Stock Compensation,” which requires companies to measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. The Company accounts for non-employee share-based awards in accordance with FASB ASC 505-50 under which the awards 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 are recognized as expense over the service period.
| F-6 |
The Company reports earnings (loss) per share in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 “Earnings Per Share,” which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.
Long-lived Assets
In accordance with the Financial Accounting Standards Board ("FASB") Accounts Standard Codification (ASC) ASC 360-10, "Property, Plant and Equipment," the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
Income taxes
The Company accounts for its income taxes in accordance with FASB Codification Topic ASC 740-10, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. 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 income in the period that includes the enactment date.
Recently issued accounting pronouncements
The Company has evaluated all other recent accounting pronouncements and believes that none of them are expected to have a material effect on the Company's financial position, results of operations or cash flows.
3. GOING CONCERN
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
Management
evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated
financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going
concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and
raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company
to finance its operations internally. As of March 31, 2022, the Company had $
Over the next twelve months management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.
4. PURCHASE OF MEMBERSHIP INTEREST IN ETHERALABS LLC
On February 28, 2022, the Company entered into a definitive
agreement to acquire
| F-7 |
5. RELATED PARTY TRANSACTIONS
Related party advances
As of March
31, 2022 and December 31, 2021, the Company had amounts due to Fastbase Inc, a Company commonly controlled by a former board
member of the Company, of $
Loans payable - related party
On June 1, 2020 the company entered into a loan agreement
with Fastbase Inc, a company controlled by a prior board member of the Company, in the amount of $
On September 1, 2020 the company entered into a loan
agreement with Fastbase Inc, a company controlled by a prior board member of the Company, in the amount of $
On October 24, 2020 the company entered into a loan
agreement with Fastbase Inc, a company controlled by a prior board member of the Company, in the amount of $
On December 3, 2020 the company entered into a
loan agreement with Fastbase Inc, a company controlled by a prior board member of the Company, in the amount of $
As of March
31, 2022 and December 31, 2021, the Company had loans due to related parties of $
Line of credit – related party
On December 30, 2020 the company entered into a $
6. STOCKHOLDERS’ EQUITY
The Company’s authorized capital stock consists of shares of common stock and shares of preferred stock, par value per share. As of March 31, 2022 and December 31, 2021, there were and shares of common stock issued and outstanding, respectively.
As of March 31, 2022 and December 31, 2021, there were and shares of preferred stock of the Company issued and outstanding, respectively.
Common Stock issuances during the three months ending March 31, 2022
On January 3, 2022, the Company issued shares
of common stock for $
On January 10, 2022, the Company issued shares
of common stock for $
On March 10, 2022, the Company issued shares
of common stock for $
On March 21, 2022, the Company issued shares
of common stock for $
On March 29, 2022, the Company issued shares
of common stock for $
On February 28 2022 the company entered into a definitive
agreement to acquire
7. SUBSEQUENT EVENTS
In accordance with ASC 855-10, we have analyzed our operations subsequent to March 31, 2022 through the date these financial statements were issued and have determined that we do not have any material subsequent events to disclose or recognize in these financial statements.
| F-8 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Business Overview
Wikisoft Corp. has a vision to become one of the largest big data providers of information for businesses. Our portal, which initially launched in January 2018, is called wikiprofile.com and seeks to provide information on companies, business people and investors.
Our website portal is currently operational and was relaunched in its beta form on June 1, 2021. At this time, we are focused on applying product improvements from beta-user feedback, establishing a maintenance and support cadence, and developing new features and functionalities. Product design and strategy decisions rest with our European team and are actioned by our software developers based in India.
In Q1 2022 we commenced development on a new platform named Wikifunding, a website aimed to accelerate matching startups with investors. With the February 28, 2022 acquisition of a majority interest in Etheralabs LLC, a New York City based venture lab and ecosystem that invests in, builds, and deploys disruptive technologies across the Blockchain space, Wikisoft´s vision is to combine the company’s massive amount of data on startups, funds and investors with Etheralabs’ disruptive Blockchain technology to accelerate finance partnerships between startups and investors.
Since June 1, 2021, testing of the beta site and a stabilization period has commenced. New features and improvements have been implemented, which include but are not limited to: Company reviews, improved sign-up process with an automatic look-up to make it easy to join the platform free of charge and advanced filtering options and search algorithms to give more relevant results. Since relaunch of the site, we have had continuous growth of business profiles and the total number of profiles exceeds 175 million. The number includes claimed and unclaimed company and people profiles. We expect to test, refine and roll out commercial products including Lead generation and Newswire in the FY 2022.
We expect that IT development will continue to utilize existing development capability. Additional developers may be hired if required for enhancements in crawling and frontend development of business logic and new commercial products. We also expect to commence marketing activities seeking to generate additional users and sign ups to our website platform. The main drivers will be email, search engine marketing and Search Engine Optimization.
