10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

OR

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-148546

DLT RESOLUTION, INC

(Exact name of registrant as specified in its charter)

Nevada	20-8248213
(State of Incorporation)	(I.R.S. Employer Identification No.)
5940 S. Rainbow Blvd., Ste 400-32132, Las Vegas, NV	89118
(Address of principal executive offices)	(Zip Code)

(702) 796-6363

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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.

Large accelerated filer	¨	Accelerated filer	¨
Non‑accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of May 21, 2018, 22,568,577 shares of the registrant’s Common Stock, $0.0001 par value, were issued and 18,753,577 were outstanding.

FORWARD-LOOKING STATEMENTS

This Form 10-Q for the quarterly period ended March 31, 2018 contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this document include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve assumptions, risks and uncertainties regarding, among others, the success of our business plan, availability of funds, government regulations, operating costs, our ability to achieve significant revenues, our business model and products and other factors. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties set forth in reports and other documents we have filed with or furnished to the SEC. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this document. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. The forward-looking statements in this document are made as of the date of this document and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.

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TABLE OF CONTENTS

FORM 10-Q

QUARTER ENDED MARCH 31, 2018

		Page
PART I  FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Unaudited Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017	4
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017	5
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20

3

Item 1: Financial Statements

DLT RESOLUTION, INC

Consolidated Balance Sheets

(Unaudited)

	March 31, 2018			December 31, 2017
ASSETS
Current assets
Cash	$	45,966		$	8,609
Accounts receivable		233,947			-
Total current assets		279,913			8,609
Equipment, net of accumulated depreciation		20,617			-
Intangible assets, net of accumulated amortization		615,431			115,944
Goodwill		514,437			-
Total assets	$	1,430,398		$	124,553
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Bank overdraft	$	347		$	7
Accounts payable and accrued liabilities		59,043			26,415
Accounts payable, related party		40,000			55,000
Interest payable, related party		21,354			19,545
Dividends payable		27,437			26,697
Related party payables		61,643			44,679
Related party notes payable		81,500			81,500
Derivative liability		25,458			20,328
Convertible notes payable		4,900			4,900
Total current liabilities		321,682			279,071
Notes payable, net of current portion		5,000			5,000
Other long term liability		841,702			-
Total liabilities		1,168,384			284,071
Stockholders' equity (deficit)
Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized; 0 and 25,000 issued and outstanding at March 31, 2018 and December 31, 2017		-			25,000
Series B convertible preferred stock, $1.00 par value; 500,000 shares authorized; 64,000 issued and outstanding		64,000			64,000
Common stock, $0.001 par value; 275,000,000 shares authorized; 22,568,577 and 21,572,871 issued; 18,753,577 and 17,757,871 outstanding at March 31, 2018 and December 31, 2017		22,569			21,573
Additional paid in capital		3,351,641			3,129,894
Other comprehensive income (loss)		(39,128	)		16
Treasury stock, 3,815,000 shares		(5,300	)		(5,300	)
Accumulated deficit		(3,383,786	)		(3,394,701	)
Total stockholders' equity (deficit)		9,996			(159,518	)
Non-controlling interest		252,018			-
Total equity (deficit)		262,014			(159,518	)
Total liabilities and stockholders' equity (deficit)	$	1,430,398		$	124,553

See accompanying notes to unaudited consolidated financial statements.

4

DLT RESOLUTION, INC
Consolidated Statements of Operations
(Unaudited)
	Three months ended March 31,
	2018			2017
Revenue	$	148,388		$	-
Cost of revenue		29,067			-
Gross margin		119,321			-
Operating expenses
General and administrative		72,021			468
Professional fees		16,375			2,022
Total operating expenses		88,396			2,490
Income (loss) from operations		30,925			(2,490	)
Other income (expense)
Other income		-			26,306
Loss on change in fair market value of derivative liability		(5,130	)		-
Interest expense		(1,929	)		(3,720	)
Total other income (expense)		(7,059	)		22,586
Income before income taxes		23,866			20,096
Income taxes		-			-
Net income	$	23,866		$	20,096
Income attributable to non-controlling interest		(12,211	)		-
Net income attributable to DLT Resolution, Inc.	$	11,655		$	20,096
Preferred stock dividends declared		(740	)		-
Net income attributable to common shareholders	$	10,915		$	20,096
Net income per basic share outstanding	$	0.00		$	0.00
Net income per diluted share outstanding	$	0.00		$	0.00
Weighted average basic shares outstanding		18,563,956			23,385,878
Weighted average diluted shares outstanding		19,053,956			23,385,878

See accompanying notes to unaudited consolidated financial statements.

