Rivulet Entertainment, Inc 10-K, filed Mar 27, 2024
Rivulet Entertainment, Inc. (RIVF)
About this 10-K
Rivulet Entertainment, Inc filed this 10-K on March 27, 2024, covering the fiscal year ended December 31, 2023.
Headline figures
Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $0 a year earlier
- Net loss
- $310.88K
- compared with a net loss of $48.59K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to _________
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to section 12(g) of the Act
Common Stock $0.001 Par Value (NONE)
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: o Yes x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes 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. . x
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). . x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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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 has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
The aggregate market value of the outstanding common equity held by non-affiliates of the Registrant as of the last business day of the Registrant’s most recent completed second fiscal quarter was approximately $
As of March 21, 2024, a total of
Advanced Voice Recognition Systems, Inc.
Table of Contents
PART I | |||
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Item 4. |
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PART II | |||
Item 5 |
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Item 6 |
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Item 7 |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
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Item 9 |
| Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | |
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PART III | |||
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Item 11 |
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Item 12 |
| Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
Item 13 |
| Certain Relationships and Related Transactions, and Director Independence | |
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PART IV | |||
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EX 31.1 |
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EX 31.2 |
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EX 32.1 |
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Cautionary Statement Regarding Forward Looking Statements
The statements contained in this prospectus that are not historical are “forward-looking statements”, which can be identified by use of terms such as “may”, “could”, “should”, “expect”, “plan”, “project”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “pursue”, “target” or “continue”, the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.
The forward-looking statements contained in this Annual Report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this Annual Report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to various factors listed in this Annual Report. All forward-looking statements speak only as of the date of this Annual Report. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
PART I
Item 1. Business
General Overview
Advanced Voice Recognition Systems, Inc. (the “Company”, “we” or “us”), is a software development company headquartered in Scottsdale, Arizona. We specialize in creating interface and application solutions for speech recognition technologies. Our speech recognition software and related firmware was first introduced in 1994 at an industry trade show. We currently have limited capital resources. We are not currently engaged in marketing any products. We are currently engaged in discussions with a certain firm dedicated to assisting in the commercialization of intellectual assets.
Our principal assets are our patents. We currently hold six issued patents. U.S. Patent #7,558,730 (“the ‘730”) entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” discloses a system for facilitating speech recognition and transcription among users employing incompatible protocols for generating, transcribing and exchanging speech. U.S. Patent #7,949,534, (“the ‘534”) entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” is an expansion of the coverage of the ‘730 patent and incorporates speech recognition and transcription among transcription engines employing incompatible protocols. U.S. Patent#8,131,557, (“the 557”) entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” is an expansion of the coverage of AVRS’s ‘730 and the ‘534 patents and incorporates speech recognition and transcription among transcription engines employing incompatible protocols for generating, transcribing, and exchanging speech among users employing incompatible protocols utilizing peer-to-peer networks, node-to-node networks, and the cloud. U.S. Patent #8,498,871, (“the ‘871”) entitled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” is a system for facilitating free form dictation, including directed dictation and constrained recognition and /or structured transcription among users having heterogeneous protocols for generating, transcribing and exchanging recognized and transcribed speech. U.S. Patent #9,142,217, (“the 217”) entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” is an expansion of the coverage of the ‘871. U.S. Patent #9,934,786 (“the ‘786”) was issued April 3, 2018, and is an extension of the coverage in the ‘871 patent. Our business strategy is to attempt to interest other companies in entering into license agreements or other strategic relationships and to enforce and defend our patents through infringement and interference proceedings, as appropriate.
Industry Overview
We believe that speech recognition technology has a multitude of potential applications including but not limited to dictation and transcription, mobile messaging (voice to texting), server-based web search, customer relations and translation.
Speech recognition technology, which provides for the conversion of speech into written text, is the threshold feature of our solutions. Our technology focuses on improving speech recognition technology by increasing speech conversion precision, with the goal of achieving near 100% accuracy and allowing the user to speak naturally. We also focus on improving user productivity and profitability by enabling the user to effectively utilize the written text produced by speech recognition technology (the End-Text) in multiple applications specific to the user’s business purposes and goals.
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Principal Proposed Products or Services
We have not achieved any revenues from product sales. In addition, we will need substantial additional capital to achieve our marketing objectives as described below.
Speech Recognition Software and Related Firmware
Our principal proposed product is speech recognition software and related firmware which allows for dictation into a broad range of applications, including DOS applications running in Windows, UNIX and mainframe applications accessed through terminal emulation programs, various custom applications, and all Windows 3.x, 95, 98, 2000, XP, Vista, Windows 7 and Windows 10 programs. Through this product, we seek to provide full functionality including audio proofreading, deferred and delegated correction and additional capabilities that we believe are not available with other products. This product is designed to allow for deferred dictation, where the text is saved with the associated audio, and the users can resume when stopped and can play back dictated content. Similarly, the recognized text and associated audio can be saved to be used when text is corrected.
AVRS Enterprise Solutions
AVRS patented technology is applicable to many mainstream speech enabled applications ranging from traditional desktop applications to mobile, web-based and cloud solutions. The technology reaches beyond simple speech recognition and transcription into many other applications thus enabling the exchange of spoken text transcription amongst numerous users on diverse system platforms, as well as enabling the transcribed text to be utilized by many interface applications. The key is the recognition of, and in many cases the transcription of, spoken text in a myriad of applications to allow a seamless interface among users and /or systems having disparate protocols. Recognition of dictated speech including spoken text and commands, over many platforms provides operations of systems having diverse requirements and capabilities.
AVRS patents cover both a method of implementation and a system whereby speech recognition and transcription can be operated upon and exchanged amongst users employing disparate legacy protocols through one or more transaction managers having a systems protocol. An underlying key factor in all AVRS patented technology lies in its enabling capability whereby any legacy application protocol can be made compatible with speech recognition and transcription engines with or without modification of the application or the protocol upon which the initiating or the receiving application relies.
Market
We believe that our patented technology has applications in vertical markets that require individuals and organizations to create reports, letters, e-mail, data entry, manuals, books, and virtually any other document or end product involving written data. These organizations include corporations, hospitals, medical product and service providers, governmental entities, legal professionals, sales and service organizations law enforcement agencies and mobile search and voicemail to text.
Original Equipment Manufacturer (OEM)
We believe that our patented technology has applications in OEM markets, targeting both software developers and hardware manufacturers. When we have sufficient available resources, we may approach the larger OEM companies with a joint marketing approach strategy while using a direct sale basis to approach small and medium-sized OEMs.