We plan to generate revenues primarily from subscription on premium profiles on our websites. We also further plan to generate revenues by charging for access to certain information and premium features on our platform such as press wires and lead generation on prospects whether it is investors, suppliers, employees or future partners.
| 4 |
Our offices are located at 315 Montgomery Street, San Francisco, CA 94104, and our telephone number is 800-706-0806. Our website addresses are wikiprofile.com, wikifunding.com and wikisoft.com and our email address is investor@wikisoft.com. We also currently have websites at the following website addresses: wikicareer.com, wikiinvestor.org, wikihired.com, wikiinvestment.com, which redirect the user to our investor site wikisoft.com or our flagship website wikiprofile.com or upcoming platform wikifunding.com. Information contained on, or accessible through, all of the foregoing websites is not a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.
Plan of Operations
For the 2022 fiscal year, we expect to require a minimum of $500,000 in operating funds. The source of such funds is anticipated to be from capital raised from third parties. The founder Rasmus Refer, pursuant to a Revolving Credit Facility Agreement (the “Credit Agreement”) between him and the Company, dated December 30, 2020, has agreed to make unsecured loans and extensions of credit available to the Company of up to $1,000,000, as requested by the Company under the Credit Agreement, to implement the Company’s plan of operations if we are unable to raise sufficient funds from other sources.
If we are able to raise funds from third parties exceeding $500,000, we plan to accelerate our plan of operations as much as possible consistent with the amount of funds raised and the Company’s strategy. We would need approximately $3,000,000 representing the optimal level of funds to maximize our platform development efforts and provide the best opportunity to accelerate growth and roll out globally our business plan.
First half of 2022
Acquisition of Etheralabs LLC
On February 28, 2022, the company entered into a definitive agreement to acquire 51% of Etheralabs LLC a New York City based venture lab and ecosystem that invests in, builds, and deploys disruptive technologies across the Blockchain space and The transaction includes a global access to Etheralabs´ full stack of technologies across the Blockchain and global funding landscape. Etheralabs ecosystem allows development and finance partnerships throughout the blockchain world and beyond, and connects the blockchain community, investors and venture capital to relevant data intelligence and direct investment opportunities. Wikisoft intends to ensure that Etheralabs future product and technology roadmap supports wikiprofile.com and the upcoming Wikifunding platform aiming to accelerate matching investors to startups.
In the first half of 2022, we plan to further develop Wikiprofile.com and launch organization hierarchy to company profiles so users can see employees working in the company to complement our planned lead generation product. Furthermore, we anticipate implementing payment gateway to test the first commercial products for lead generation and presswire service. We expect to launch wikifunding.com in Q2 2021 and make backend integrations with Etheralabs´ services to utilize synergies from the acquisition. Our vision is to combine the company's massive amount of data on start-ups, funds and investors with Etheralabs' disruptive Blockchain technology to accelerate finance partnerships between startups and investors - Wikisoft providing the relevant data intelligence and direct investment opportunities and Etheralabs providing the Blockchain expertise and technology on contract execution.
We expect that the total cost for the foregoing activities will be an estimated amount of $200,000.
Second Half of 2022
In the second half of 2022, we plan to further develop Wikiprofile.com and Wikifunding. The main focus will be backend integrations with Etheralabs´ services to utilize synergies, data collection and refining our commercial products for premium profiles, lead generation and press wire service. We anticipate hiring a customer service manager to ensure optimization of products and to ensure customer satisfaction and get customer feedback to optimize commercial packages. We expect that the total cost for the foregoing activities will be an estimated amount of $300,000.
If we are able to raise funds from third parties exceeding $500,000, we plan to accelerate our plan of operations as much as possible consistent with the amount of funds raised and the Company’s strategy.
Achievement of the foregoing plan of operations will depend highly on our funds and the availability of those funds and accordingly there can be no assurance that we can implement the foregoing as planned or at all.
| 5 |
Results of Operation for the Three Months Ended March 31, 2022 and 2021
Revenues
We earned no revenues for the three months ended March 31, 2022 or 2021. We hope to generate revenues in the remainder 2022, but we will need financing to maximize our earning potential.
Operating Expenses
Operating expenses increased from $188,695 for the three months ended March 31, 2021 to $218,803 for the three months ended March 31, 2022. The main reason for the increase in operating expenses for the 2022 period was considerably more spent on professional fees over the same period in 2021, offset by less spent on general and administrative costs. We issued stock for services in the amount of $179,668, and that resulted in the bulk of the increased operating expenses.
We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to administrative and operating costs associated with our business activities and the professional fees associated with our reporting obligations.
Other Income/Expenses
We recorded other income of $14,438 for the three months ended March 31, 2022, compared with other expenses of $1,102 for the three and three months ended March 31, 2021. Our other income for 2022 was the result of a $120,000 gain on forgiveness of accrued salary, offset mainly by a $104,550 loss on a license agreement. Our other expense for 2021 was largely a result of interest expense.
Net Loss
We incurred a net loss of $204,365 for the three months ended March 31, 2022, compared to a net loss of $189,797 for the quarter ended March 31, 2021.
Liquidity and Capital Resources
As of March 31, 2022, we had total current assets of $16,180 and total current liabilities of $392,058. We had a working capital deficit of $375,878 as of March 31, 2022. This compares with a working capital deficit of $579,300 as of December 31, 2021.