5

DLT RESOLUTION, INC
Consolidated Statements of Comprehensive Loss
(Unaudited)
	Three months ended March 31,
	2018			2017
Net income	$	23,866		$	20,096
Other comprehensive loss
Foreign currency translation adjustment		(39,144	)		-
Total other comprehensive loss		(39,144	)		-
Comprehensive income (loss)	$	(15,278	)	$	20,096

 

See accompanying notes to unaudited consolidated financial statements.

 

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DLT RESOLUTION, INC
Consolidated Statements of Cash Flows
(Unaudited)
	Three months ended March 31,
	2018			2017
Cash flows from operating activities
Net income	$	23,866		$	20,096
Adjustments to reconcile net loss to net cash used in operating activities
Forgiveness of debt		-			(26,306	)
Depreciation and amortization expense		29,270			-
Loss on change in fair market value of derivative liability		5,130			-
Expenses paid on behalf of the company by related parties		-			468
Changes in operating assets and liabilities
Accounts receivable		(88,128	)		-
Interest payable, related party		1,809			-
Accounts payable and accrued liabilities		(15,457	)		5,742
Accounts payable, related party		(15,000	)		-
Net cash used in operating activities		(58,510	)		-
Net cash used in investing activities		-			-
Cash flows from financing activities
Proceeds from bank overdraft		347			-
Proceeds from related party payables		21,836			-
Repayments of related party advances		(4,731	)		-
Proceeds from the sale of common stock		77,500			-
Net cash provided by financing activities		94,952			-
Net change in cash		36,442			-
Effect of exchange rate on cash		915			-
Cash at beginning of period		8,609			-
Cash at end of period	$	45,966		$	-
Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Non-cash investing and financing activities
Preferred dividend declared	$	740		$	-
Other long term liability entered into for acquisition of A.J.D. Data Services	$	841,702		$	-
Common shares issued for acquisition of A.J.D. Data Services	$	120,243		$	-
Common shares issued in exchange for preferred shares	$	25,000		$	-
Forgiveness of related party convertible note payable	$	-		$	2,634
Forgiveness of related party interest payable	$	-		$	606
Forgiveness of convertible note payable	$	-		$	23,783
Forgiveness of note payable	$	-		$	600
Forgiveness of interest payable	$	-		$	1,923
Common shares issued in exchange for note payable principal	$	-		$	250,000
Purchase of intangible asset of account payable	$	-		$	40,000

See accompanying notes to unaudited consolidated financial statements.

7

DLT RESOLUTION, INC.

Notes to Unaudited Consolidated Financial Statements

March 31, 2018

Note 1 - Basis of Presentation

The accompanying unaudited interim consolidated financial statements of DLT Resolution, Inc. collectively referred to herein as (“DLT,” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements for the period ended December 31, 2017 and notes thereto contained in the Company’s Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2017 as reported in the form 10-K have been omitted.

During the three months ended March 31, 2018, the Company completed its acquisition of A.J.D. Data Services. See Note 9 – Acquisition of A.J.D. Data Services.

Note 2 - Going Concern

The Company had an accumulated deficit of $3,383,786 and a working capital deficit of $41,769 as of March 31, 2018 and had limited revenues. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Continuation of the Company’s existence depends upon its ability to obtain additional capital. Management’s plans in regards to this matter include raising additional equity financing and borrowing funds under a private credit facility and/or other credit sources. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 - Significant Accounting Policies

Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Income Taxes

The Company accounts for income taxes under the asset and liability method, where deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

At March 31, 2018, there were no uncertain tax positions that require accrual.