Hardware Manufacturers
We believe that our patented technology has applications in hardware manufacturing, and to that end, when we have sufficient available resources, we may approach hardware manufacturers both on a direct basis and through joint sales and marketing programs. We anticipate that we will offer technology and patent licenses to manufacturers of medical devices, digital dictation systems, recorders, workstation PCs, mobile phones, PDAs, WAPs and intelligent electronics. Alternatively, we may offer these manufacturers limited versions of our speech recognition software and related firmware product line for embedding into hardware. When we have sufficient available resources, we expect to develop joint sales and marketing programs for mainframe, thin-client, telephony and other large hardware processing systems.
Intellectual Property
Our primary assets are U.S. Patent #7,558,730, U.S. Patent #7,949,534, U.S. Patent #8,131,557, U.S. Patent #8,498,871, U.S. Patent#9,142,217 and U.S. Patent 9,934,786.
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U.S. Patent #7,558,730, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols”, was issued by the U.S. Patent and Trademark Office on July 7, 2009. In accordance with 35 USC 154, the term for the above referenced patent began on July 7,2009 and ends 20 years from the date on which the application for the patent was filed in the United States. Therefore, the patent will expired on November 27, 2021. The invention discloses a system for facilitating speech recognition and transcription among users employing incompatible protocols for generating, transcribing, and exchanging speech. We expect this patent to strengthen our position in voice recognition. Costs totaling $58,277 were capitalized during the third quarter of 2009 and the Company began amortization.
On May 24, 2011, U.S. Patent # 7,949,534, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols, “was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning May 24,2011 and ending 20 years from the application date of the parent application (US Patent #7,558,730) of November 27, 2001, or November 27,2021. Costs totaling $3,365 were capitalized during the second quarter of 2011 and the Company began amortization.
On March 6, 2012, U.S. Patent #8,131,557, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning March 6,2012 and ending 20 years from the application date of the parent application (US Patent #7,558,730) of November 27, 2021, or November 27,2021. Costs totaling $5,092 were capitalized during the first quarter of 2012 and the Company began amortization.
On July 30, 2013, U.S. Patent #8,498,871, entitled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 30, 2013 and ending 20 years from the application date of November 27, 2001, or November 27, 2021. Costs totaling $21,114 were capitalized during the third quarter of 2013 and the Company began amortization.
On September 22, 2015, U.S. Patent #9,142,217, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning September 22, 2015 and ending 20 years from the application date of the parent application (U.S. Patent No 7,558,730) of November 27,2001, or November 27, 2021. Costs totaling $35,068 were capitalized during the third quarter of 2015 and the Company began amortization.
On April 3, 2018, U.S. Patent #9,934,786, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols, “was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning April 3,2018 and ending 20 years from the application date of the parent application (U.S. Patent No 7,558,730) of November 27, 2001, or November27, 2021. Costs totaling $4,575 were capitalized during the second quarter of 2018 and the Company began amortization.
Research and Development
During fiscal years ended 2023 and 2022, we did not incur any expense for research and development activities.
Employees
We currently have three employees, Diana Jakowchuk our Secretary, Treasurer, Chung Cam, our Chief Financial Officer and Principal Accounting Officer and Walter Geldenhuys, our President, Chief Executive Officer. We may engage consultants and other service providers in the future to help us carry out our business plan.
Available Information
We file the following reports with the SEC under Section 13(a) of the Securities Exchange Act of 1934 as a smaller reporting company: Annual Reports on Form 10-K; Quarterly Reports on Form 10-Q; Current Reports on Form 8-K; and any amendments to these reports. You may request a copy of these filings at no cost. Please direct your requests to:
Diana Jakowchuk
Secretary and Treasurer
AVRS, Inc.
7659 E. Wood Drive
Scottsdale, AZ 85260
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The Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and all amendments to these reports and other information that we file with or furnish to the Securities and Exchange Commission, or the SEC, are accessible free of charge on our website. We make these documents available as soon as reasonably practicable after we file them with or furnish them to the SEC. You can also read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington DC 20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site at www.sec.com that contains our reports, proxy and information statements and other information that we file electronically with the SEC.
Item 2. Properties.
Our principal executive offices are located at 7659 E. Wood Drive, Scottsdale, Arizona and are provided to us free of charge by Diana Jakowchuk, our Secretary and Treasurer.
Item 3. Legal Proceedings.
From time to time, we may become involved in legal proceedings or other litigation that we consider to be a part of the ordinary course of our business. Presently, we are not involved in any litigation and to the best knowledge of management, there are no legal proceedings pending or threatened against the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
On July 14, 2023 Advanced Voice Recognition Systems (AVOI), Inc. entered into a Letter of Intent with Rivulet Media, Inc. (RIVU) agreeing to purchase from the current shareholders of RIVU (the “Seller”) and Seller agreed to sell to AVOI, one hundred percent (100%) of the issued and outstanding shares of the common stock, preferred stock (the Shares) and all issued warrants in exchange for the same number and designation of AVOI common and preferred shares and warrants. The transaction is subject to the completion of a reverse stock split of 100 to 1 of AVOI issued and outstanding shares of common stock and an increase of AVOI authorized preferred shares to 25 million as well as the completion of an audit of RIVU. The reverse stock split of 100 to 1 of AVOI issued and outstanding shares of common stock has been completed as had the increase of AVOI authorized preferred shares to 25 million.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Commencing on June 19, 2008, our common stock has been quoted on the OTC under the symbol “AVOI”. The following table sets forth the high and low bid prices per share of our common stock for each full quarterly period in 2023 and 2022. These prices represent inter-dealer quotation without retail markup, markdown or commission and may not necessarily represent actual transactions.
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Three Months Ended December 31, 2023 | $ | 0.99 |
| $ | 0.40 |
Three Months Ended September 30, 2023 |
| 1.89 |
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| 0.30 |
Three Months Ended June 30, 2023 |
| 2.50 |
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| 0.60 |
Three Months Ended March 31, 2023 |
| 0.90 |
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| 0.50 |
Three Months Ended December 31, 2022 |
| 0.80 |
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| 0.48 |
Three Months Ended September 30, 2022 |
| 1.20 |
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| 0.40 |
Three Months Ended June 30, 2022 |
| 1.70 |
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| 0.51 |
Three Months Ended March 31, 2022 |
| 2.80 |
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| 0.80 |
Holders
As of December 31, 2023, we have approximately 77 holders of record of our common stock and 5,476,685 shares issued and outstanding. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock, whose shares is held in the names of various securities brokers, dealers and registered clearing agencies. The transfer agent of our common stock is Pacific Stock Transfer, 6725 Via Austi Pkwy, Suite 300, Las Vegas NV 89119.
Dividends
We have not declared any cash dividends, nor do we have any current plans to do so. We are not subject to any legal restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent. We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable future.
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Unregistered Sales of Equity Securities
We have not sold any equity securities during the period covered by this Annual Report on Form 10-K that were not previously disclosed by us in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Item 6. Selected Financial Data.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This document contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions. When used in this document, the words “expects”, “anticipates”, “intends” and “plans” and similar expressions are intended to identify certain of these forward-looking statements. The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document. Our actual results could differ materially from those discussed in this document.