Net cash used in operating activities was $54,183 for the three months ended March 31, 2022, as compared with $127,915 used in cash for
the same period ended 2021. Our net losses were the main contributing factors to our negative operating cash flows for both periods.
Financing activities provided $52,824 in cash for the three months ended March 31, 2022, as compared with $119,999 in cash provided for the same period ended 2021. The majority of cash provided in 2022 was from proceeds from the sale of common stock. The majority of cash provided in 2021 was proceeds from the Credit Agreement with Rasmus Refer.
Going Concern
We have evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of March 31, 2022, the Company had $14,300 cash on hand. At March 31, 2022 the Company has an accumulated deficit of $12,967,403. For the three months ended March 31, 2022, the Company had a net loss of $204,365, and net cash used in operations of $54,183. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing.
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Over the next twelve months management plans to use borrowings and security sales to mitigate the effects of cash flow deficits; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.
Future Financings.
Because of our limited operating history, it is difficult to predict our capital needs on a monthly, quarterly or annual basis. We will have no capital available to us if we are unable to raise money or find alternate forms of financing, which we do not have in place at this time other than the “Credit Agreement” with Rasmus Refer. Pursuant to the Credit Agreement dated December 30, 2020, Mr. Refer has agreed to make unsecured loans and extensions of credit available to the Company of up to $1,000,000, as requested by the Company under the Credit Agreement, to implement the Company’s plan of operations if we are unable to raise sufficient funds from other sources. The funds extended to the Company under the Credit Agreement will have a maturity date of 24 months and will carry interest at 0.01% per annum. The Company may prepay the funds at any time without penalty. To date $300,000 has been provided to the Company under the Credit Agreement.
There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all. If we are unable to raise this money, our growth plans will be frustrated. There can be no assurance that our attempts to raise funds will be successful. You may lose your entire investment.
Critical Accounting Policies.
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed Note 2 of our unaudited financial statements included in this Quarterly Report on Form 10-Q.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
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Item 4. Controls and Procedures
Disclosure Controls and Procedures
We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2022, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2022, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.
Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude that, as of March 31, 2022, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:
| 1. | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending March 31, 2022. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. | |
| 2. | We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. | |
| 3. | Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. |
To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.
We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.
Changes in Internal Control over Financial Reporting
No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended March 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
See risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 4, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.
On January 3, 2022, the Company issued 500,000 shares of common stock for $20,523 cash.
On January 10, 2022, the Company issued 500,000 shares of common stock for $15,975 cash.
On March 10, 2022, the Company issued 500,000 shares of common stock for $7,688 cash.
On March 21, 2022, the Company issued 750,000 shares of common stock for $13,638 cash.
On March 29, 2022, the Company issued 750,000 shares of common stock for $11,725 cash. As of March 31, 2022 the cash had not been received and was recorded as stock receivable.
On February 28 2022 the company entered into a definitive agreement to acquire 51% of Etheralabs LLC for 2,550,000 of the Company’s common stock valued at $104,550.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
None
Item 5. Other Information
As previously reported, on September 1, 2020, the Company entered into an employment agreement (the “Employment Agreement”) with Carsten Falk in his capacity as the Company’s Chief Executive Officer. Pursuant to the Agreement, Mr. Falk was to receive $15,000 per month to be paid on the last day of each month. Mr. Falk chose not to take all of these payments and has waived his right to receive the outstanding amounts for the fiscal year 2021 of $120,000 and in Q1 2022 of $30,000 amounting to a total of $150,000.
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Item 6. Exhibits
| Exhibit Number | Description of Exhibit | |
| 31.1** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101** | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 formatted in Extensible Business Reporting Language (XBRL). | |
| **Provided herewith |
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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.
| Wikisoft Corp. | ||
| Date: | May 13, 2022 | |
| By: | /s/ Carsten Falk | |
| Carsten Falk | ||
| Title: | Chief Executive Officer (principal executive, accounting, and financial officer) | |
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EXHIBIT 31.1
CERTIFICATIONS
I, Carsten Kjems Falk, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022 of Wikisoft Corp.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: | |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; | |
| c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and; | |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions); | |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls. | |
| Dated: May 13, 2022 | /s/ Carsten Kjems Falk | ||
| Carsten Kjems Falk | |||
| Chief Executive Officer | |||
|
(principal executive officer, principal financial and accounting officer) |
| CERTIFICATIONS |
I, Carsten Kjems Falk, certify that;
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of Wikisoft Corp. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2022
/s/ Carsten Kjems Falk
By: Carsten Kjems Falk
Title: Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Wikisoft Corp. (the “Company”) for the fiscal quarter ended March 31, 2022 as filed with the Securities and Exchange Commission (the “Report”), I, Carsten Kjems Falk, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: May 13, 2022 | /s/ Carsten Kjems Falk | ||
| Carsten Kjems Falk | |||
| Chief Executive Officer | |||
|
(principal executive officer, principal financial and accounting officer) |
This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.