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company had accounts receivable of $233,947 and $0 and an allowance for doubtful accounts of $0 and $0 as of March 31, 2018 and December 31, 2017, respectively.

8

Revenue recognition

The Company follows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue upon the transfer of promised services to customers in amounts that reflect the consideration to which the Company expects to be entitled the transfer of services. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) collectability is reasonably assured. The Company primarily generates revenues through the sale of document imaging, telemarketing, data entry, document management and all other back-end information technology (“IT”) functions.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. The Company provides for depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations.

Intangible Assets

Intangible assets primarily consist of customer relationships, software, non-compete agreements and domain names The Company amortizes, to cost of revenue and operating expenses, definite‑lived intangible assets on a straight‑line basis over the life of the assets of five years.

Impairment of Long-Lived Assets and Goodwill

The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

The Company tests goodwill for impairment annually as of December 31, or whenever events or changes in circumstances indicate that goodwill may be impaired. The Company initially assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company compares the reporting unit’s carrying amount to its fair value. If the reporting unit’s carrying amount exceeds its fair value, an impairment charge is recorded based on that difference.

There was no impairment of long-lived assets or goodwill during the periods presented.

Convertible debt

The Company records beneficial conversion features related to the issuance of convertible debts that have conversion features at fixed or adjustable rates that are less than the Company’s stock prices on the respective issuance dates. The beneficial conversion features for the convertible instruments are recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instruments equal to the intrinsic value of the conversion features based on the difference between the effective conversion rates and the Company’s stock prices on the issuance dates. The beneficial conversion features are accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

9

Software Development Costs and Amortization

The Company capitalizes software development costs in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 985-20 (previously Statement of Financial Accounting Standards (“SFAS”) No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed”). Software development costs are capitalized after technological feasibility is established. Once the software products become available for general release to the public, the Company amortizes such costs over the related product’s estimated economic useful life to general and administrative expenses. Net capitalized software development costs (included in intangible assets) totaled $119,000 (acquired via issuance of $64,000 of Series B Preferred Stock and $55,000 in accounts payable) at March 31, 2018 and December 31, 2017, respectively. Related amortization expense, included in general and administrative expenses, totaled $9,917 and $0 for the three months ended March 31, 2018 and 2017, respectively.

Net Income (Loss) Per Share

Basic loss per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. As of March 31, 2018, there was a convertible note outstanding that could convert to a total of 490,000 common shares and 3,675,000 common shares committed for issuance as part of the acquisition of A.J.D. Data Services (see Note 12 – Acquisition of A.J.D. Data Services) which is included in diluted common shares outstanding for the three months ended March 31, 2018. There were no potentially dilutive instruments outstanding at March 31, 2017.

Derivative Liabilities

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair market values of derivative liabilities over the life of the convertible notes.

Principals of Consolidation

The consolidated financial statements represent the results of DLT Resolution, Inc., its wholly owned subsidiary, DLT Resolution Corp. and its 80% owned subsidiary A.J.D. Data Services (see Note 9 – Acquisition of A.J.D. Data Services). All intercompany transactions and balances have been eliminated.

Foreign Currency Translation

The functional currency of the Company’s subsidiaries in Canada is the Canadian Dollar. The subsidiaries’ assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the annual average exchange rate for each period. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in other income (expense). There was not foreign currency transaction gains or losses recognized during the periods presented.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

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Note 4 - Related Party Transactions

No salaries were paid to directors or executives during the periods ended March 31, 2018 or 2017.

During the three months ended March 31, 2018, the Company received advances from related parties totaling $21,836 to fund operations and made repayments on outstanding related party payables of $4,731. The advances are unsecured and due on demand. There was $61,643 and $44,679 due to related parties as of March 31, 2018 and December 31, 2017, respectively.

See Note 6 for Related Party Notes Payable. 

Note 5 - Stockholders’ Equity

Series A Convertible Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock can be converted to common shares at the option of the holder at a rate equal to $0.10 per share.