Results of Operation
We completed a stock exchange on May 19, 2008, and changed our business model. We have not generated any revenue since inception and do not have any cash generating product or licensing sales. We have incurred losses since Inception (March 15, 1994).
We had a net loss of $310,877 for the year ended December 31, 2023, as compared to a net loss of $48,589 in 2022. Professional fees were $72,241 in 2023, as compared to $32,288 in 2022, an increase of $39,953. An increase in auditing fees is responsible for the increase in professional fees. Office was $4,305 in 2023 as compared to $8,687 in 2022, a decrease of $4,382.
Liquidity and Capital Resources
For the year ended December 31, 2023, we used $348,216 of cash in operating activities and $1,052 cash in investing activities. We received $0 of cash for the sale of our common stock. As a result, for the year ended December 31, 2023, we recognized a $342 net increase in cash and cash equivalents. During the year ended December 31, 2022, we used $46,499 of cash in operating activities and $0 cash in investing activities. We received $5,000 of cash from the sale of shares of our common stock. As a result, for the year ended December 31, 2022, we recognized an$12,010 net decrease in cash and cash equivalents.
At December 31, 2023, we had current assets of $480 and current liabilities of $350,196 as compared to current assets of $138 and current liabilities of $343,731 at December 31, 2022.
Because of our history of losses, net capital deficit and lack of assurance of additional financing, the audit report on our financial statements contains a “going concern” opinion regarding doubt about our ability to continue as a going concern.
In an attempt to address our financing needs, we have made sales of our common stock in private transactions.
During year ended December 31, 2022, the Company entered into a Stock Purchase Agreements for the private sale to one person or entity of an aggregate of 3,334 shares of the common stock for aggregate proceeds of $5,000 which was paid in full in the period. On December 29, 2022, the Company entered into an Escrow agreement for the purchase of 262,579,731 shares of the Company’s Common Stock. The shares were in Escrow until full payment was received on April 19, 2023. and released to JJW Investments, LLC (“JJW”). On April 19, 2023, payment of $305,683 was received from JJW for the 262,579,731, shares of the Company’s Common Stock representing 48% of the Company’s issued and outstanding common stock. JJW purchased an additional 17,000,000 shares representing 3% of the Company’s issued and outstanding common stock for a total of 51% of the Company.
On March 16, 2015 we entered into a letter agreement with Adapt IP Ventures, LLC (Adapt IP) confirming the retention of Adapt IP to assist us in identifying companies that might be interested in acquiring and / or licensing our patents, to attempt to negotiate financial terms and conditions for acquisition and / or licensing and to assist with collection of compensation from such entities. Adapt IP will receive a success fee of 15% of net compensation received from such entities based upon Adapt IP’s efforts. We or Adapt IP may terminate the agreement upon 30 days’ notice to the other party.
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On April 20, 2015 we made a Promissory Note to Adapt IP for $20,000, and Adapt IP agreed to pay to our patent counsel up to $20,000 for patent work on our behalf. The Note matures one year from the date of the Note. We are obligated to repay the funds advanced by Adapt IP plus a premium of 10% of the principal amount and a percentage of proceeds received by us from any monetization event involving the patents. If we repay the Note within the six months of the date of the Note, the percentage will be 1%, and it will be 2% after six months. As of December 31,2022, $15,450 interest has accrued. During the year ended December 31, 2023, $8,385 in accrued interest was forgiven and $7,065 was paid.
Historically, our President has loaned or advanced to us funds for working capital on an “as needed” basis. There is no assurance that these loans advances will continue in the future. At December 31, 2023 and December 31, 2022, we owed our officers accrued payroll an aggregate of $219,677 and $162,380, respectively. As of December 31, 2023, and 2022, Walter Geldenhuys, who is our President and Chief Executive Officer, and who serves as a member of our Board of Directors advanced the Company $12,500 and $6,000, respectively. Our Secretary / Treasurer advanced the Company a total of $38,188 at December 31, 2022 which was paid in full during the year ended December 31, 2023.
Because of our history of losses, and lack of assurance of additional financing, the audit reports on our financial statements at December 31, 2023 and 2022 contained a “going concern” opinion regarding doubt about our ability to continue as a going concern.
We will require additional debt or equity financing or a combination of both in order to carry out our business plan. We plan to raise additional funds through future sales of our securities, until such time as our revenues are sufficient to meet our cost structure, and ultimately achieve profitable operations. There is no assurance we will be successful in raising additional capital or achieving profitable operations. Our board of directors may attempt to use non-cash consideration to satisfy obligations that may consist of restricted shares of our common stock. These actions would result in dilution of the ownership interests of existing shareholders and may further dilute our common stock book value.
To obtain sufficient funds to meet our future needs for capital, we will from time to time, evaluate opportunities to raise financing through some combination of the private sale of equity, or issuance of convertible debt securities. However, future equity or debt financing may not be available to us at all, or if available, may not be on terms acceptable to us. We do not intend to pay dividends to shareholders in the foreseeable future.
U.S. Patent #7,558,730 expands an extremely broad base of features in speech recognition and transcription across heterogeneous protocols. Costs totaling $58,277 have been capitalized and amortization began in the third quarter of 2009. The Patent was fully amortized in the fourth quarter of 2021.
U.S. Patent #7,949,534 is an expansion of the coverage of our second patent and incorporates speech recognition and transcription among transcription engines employing incompatible protocols. Costs totaling $3,365 have been capitalized and amortization began in the second quarter of 2011. The Patent was fully amortized in the fourth quarter 2021.
U.S. Patent #8,131,557 is an expansion of our second and third patent. Costs totaling $5,092 have been capitalized and amortization began in the first quarter 2012. The Patent was fully amortized in the fourth quarter of 2021.
U.S. Patent #8,498,871 titled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” was issued July30, 2013 by the U.S. Patent and Trademark Office. Costs totaling $21,114 have been capitalized and amortization began in the third quarter 2013.The Patent was fully amortized in the fourth quarter of 2021.
U.S. Patent #9,142,217, an expansion of our fourth patent was issued September 22, 2015 by the U.S. Patent and Trademark Office. Costs totaling $35,068 have been capitalized and amortization began in the third quarter 2015. The Patent was fully amortized in the fourth quarter of 2021.
U.S. Patent #9,934,786 issued April 3, 2018 by the U.S. Patent and Trademark Office. Costs totaling $4,575 have been capitalized and amortization began in the second quarter of 2018. The Patent was fully amortized in the fourth quarter of 2021.
In order for our operations to continue, we will need to generate revenues from our intended operations sufficient to meet our anticipated cost structure. We may encounter difficulties in establishing these operations due to our inability to successfully prosecute any patent enforcement actions or our inability to effectively execute our business plan.