During the three months ended March 31, 2018, the Company accepted the conversion of 25,000 shares of Series A Convertible Preferred Stock in exchange for 25,000 shares of common stock.

There were 0 and 25,000 shares of series A convertible preferred stock issued and outstanding as of March 31, 2018 and December 31, 2017, respectively. Additionally, the Company had accrued dividends payable on series A convertible preferred stock totaling $27,437 and $26,697 at March 31, 2018 and December 31, 2017, respectively.

Common Stock

The authorized common stock of the Company consists of 275,000,000 shares and carries a par value of $0.001. During the year ended December 31, 2014, the Company bought back 380,000 post-split shares of common stock into treasury from a former officer for $100. The shares are being carried as treasury shares as reflected on the balance sheet.

During the year ended December 31, 2017, the Company issued a $5,000 note payable and $200 related party payable for a total of 3,777,000 outstanding common shares which are carried as treasury stock. There were 3,815,000 common shares held as treasury stock as of March 31, 2018 and December 31, 2017, respectively.

During the three months ended March 31, 2018, the Company issued 381,818 common shares for cash proceeds of $77,500; 525,000 common shares valued at $120,243 for the acquisition of A.J.D. Data Services; 25,000 common shares for the conversion of 25,000 shares of Series A Convertible Preferred Stock and 63,888 common shares for rounding differences from the effect of a reverse stock split effected during the year ended December 31, 2017.

There were 22,568,577 and 21,572,871 common shares issued and 18,753,577 and 17,757,871 outstanding at March 31, 2018 and December 31, 2017, respectively.

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Note 6 - Related Party Notes Payable

During the year ended December 31, 2015, the Company entered into a note payable with a related party as a settlement for payment of consulting services provided valued at $350,000. The note carries interest of 9% compounded annually and was due on November 19, 2016. During the year ended December 31, 2016, the Company issued 50,000 shares of series A convertible preferred stock as repayment of $31,500 of accrued interest and $18,500 of outstanding principal. Additionally, on January 31, 2017, the Company issued 1,250,000 shares of common stock as repayment of $250,000 of principal. There was $81,500 and $81,500 of principal and $21,354 and $19,545 of accrued interest due as of March 31, 2018 and December 31, 2017. Accrued interest payable is included in “interest payable, related party” on the balance sheet.

On August 1, 2017, the Company entered into a note payable with an unrelated party to purchase common stock held by the unrelated party. The note is due on July 1, 2019 and bears no interest. There was $5,000 and $5,000 due as of March 31, 2018 and December 31, 2017.

Future maturities of notes payable are:

Year ended December 31,
2018	$	81,500
2019		5,000
Total	$	86,500

Note 7 - Convertible Notes Payable

On May 22, 2017, the Company entered into a convertible note payable with an unrelated party for $4,900 which was paid to a vendor on the Company’s behalf. The note carries interest at 10% per annum, is due on demand and is convertible at the option of the holder into common stock of the Company at a rate equal to the lesser of a 50% discount from the last trade price of the stock or $0.01 per share. There was $4,900 and $4,900 of principal and $3,169 and $3,048 of accrued interest due as of March 31, 2018 and December 31, 2017, respectively, which is included in “accounts payable and accrued liabilities” on the balance sheet. See Note 8 for explanation of related derivative liability derived from variable conversion rate. This note was repaid in full in May 2018 (Note 10).

Note 8 - Derivative Liability

As of March 31, 2018 and December 31, 2017, Company had a derivative liability balance of $25,458 and $20,328 on the balance sheets and recorded a loss of $5,130 and $0 from derivative liability fair value adjustments during the three months ended March 31, 2018 and 2017. The derivative liability activity comes from convertible notes payable as follows:

As discussed in Note 7 – Convertible Notes Payable, on May 22, 2017 the Company issued a $4,900 Convertible Promissory Note to an unrelated party that is due on demand. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares 90 days after issuance, at the holder’s option, at the conversion rate equal to the lesser of a 50% discount from the last trade prior to conversion or $0.01. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to a variable conversion rate. In accordance with ASC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

12

The embedded derivative for the note is carried on the Company’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair values the embedded derivative using the Black-Scholes option pricing model. The aggregate fair value of the derivative at the issuance date of the note was $5,348 which was recorded as a derivative liability on the balance sheet. The Company recorded a debt discount of $4,900 which was equal to the face value of the convertible note, and immediately expensed $448. Although the note is due on demand, upon issuance the Company estimated a six-month repayment period, over which they amortized the debt discount in full. As such, the Company recorded $4,900 in amortization expense during the year ended December 31, 2017.

At March 31, 2018, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $25,458 and recorded a $5,130 loss from change in fair value for the three months ended March 31, 2018. The fair value of the embedded derivatives for the notes was determined using a Black Scholes valuation model based on the following assumptions: (1) expected volatility of 387%, (2) risk-free interest rate of 1.93%, and (3) expected life of 0.50 of a year.

The following table summarizes the derivative liabilities included in the balance sheet at March 31, 2018:

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$	20,328
Change in fair market value		5,130
Balance, March 31, 2018	$	25,458

Note 9 – Acquisition of A.J.D. Data Services

On January 21, 2018, the Company entered into and closed the transactions contemplated by the definitive stock purchase agreement and plan of re-organization by and among the Company, A.J.D. Data Services Ltd., a limited liability company organized under the laws of Ontario (“A.J.D.”), the stockholders of A.J.D. and other parties signatory thereto to acquire 80 shares, representing 80% of the issued and outstanding capital stock of A.J.D. for 525,000 restricted common shares of the Company. A.J.D. is focused on document imaging, telemarketing, data entry, document management and all other back-end functions. The acquisition is intended to be part of a tax free share for share exchange which will see DLT Resolution issuing restricted common shares on closing and an additional 3,675,000 restricted common shares upon meeting the following milestones:

· 1,050,000 Shares upon A.J.D Data Services reaching $500,000 in gross sales

· 1,050,000 Shares upon A.J.D Data Services reaching $1,000,000 in cumulated gross sales

· 525,000 Shares upon A.J.D Data Services reaching $1,500,000 in cumulated gross sales with $100,000 in pre-tax earnings

· 525,000 Shares upon A.J.D Data Services reaching $2,000,000 in cumulated gross sales with $150,000 in pre-tax earnings

· 525,000 Shares upon A.J.D Data Services reaching $2,500,000 in cumulated gross sales with $200,000 in pre-tax earnings

13

The Company applied the acquisition method to the business combination and valued each of the assets acquired (cash, accounts receivable, equipment, customer relationships, software, domain names and non-compete agreements) and liabilities assumed (accounts payable and related party payable) at fair value as of the acquisition date. The cash, accounts receivable, accounts payable and related party payable were deemed to be recorded at fair value as of the acquisition date. The Company determined the fair value of the equipment to be historical net book value. The preliminary allocation of the purchase price was based on estimates of the fair value of the assets and liabilities assumed based on provisional amounts. The allocation of the excess purchase price is not final and the amounts allocated to intangible assets are subject to change pending the completion of final valuations of certain assets and liabilities. Under the purchase agreement, the Company issued 525,000 shares of common stock valued at $120,243 and committed to issue an additional 3,675,000 shares of common stock at certain milestones which was determined to have a fair value of $841,702 in exchange for a 80% interest. The estimated fair value of the common stock to be issued of $841,702 is shown as an “other long term liability” on the face of the balance sheet. The following table shows the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

ASSETS ACQUIRED
Cash	$	302
Accounts receivable		152,489
Equipment		22,743
Customer relationships		207,364
Software		156,924
Non-compete agreement		173,738
Domain name		6,405
Goodwill		531,484
TOTAL ASSETS ACQUIRED	$	1,251,449
LIABILITIES ASSUMED
Accounts payable		49,380
Related party payable		317
TOTAL LIABILITIES ASSUMED		49,697
Non-controlling interest		(239,807	)
NET ASSETS ACQUIRED	$	961,945

The intangible assets acquired will be amortized over 5 years.