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Off-Balance Sheet Arrangements
On March 16, 2015 Advanced Voice Recognition Systems, Inc. (AVRS) entered into a material Letter Agreement with Adapt IP Ventures, LLC (Adapt IP) in which it retained Adapt IP on an exclusive basis. Adapt IP will assist AVRS in identifying companies that might be interested in acquiring and / or licensing the Patents, attempt to negotiate financial terms and conditions for the acquisition and /or licensing of the Patents with such Entity(ies) and assist with collection of compensation from such entities. In connection with services provided under this Agreement, AVRS shall pay Adapt IP a success fee.
On August 20, 2015, Advanced Voice Recognition Systems, Inc. (AVRS) entered into a letter agreement with Dominion Harbor Group, LLC(Dominion) pursuant to which Dominion will provide strategic advisory services to AVRS to support the common goal of the acquisition, sale licensing, prosecution, enforcement, and settlement with respect to AVRS’s intellectual property, including patents held by AVRS. Dominion has agreed to advance costs recommended by it, including court filing fees, discovery and other litigation costs, and patent prosecution costs, up to an aggregate of $10,000,000. AVRS will be responsible for costs not recommended by Dominion, as well as travel and ordinary business expenses incurred by AVRS. Except for the advanced costs by Dominion, AVRS will be responsible for any contingency payments to law firms. On June28, 2017 AVRS and Dominion agreed to terminate the August 20, 2015 Letter Agreement. AVRS did not incur any material early termination penalties in connection of the early termination of the agreement.
On November 1, 2016, Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Contingent Fee Agreement (the “Agreement”) with Buether Joe & Carpenter, LLC (“BJC”) pursuant to which BJC will represent AVRS in connection with investigating and asserting claims relating to certain patents, including the negotiation of license agreements and the filing and prosecution of lawsuits, against any potential infringers of rights associated with such patents (the “Patent Rights”) BJC will handle licensing and litigation activities under the Agreement on a contingent fee basis. BJC’s fee will depend upon whether AVRS recovers any sums by way of licensing, settlement, trial or otherwise with respect to the Patent Rights. On June 6, 2017 AVRS and BJC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 8. Financial Statements and Supplementary Data.
During year ended December 31, 2022, the Company entered into a Stock Purchase Agreements for the private sale to one person or entity of an aggregate of 3,334 shares of the common stock for aggregate proceeds of $5,000 which was paid in full in the period. On December 29, 2022, the Company entered into an Escrow agreement for the purchase of 262,579,731 shares of the Company’s Common Stock. The shares were in Escrow until full payment was received on April 19, 2023 and released to JJW Investments, LLC (“JJW”). On April 19, 2023, payment of $305,683 was received from JJW for the 262,579,731, shares of the Company’s Common Stock representing 48% of the Company’s issued and outstanding common stock. JJW purchased an additional 17,000,000 shares representing 3% of the Company’s issued and outstanding common stock for a total 51% of the Company.
The Company effected a 1-for 100 reverse stock split of its outstanding shares of common stock on July 3, 2023. The reverse stock split did not change the number of authorized shares of common stock or par value. All references in these condensed financial statements to share, share prices, and other per share information in all periods for 2023 have been adjusted, on a retrospective basis, to reflect the reverse stock split.
7
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Advanced Voice Recognition Systems, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Advanced Voice Recognition Systems, Inc. as of December 31, 2023 and 2022, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/S/ BF Borgers CPA PC
We have served as the Company's auditor since 2013
March 25, 2024
8
Advanced Voice Recognition Systems, Inc.
Condensed Balance Sheets
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ASSETS |
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Current Assets |
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Fixed Assets |
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Total Assets |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Total Liabilities |
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Commitments and Contingencies |
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Stockholders’ Deficit |
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Accumulated Deficit |
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Total Stockholders' Deficit |
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Total Liabilities and Stockholders' Deficit |
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(1)
(2)
The accompanying notes are an integral part of these financial statements.
9
Advanced Voice Recognition Systems, Inc.
Condensed Statements of Operations
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Sales |
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Cost of goods sold |
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Operating expenses: |
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Loss from operations |
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Other income and (expense): |
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Gain (loss) before income taxes |
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Basic and diluted gain (loss) per common share* |
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The accompanying notes are an integral part of these financial statements.
10
Advanced Voice Recognition Systems, Inc.
Condensed Statement of Stockholders’ Deficit
For the years ended December 31, 2023 and December 31, 2022
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Balance at December 31, 2021 |
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Sales of Common Stock |
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Shares In Escrow |
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Net Loss |
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Balance at December 31, 2022 |
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Reverse Split (1) |
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Shares issued for reverse stock split |
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Net Loss |
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Balance at December 31, 2023 |
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(1)
The accompanying notes are an integral part of these financial statements.
11
Advanced Voice Recognition Systems, Inc.
Condensed Statements of Cash Flows
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Cash Flows from Operating Activities: |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Accounts payable and accrued liabilities |
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Net cash provided (used) in operating activities |
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Cash Flows from Investing Activities: |
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Cash Flows from Financing Activities: |
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Release from escrow |
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Payment of advance from related party |
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Payment of note payable AIP |
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Net change in cash |
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Cash at Beginning of Period |
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Cash at End of Period |
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Supplemental Disclosure of Cash Flow Information: |
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Cash paid during the period for: |
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Interest |
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Income taxes |
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Non-cash investing and financing activities: |
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Round up shares issued |
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The accompanying notes are an integral part of these financial statements.
12
Advanced Voice Recognition Systems, Inc.
Notes to Unaudited Condensed Financial Statements
Note 1. Nature of Operations
Company Overview
The operations of Advanced Voice Recognition Systems, Inc. (“AVRS” or the “Company”), http://www.avrsys.com, commenced in 1994 with a predecessor entity called NCC, Inc. NCC, Inc. was incorporated on March 15, 1994, in the State of Ohio. NCC, Inc. operated as a software and hardware development company that marketed voice recognition and transcription products for commercial applications.
In May 2000, WG Investments, LLC acquired the assets of NCC, Inc. and subsequently changed its name to NCC, LLC. NCC, LLC (also a predecessor to AVRS) continued the operations of NCC, Inc. until approximately December 31, 2001, when shifts in the industry’s markets caused NCC, LLC to suspend its operations.
AVRS was incorporated in the State of Colorado on July 7, 2005. In September 2005, the members of NCC, LLC transferred all of their membership interests in NCC, LLC to AVRS in exchange for 93,333,333 shares (post-recapitalization) of AVRS common stock. In December 2005, the Board of Directors approved a 1.5-to-1 stock split issuing 46,666,667 common shares (post-recapitalization), which increased the number of common shares outstanding to 140 million shares (post-capitalization). Following the incorporation of AVRS, the Company initiated a new business plan and intends to continue its operations in the voice recognition and transcription industry.