The non-controlling interest was valued using an enterprise value approach whereby the total value of all net assets of A.J.D. were valued with the non-controlling interest representing the minority interest percentage of the net assets as of the date of acquisition. The non-controlling interest was determined to have a fair value of $239,807 as of the date of acquisition.

From the period of acquisition on January 21, 2018 to March 31, 2018, A.J.D. generated total revenues of $143,919.

Note 10 – Concentrations of Revenue

During the three months ended March 31, 2018, five separate customers accounted for 91% of the Company’s total revenue. There was no revenue during the three months ended March 31, 2017.

Note 11 – Subsequent Events

On April 13, 2018, the Company accepted a common stock subscription for 37,037 shares of common stock at $0.27 cash per share resulting in a total subscription of $10,000 which was received in full.

On May 11, 2018, the Company accepted a common stock subscription for 200,000 shares of common stock at $0.33 cash per share resulting in a total subscription of $66,000. Of this amount, $25,000 has been received with the remaining $41,000 as a subscription receivable.

On May 21, 2018, the Company made convertible note repayments to repay the total outstanding principal and accrued interest on its outstanding convertible notes payable as discussed in Note 7 – Convertible Notes Payable.

Acquisition of Operating Assets

On April 12, 2018, the Company entered into and closed the transactions contemplated by the definitive asset purchase agreement and plan of re-organization (the “ Asset Purchase Agreement ”) by and among the Company, 1922861 Ontario Inc. a corporation organized under the laws of Ontario (“ 1922861 Ontario Inc. ”), the stockholders of 1922861 Ontario Inc. (“ Stockholders ”) and other parties signatory thereto to acquire all the operating assets of 1922861 Ontario Inc. for 500,000 restricted common shares of DLT Resolution and a payment of CAD $19,200 to 1922861 Ontario’s supplier. The acquisition will integrate the operating assets of this purchase into the Company’s Canadian subsidiary DLT Resolution Corp, a corporation formed under the Laws of the Province of Ontario.

In addition to the consideration on closing an additional 1,000,000 restricted common shares may potentially be issued upon meeting the following milestones:

· An additional 500,000 shares will be issued upon the acquired base generating CAD $35,000 in monthly sales for DLT Resolution for 3 consecutive months with a 10% pre-tax profit.

· And an additional 500,000 shares will be issued upon the acquired base generating CAD $500,000 in cumulated gross sales with a 10% pre-tax profit.

The Company has allotted 24 months to achieve these milestones. There is full acceleration to allow for full vesting as quickly as the cumulative sales milestones are reached. Share issuances will be issued under reliance of appropriate exemptions from registration with the Securities & Exchange Commission and will contain substantial resale restrictions.

14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation. Shareholders’ Equity

General

DLT Resolution Inc. (“The Company”) was incorporated on January 17, 2007, under the laws of the State of Nevada. The principal offices are located at 5940 S. Rainbow Blvd, Ste 400-32132, Las Vegas, NV 89118. The telephone number is 1 (702) 796-6363. The Company has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings. Our fiscal year end is December 31.

Description of Business

DLT is a Distributed Ledger Technology “Blockchain” Information Technology company. Additionally, the Company formed a wholly owned Canadian subsidiary to carry on business in Canada effective November 23, 2017 and acquired A.J.D. Data Services on January 21, 2018. The Company offers secure data management, Information Technology (IT) and other telecommunications services in Canada and the United States. Through its RecordsBank.org portal it operates a Health Information Exchange. DLT is creating a single unified platform enabling the ability to request and retrieve medical information and records while meeting all of today’s Security & Compliance demands for HIPAA, PIPEDA and PHIPA. The Company is preparing to launch a Distributed Ledger Technology “Blockchain” version of the service placing electronic health records on this secure platform. The Company expects to launch this initiative during the third calendar quarter of 2018.

DLT operates in Canada through its wholly owned subsidiary DLT Resolution Corp. and its majority owned subsidiary A.J.D. Data Services Ltd.

Research and Development Expenditures

Since the time of our incorporation we have not incurred any research expenses.