AVRS is a software development company specializing in speech recognition technologies. AVRS has successfully obtained patent protection of its proprietary technology (refer to Note 3, Intangible Assets). The Company continues to explore all options to monetize and enforce our patent portfolio through patent enforcement and licensing of the six patents issued.
Amended and Restated Articles of Incorporation
On July 3, 2023, the Company filed Amended and Restated Articles of Incorporation for the State of Nevada where the authorized number of common shares were amended to five hundred seventy-two million five hundred thousand shares (572,500,000) consisting of five hundred forty-seven million five hundred thousand (547,500,000) common shares with par value of $0.001 per share and twenty- five million (25,000,000) preferred shares with par value of $0.001.
Stock Exchange Agreement
On April 28, 2008, the Company entered into a Stock Exchange Agreement (“the Agreement”) with Samoyed Energy Corp., a Nevada corporation(“Samoyed”), which resulted in a reverse acquisition. The Agreement provided for the reorganization of AVRS with Samoyed. In connection with the Agreement, Samoyed acquired all of the issued and outstanding common shares of AVRS in exchange for 140 million shares of Samoyed’s common stock. On May 19, 2008, at the closing of the Agreement, the former shareholders of AVRS owned approximately 85% of the outstanding common stock of Samoyed, resulting in a change in control.
For accounting purposes, this acquisition has been treated as a reverse acquisition and recapitalization of AVRS, with Samoyed the legal surviving entity. Since Samoyed had, prior to the recapitalization, minimal assets and limited operations, the recapitalization has been accounted for as the sale of 24,700,008 shares of AVRS common stock for the net liabilities of Samoyed. Therefore, the historical financial information prior to the date of the recapitalization is the financial information of AVRS. Costs of the transaction have been charged to the period in which they are incurred.
In connection with the Agreement, a shareholder of Samoyed holding an aggregate of 3.5 million shares of Samoyed’s common stock made payments totaling $565,651 since 2008 in lieu of tendering shares to the Company. The Company received the final payment of $6,000 on February 15, 2012.
Stock Purchase Agreements
During year ended December 31, 2022, the Company entered into a Stock Purchase Agreements for the private sale to one person or entity of an aggregate of 3,334 shares of the common stock for aggregate proceeds of $5,000 which was paid in full in the period. On December 29, 2022, the Company entered into an Escrow agreement for the purchase of 262,579,731 shares of the Company’s Common Stock. The shares were in Escrow until full payment was received on April 19, 2023 and released to the purchaser (Note 8).
Commitments and Contingencies
13
On April 20, 2015 Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Material Letter Agreement with an unrelated third party (“AIP”) in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS. AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP.
On September 21, 2018, Advanced Voice Recognition Systems, Inc. (“AVRS”) and Buether Joe & Carpenter, LLC (“BJC) entered into a Letter of Engagement for Legal Services Limited Scope Agreement (“Agreement”) with Schmeiser, Olsen & Watts LLP (“the Firm”) pursuant to which the Firm will serve as local counsel in the United States District Court, District of Arizona. The Firm has been hired to represent AVRS as local counsel in connection with forthcoming litigation in the U.S. District Court, District of Arizona. AVRS may terminate the Agreement at any time.
Litigation
From time to time, we may become involved in legal proceedings or other litigation that we consider to be a part of the ordinary course of our business. Presently, we are not involved in any litigation and to the best knowledge of management, there are no legal proceedings pending or threatened against the Company.
Reverse Split and Increase in Authorized Shares
On July 5, 2023, the Shareholders approved to authorize a reverse split of 1 new share for one hundred old shares basis as of September 30, 2023 where fractional shares will be rounded up to the next whole share. In addition, the Shareholders approved to authorize twenty-five million (25,000,000) preferred shares for a total of 572,500,000 authorized shares of the company. The Articles of Information with the state of Nevada were amended to reflect the approved actions of the Shareholders.
Letter of Intent for Business Acquisition
On July 14, 2023, the Company issued a letter of intent to acquire 100% of issued and outstanding common and preferred shares of Rivulet Media, Inc, a Delaware corporation, with the ticker symbol (RIVU) in a stock for stock transaction subject to the completion of a reverse stock split of 100 to 1 of the Company’s issued and outstanding shares of common stock and an increase of authorized preferred shares by twenty-five million (25,000,000).
Reverse Stock Split
The Company effected a 1-for 100 reverse stock split of its outstanding shares of common stock on July 3, 2023. The reverse stock split did not change the number of authorized shares of common stock or par value. All references in these condensed financial statements to share, share prices, and other per share information in all periods for 2023 have been adjusted, on a retrospective basis, to reflect the reverse stock split.
Note 2. Significant Accounting Policies
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Liabilities exceed assets and there is a capital deficiency of $
The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. During the year ended December 31, 2022, the Company received an aggregate of $
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
14
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at December 31, 2023 of $
Note 3. Intangible and Fixed Assets
Intangible Assets
The Company monitors the anticipated outcome of legal actions, and if it determines that the success of the defense of a patent is probable, and so long as the Company believes that the future economic benefit of the patent will be increased, the Company capitalizes external legal costs incurred in the defense of the patent. Upon successful defense of litigation, the amounts previously capitalized are amortized over the remaining life of the patent.
On July 7, 2009, U.S. Patent # 7,558,730, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 7, 2009, and ending 20 years from the application date of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2009, and the Company began amortization. AVRS filed a Complaint in the United States District Court Northern District for Arizona (Case No. 2-18-cv-2083) on July 3, 2018, and alleges that Apple products infringe U.S. Patent No. 7,558,730 entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” (the “‘730 Patent”). The patent was fully amortized in the fourth quarter of 2021.
On May 24, 2011, U.S. Patent #7,949,534, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning May 24, 2011, and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2011 and the Company began amortization. The patent was fully amortized in the fourth quarter of 2021.
On March 6, 2012, U.S. Patent #8,131,557, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning March 6, 2012, and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended March 31, 2012 and the Company began amortization. The patent was fully amortized in the fourth quarter of 2021.
On June 27, 2013, the Company filed two additional continuation applications 13/928/381 and 13/928,383 with the U.S. Patent and Trademark Office entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols.” On August 31, 2015, Application13/928,381 was abandoned by the Company. Deferred costs were charged to operations for the quarter ended September 30, 2015. The patent was fully amortized in the fourth quarter of 2021.
On July 30, 2013, U.S. Patent #8,498,871, entitled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 30, 2013, and ending 20 years from the application date of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2013, and the Company began amortization. The patent was fully amortized in the fourth quarter of 2021.
On September 22, 2015, U.S. Patent #9,142,217, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning September 22, 2015, and ending 20 years from the application date of the parent application (US Patent No. 7,558,730) of November 27, 2001, or November 27, 2021. The deferred fees were capitalized during the quarter ended September 30, 2015 and the Company began amortization. The patent was fully amortized in the fourth quarter of 2021.
On April 3, 2018, U.S. Patent #9,934,786, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning April 3, 2018, and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021. The deferred costs were capitalized during the quarter ended September 30, 2018, and the Company began amortization. The patent was fully amortized in the fourth quarter of 2021.
15
Amortization at December 31, 2022 is as follows:
SCHEDULE OF INTANGIBLE ASSETS
Ended December 31, 2022 |
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U.S. Patent # |
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| Carrying Value |
| Amortization |
| Balance |
7,558,730 |
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| $ |
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7,949,534 |
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8,131,557 |
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8,498,871 |
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9,142,217 |
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9,934,786 |
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| $ |
| $ | |
Amortization at December 31, 2023 is as follows:
SCHEDULE OF INTANGIBLE ASSETS
Ended December 31, 2023 |
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U.S. Patent # |
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| Carrying Value |
| Amortization |
| Balance |
7,558,730 |
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| $ |
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7,949,534 |
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|
|
| |||
8,131,557 |
|
|
|
| |||
8,498,871 |
|
|
|
| |||
9,142,217 |
|
|
|
| |||
9,934,786 |
|
|
|
| |||
|
| $ |
| $ |
| $ | |
The Patents were fully amortized in the fourth quarter 2021.
Fixed Assets
Computer equipment, net consisted of the following at December 31, 2023:
PLANT, PROPERTY, EQUIPMENT
Ended December 31, 2023 |
|
|
|
|
|
| |
|
| Carrying Value |
| Depreciation |
| Balance | |
Computer |
|
| $ |
| $ |
| $ |
|
| $ |
| $ |
| $ | |
As of December 31, 2023, depreciation expense totaled $123.
Note 4. Related Party Transactions
Related Parties Transactions and Indebtedness
The Company owed the officers aggregate of $
On
On
16
On
On
On
On
Note 5.Note Payable & Accounts Payable
On
Note 6.Stockholder Equity / (Deficit)
The Company has issued shares of its common stock pursuant to certain agreements as described in Note 1.
Note 7. Income Taxes
A reconciliation of the U.S. statutory federal income tax rate to the effective rate is as follows:
INCOME TAXES | |||
|
|
|
|
December 31, 2023 |
| December 31, 2022 | |
U.S. federal statutory graduated rate |
| ||
State income tax rate, net of federal benefit |
| ||
Contributed services |
| ||
Costs capitalized under Section 195 | ( |
| ( |
Effective rate |
| ||
The Company is considered a start-up company for income tax purposes. As of December 31, 2023, the Company had not commenced its trade operations, so all costs were capitalized under Section 195. Accordingly, the Company had no net operating loss carry forwards at December 31, 2022.
Note 8. Change in Control
On December 29, 2022, the Company entered into an Escrow agreement for the purchase of 262,579,731 shares of the Company’s Common Stock. The shares remained in Escrow until full payment is made. On April 19, 2023 payment of $
Note 9. Appointment of CFO
Appointment of CFO
On May 8, 2023, Walter Geldenhuys resigned from his position of Chief Financial Officer of the Company and Chung Cam was appointed Chief Financial Officer of the Company. Mr. Cam will devote his full time and attention to his duties and will receive a monthly salary of $15,000 for the first 3 months and $20,000 monthly thereafter, payable in accordance with the Company’s standard payroll practices, provided that such amount may be deferred as determined by Mr. Cam or the Board to cover other Company expenses.
17
Note 10. Subsequent Events
The Company performed an evaluation of subsequent events through the date of filing of these consolidated financial statements with the SEC. There were no material subsequent events which affected, or could affect, the amounts or disclosures in the consolidated financial statements, other than those as described below.
Sale of Unregistered Securities
On
Entry Into a Material Definitive Agreement.
On
Related Parties Transactions
On
On
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A(T).Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2023 Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and is communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on our review and evaluation, our chief executive officer concluded that our disclosure controls and procedures were adequate and effective, including consideration of the matters identified below to ensure that material information relating to us would be made known to them by others within the Company in a timely manner, particularly during the period in which this annual report on Form 10-K was being prepared, and that no changes are required at this time. The evaluation of our disclosure controls and procedures and the conclusion as to their adequacy and effectiveness, included consideration of the deficiency noted below and the fact that our chief executive officer and chief financial officer is extensively involved in day-to-day transactional activities combined with the fact that the volume of transactions and activities of the Company are limited.
We have identified, as of December 31, 2023 and 2022, a lack of segregation of duties in accounting and financial reporting activities, which we believe is a material weakness. The size of our business necessarily imposes practical limitations on the effectiveness of those internal control practices and procedures that rely on the segregation of duties. Our chief executive officer and chief financial officer work closely and review all day-to-day transactional activities with the secretary Treasurer. The volume of the transactions of the Company is limited.
18
Management believes this lack of segregation of duties in accounting and financial reporting did not result in material inaccuracies or omissions of material fact and, to the best of its knowledge, believes that the financial statements for the years ended December 31, 2023 and 2022 fairly present in all material respects the financial condition and results of operations for the Company in conformity with GAAP. There is, however, a reasonable possibility that a material misstatement of the annual or interim financial statements would not have been prevented or detected as a result of this weakness.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)and 15d-15(f) under the Exchange Act. Our 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. Our internal control over financial reporting includes those policies and procedures that:
(1)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of its management and directors; and
(3)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Our management assessed the effectiveness of its internal control over financial reporting as of December 31, 2023. We have identified, as of December 31, 2023, a lack of segregation of duties in accounting and financial reporting activities, which we believe is a material weakness. The size of our business necessarily imposes practical limitations on the effectiveness of those internal control practices and procedures that rely on the segregation of duties.
Management believes this deficiency in internal control did not result in material inaccuracies or omissions of material fact and, to the best of its knowledge, believes that the financial statements for the years ended December 31, 2023 and 2022 fairly present in all material respects the financial condition and results of operations for the Company in conformity with GAAP. There is, however, a reasonable possibility that a material misstatement of the annual or interim financial statements would not have been prevented or detected as a result of this weakness.
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.
The statements contained in this Quarterly Report that are not historical are “forward-looking statements”, which can be identified by use of terms such as “may”, “could”, “should”, “expect”, “plan”, “project”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “pursue”, “target” or “continue”, the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.
Changes in internal control over financial reporting.
We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.
There were no changes in our internal controls over financial reporting that occurred during the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
19
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table and paragraphs provide the name and age of each of our current directors, executive officers and significant employees, the principal occupation of each during the past five years and, with respect to directors, the year in which the director was first elected as a member of our Board of Directors. Information as to the stock ownership of each of our directors and all of our current executive officers as a group is provided above under “Security Ownership of Certain Beneficial Owners and Management.” There are no family relationships between any director or executive officer. Our directors and officers serve until their respective successors are elected or appointed, as the case may be.
Name of Director and Executive Officers | Age |
| Month and Year Elected as Director |
| Position with the Company |
|
|
|
|
|
|
Walter Geldenhuys | 67 |
| May 2008 |
| President, Chief Executive Officer and Sole Director |
|
|
|
|
|
|
Chung Cam | 38 |
| - |
| Chief Financial Officer and Principal Accounting Officer |
|
|
|
|
|
|
Diane Jakowchuk | 70 |
| - |
| Secretary and Treasurer |
Walter Geldenhuys, Sole Director, President and Chief Executive Officer
Mr. Geldenhuys, sole director of AVRS, has served as a member of our Board of Directors since May 2008. Mr. Geldenhuys served as the President of Advanced Voice Recognition Systems, Inc., a Colorado corporation, also known as AVRS, from 2005 until AVRS was merged with and into us in June 2008. From 2000 to 2005, Mr. Geldenhuys was a member of NCC, LLC, which became AVRS’s wholly-owned subsidiary in 2005. In addition, Mr. Geldenhuys has owned Progressive Technologies LLC, a design and manufacturing concern, since 2002.
Chung Cam, Chief Financial Officer and Principal Accounting Officer
Mr. Cam has served as our Chief Financial Officer and Principal Accounting Officer since May 2023. Mr. Cam previously served in various roles at Meta Platforms, Inc., an internet content and information company as a Risk and Controls Analyst; Allsaints USA Retail Limited, an international high fashion apparel retailer as a Finance Manager, Activision Blizzard, an interactive entertainment company and Green Dot Corporation, a credit services company as an internal auditor, and various public accounting firms as a financial statement and internal controls auditor. He currently sits on the Supervisory Committee of Ventura County Credit Union. Mr. Cam is a managing member of various LLCs with real estate holdings. Mr. Cam holds an MBA in Finance from Pepperdine University, B.A. in Real Estate from Ashford University, and B.S. in Business Administration from the University of California, Riverside. Mr. Cam also holds professional designations as a Certified Public Accountant (CPA), Certified Information Systems Auditor (CISA), Certified Internal Auditor (CIA), and is licensed as a real estate broker in the state of California.
Diana Jakowchuk, Secretary, Treasurer and Principal Accounting Officer
Ms. Jakowchuk has served as our Secretary, Treasurer and Principal Accounting Officer since May 2008. Ms. Jakowchuk served as Secretary to AVRS, Inc. (a Colorado company). Between December 2004 and July 2006, Ms. Jakowchuk served as office manager for a retail hardware company. From December 2001 to December 2004, Ms. Jakowchuk served as the State Victim Assistance Coordinator for MADD Victim Services. Prior to December 2001, Ms. Jakowchuk served as Records Manager for NCC, LLC a predecessor to AVRS. Ms. Jakowchuk received an Associates of Arts degree from Scottsdale Community College in 1979.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and designated officers to file reports of ownership and changes in ownership of our equity securities with the Securities and Exchange Commission. Based solely on our review of the copies of such forms that we have received and on written representations from reporting persons, we believe that during the fiscal year ended December 31, 2023, all reporting persons complied with all applicable filing requirements.
Corporate Governance, Code of Ethics
We are committed to maintaining sound corporate governance practices. These practices are essential to running our business efficiently and to maintaining our integrity in the marketplace. Our Board of Directors is responsible for providing effective governance oversight over our affairs. Our corporate governance practices are designed to promote honesty and integrity throughout our company.
20
We have adopted a Code of Ethics applicable to anyone who serves as our Chief Executive Officer, Chief Financial Officer, principal accounting officer or controller. A copy of the Company’s Code of Ethics is incorporated by reference to this Form 10-K as Exhibit 14.1.
Audit Committee
The entire Board of Directors operates as the Audit Committee. We currently do not have a written audit committee charter or similar document. When the audit committee is formed, we intend to have a designated audit committee “financial expert” who will be responsible for reviewing the results and scope of the audit, and other services provided by the independent auditors, and review and evaluate the system of internal controls.
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth all compensation paid to our principal executive officer and those individuals who received compensation in excess of $100,000 per year (collectively, the “Named Executive Officers”) for our last two completed fiscal years:
Summary Compensation Table | ||||||||||||||||||
A Name and Principal Position with AVRS | B Year |
| C Salary ($) |
| D Bonus ($) |
| E Stock Awards |
| F Option Awards ($) |
| G Non-Equity Incentive Plan Compensation ($) |
| H Nonqualified Deferred Compensation Earnings ($) |
| I All Other Compensation ($) |
| J Total (4) | |
| ||||||||||||||||||
Walter Geldenhuys, President, CEO, Director (1) | 2023 |
| 137,800 |
| - |
| - |
| - |
| - |
| - |
| - |
| 137,800 | |
2022 |
| 3,650 |
| - |
| - |
| - |
| - |
| - |
| - |
| 3,650 | ||
| ||||||||||||||||||
Chung Cam CFO and Principal Accounting Officer (3) | 2023 |
| 26,250 |
| - |
| - |
| - |
| - |
| - |
| - |
| 26,250 | |
| ||||||||||||||||||
Diane Jakowchuk, Principal Accounting Officer (2) | 2023 |
| 32,080 |
| - |
| - |
| - |
| - |
| - |
| - |
| 32,080 | |
2022 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - | ||
1 Mr. Geldenhuys was appointed to our Board of Directors and as our President, Chief Executive Officer and Chief Financial Officer in May 2008. Mr. Geldenhuys also served as the President, Chief Executive Officer and Director of AVRS during the year ended December 31, 2007, and until AVRS merged with and into us in June 2008. The amounts reflected in this table include compensation Mr. Geldenhuys received as President, Chief Executive Officer of AVRS in 2023 and 2022.
2 Ms. Jakowchuk was appointed as our Secretary, Treasurer and Principal Accounting Officer in May 2008. The amounts reflected in table include compensation Ms. Jakowchuk received as Secretary, Treasurer and Principal Accounting Officer in 2023 and 2022.
3 Mr. Cam was appointed as our Chief Financial Officer and Principal Accounting Officer in May 2023. The amounts reflected in table include compensation Mr. Cam received as Chief Financial Officer and Principal Accounting Officer in 2023.
4 Due to reduced sales of shares in private offerings of common stock in 2013, $162,380 of officer compensation was accrued as payroll payable. Total Officer Compensation paid in 2022 was $3,650. The Company continued to experience a reduction in income. The officers agreed that no payroll would accrue. Payroll accruals resumed during the year ended December 31, 2023.
Salary (Column C)
The amounts reported in column C represent base salaries paid to each of the Named Executive Officers for the relevant fiscal year.
21
Bonus (Column D)
The amounts reported in column D represent the cash bonuses paid each of the Named Executive Officers for the relevant fiscal year.
Option Awards (Column F)
The amounts reported in column F represent the dollar amount of stock option awards recognized for each of the Named Executive Officers as compensation costs for financial reporting purposes (excluding forfeiture assumptions) in accordance with FAS 123(R) for the relevant fiscal years.
Effective January 1, 2006, we adopted the provisions of SFAS No. 123(R), which requires the measurement and recognition of compensation expense for all share-based payment awards (including stock options) made to employees and directors based on estimated fair value. We previously accounted for the stock options under the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure now known as ASC 718 “Compensation – Stock Compensation.”
The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatilities are based on implied volatilities from similar companies that operate within the same industry sector index. We calculated the historical volatility for each comparable company to come up with an expected average volatility and then adjusted the expected volatility based on factors such as historical stock transactions, major business transactions, and industry trends. The expected terms of the options are estimated based on factors such as vesting periods, contractual expiration dates and historical exercise behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
Employment Contracts and Termination of Employment and Change-In-Control Arrangements
We do not have written employment agreements or other employment arrangements with any of our executive officers. Our Board of Directors periodically evaluates the appropriate terms and conditions for the employment of our executive officers.
Outstanding Equity Awards At Fiscal Year End
We do not have any unexercised stock options outstanding for any of our named executive officers.
Director Compensation
We have made no arrangements for the remuneration of our directors, except that they will be entitled to receive reimbursement for actual, demonstrable out –of –pocket expenses, including travel expenses, if any, made on our behalf. No remuneration has been paid to our directors for services to date.
The following table sets forth all compensation paid to our directors for the last completed fiscal year:
Name |
| Fees Earned Or Paid in Cash ($) |
| Stock Awards ($) |
| Option Awards ($) |
| Non-Equity Incentive Plan Compensation ($) |
| Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
| All Other Compensation ($) |
| Total ($) |
Walter Geldenhuys (1) |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
1 Mr. Geldenhuys did not receive any compensation during the years ended December 31, 2022 and 2023 for his service as one of our Directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information with respect to the beneficial ownership of shares of our common stock as of December 31, 2013, unless otherwise indicated, (i) individually by our Chief Executive Officer and each of our other executive officers and by each of our directors, (ii) by all our executive officers and directors as a group, and (iii) by each person known to us to be the beneficial owner of more than five percent of the outstanding shares of our common stock. Except as noted in the footnotes below, each of the persons listed has sole investment and voting power with respect to the shares indicated. The information in the table is based on information available to us. The total number of paid shares of common stock outstanding on December 31, 2023 was 5,476,685.
22
Beneficial Owner (1) |
| Amount and Nature of Beneficial Ownership |
| Percentage of Common Stock Outstanding |
|
|
|
|
|
† Walter Geldenhuys, President, Chief Executive Officer and Director 112 E. Spruce Street Mitchell, SD 57301 |
| 321,995 (2) |
| 5.88% |
|
|
|
|
|
Diana Jakowchuk, Secretary and Treasurer 7659 E. Wood Drive Scottsdale, AZ 85260 |
| 36,122 |
| 0.66% |
|
|
|
|
|
Blake Thorshov 220 Rock Falls Road Arroyo Grande, CA 93420 |
| 445,429 |
| 8.13% |
|
|
|
|
|
JJW Investments LLC 1206 E Warner Road, Suite 101-I Gilbert, AZ 85260 |
| 2,795,798 |
| 51.05% |
† Named executive officer.
1 “Beneficial ownership” is defined in the regulations promulgated by the SEC as (A) having or sharing, directly or indirectly(i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer; or (B) directly or indirectly creating or using a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership. Unless otherwise indicated, the beneficial owner has sole voting and investment power.
2 This amount includes 1,360 shares of common stock held by Mr. Geldenhuys’ daughter, of which Mr. Geldenhuys may be deemed to have indirect ownership because of the father-daughter relationship.
Securities Authorized for Issuance under Equity Compensation Plans
We currently do not have any securities authorized for issuance under an equity compensation plan.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Transactions with Related Persons
Aside from the relevant provisions of the Nevada Revised Statutes and other applicable laws, we currently do not have a formal policy or procedure for the review, approval or ratification of related party transactions.
Director Independence
Our Board of Directors affirmatively determines the independence of each director and nominee for election as a director and has adopted the independence standards of the NASDAQ Capital Market, LLC. At this time, Walter Geldenhuys, the sole member of the Board of Directors, is not independent.
23
Item 14. Principal Accounting Fees and Services.
The following table sets forth the fees billed to us for professional services rendered by our principal accountant for the years ended December 31, 2023, and December 31, 2022:
Services |
| 2023 |
| 2022 |
|
|
|
|
|
Audit Fees |
| 60,500 |
| 37,900 |
Audit Related Services |
| - |
| - |
Tax Preparation Fees |
| 1,000 |
| 780 |
Total Fees |
| 61,500 |
| 38,680 |
Audit fees consist of fees for the audit of our financial statements. Audit-related services include review of our financial statements and quarterly reports that are not reported as audit fees. Tax fees included tax planning and various taxation matters.
PART IV
Item 15. Exhibits
|
|
3(i).4
31.1 | |
31.2 | |
32.1 | |
|
|
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.
|
|
|
|
|
|
|
| ADVANCED VOICE RECOGNITION SYSTEMS, INC.
|
Dated March 25, 2024 | By: | /s/ Walter Geldenhuys |
|
| Walter Geldenhuys |
|
| President, Chief Executive Officer (Principal Executive Officer) |
|
|
|
Dated March 25, 2024 | By: | /s/ Chung Cam |
|
| Chung Cam |
|
| Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
|
|
24
Exhibit 31.1
CERTIFICATION
I, Walter Geldenhuys, certify that:
1. I have reviewed this Annual Report on Form 10-K of Advanced Voice Recognition Systems, Inc.;
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: | March 25, 2024 | |
|
| |
Signature: | /s/ Walter Geldenhuys |
|
| Walter Geldenhuys | |
Title: | President, Chief Executive Officer | |
Exhibit 31.2
CERTIFICATION
I, Chung Cam, certify that:
1. I have reviewed this Annual Report on Form 10- of Advanced Voice Recognition Systems, Inc.;
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: | March 25, 2024 | |
|
| |
Signature: | /s/ Chung Cam |
|
| Chung Cam | |
Title: | Chief Financial Officer | |
Exhibit 32.1
SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
We, Walter Geldenhuys, President, Chief Executive Officer and Chung Cam, Chief Financial Officer of Advanced Voice Recognition Systems, Inc. (the Company), certify, that pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code:
(1) | The Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
|
(2) | Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Walter Geldenhuys |
|
Walter Geldenhuys | |
President, Chief Executive Officer | |
| |
/s/ Chung Cam | |
Chung Cam | |
Chief Financial Officer | |
March 25, 2024 | |
1