In 2017 the Company incurred costs of $55,000 in its development efforts of its online Health Information Exchange portal which was launched live in late 2017. The Company has also incurred an additional $64,000 in development expenses on utilizing a Distributed Ledger Technology “Blockchain” solution for placing health information on this platform during the fourth quarter of 2017. Management anticipates further research and development expenses in the upcoming 2018 year.

Business Strategy

DLT Resolution’s strategy is to provide secure data management to organizations large and small across Canada and the USA. Included with data management are telecom and other IT solutions to assist organizations with offloading burdensome back office services and thus helping clients achieve operational efficiency.

Through the deployment of the Company’s Distributed Ledger Technology “Blockchain” solution, DLT aims to leverage our offerings adding benefits previously unattainable in the marketplace.

Distributed Ledger Technology “Blockchain”

Our Distributed Ledger Technology “Blockchain” permits trust to be intrinsically embedded into a technological solution, enabling smooth partnerships and transactions dramatically reducing friction between stakeholders. Our solutions focus primarily within the Health Information Exchange and Telecommunications space.

15

Workflow Automation

Distributed Ledger Technology “Blockchain” enabled trust improves coordination between various partners, due to a shared view of transactions and liabilities. This in turn permits the elimination of third parties, resulting in cost savings

Audit Trail

Facilitates a single view of data instead of the need for consolidation across various disparate systems. Resulting in reliable audit trails due to the history of all transactions being available in the ledger.

Data Privacy

Provable privacy protects clients’ data from being visible to unauthorized parties in compliance with all of today's HIPPA requirements

Revenue Assurance

Implementation of smart contracts allows for near-instantaneous charging, thus leading to improved revenue assurance and fraud reduction.

Health Information Exchange

DLT Resolution has developed and recently launched RecordsBank.org, a Centralized System for Patients, Lawyers & Insurers to retrieve and access Medical Records. The centralized system and portal is a cloud-based PIPEDA & HIPAA compliant network of Providers and Record Requestors. Utilizing a secure platform, providers will be able to securely exchange records electronically with third-party requestors. Health care providers with proper authorization can also share records with each other. The system works on a fee per record basis with future plans of licensing medical data, stripped of identifiers for medical research.

Addressing a $7 Billion a Year Problem

In national terms, across the U.S., hospitals spend more than $7 billion annually on customer intake. More than $7 billion, before any sort of medical procedure is done; before a patient even steps out of a waiting room, representing an incredible amount of time and money spent on intake administration.

Despite the adoption of electronic health records (EHR) and health information exchanges (HIE), providers are still mailing and faxing paper records because they have no PIPEDA or HIPAA compliant method to exchange records electronically with these third-party requestors. Based on our research, the Company estimates the current method of exchanging patient health information may cost a single clinician practice approximately $17,000 per year.

The Company aims to remove these substantial burdens both on an administrative and financial basis. People or firms simply use our secure online request form, pay a small service fee and the Company retrieves, digitizes and stores the records. At this point the requesting client can access the record globally 24 hours a day - 7 days a week to view it or transfer it securely. In fact clients can upload any new records to consolidate and keep all of their records securely in one place.

16

Results of Operations

Revenues

Revenues during the three months ended March 31, 2018 and 2017 were $148,388 and $0. Additionally, cost of revenues during the three months ended March 31, 2018 and 2017 were $29,067 and $0. The increase in revenue and cost of revenue is the result of the Company’s acquisition of A.J.D. Data Services as all revenues and costs of revenues were generated by that entity.

Operating Expenses

Total operating expenses were $88,396 and $2,490 during the three months ended March 31, 2018 and 2017. The increase in operating expenses relates to the Company incurring additional general office expenses during the current period as it executed its business plan and acquired A.J.D. Data Services, whereas the Company was stagnant in the prior period.

Other Income (Loss)

The Company had net other expenses of $7,059 during the three months ended March 31, 2018 compared to net other income of $22,586 during the three months ended March 31, 2017. The decrease in net other income is the result of a one-time recognition of a gain on the forgiveness of debt totaling $26,306 that occurred during the three months ended March 31, 2017 that was not present in the current period.

Net Income

The Company had net income of $23,866 during the three months ended March 31, 2018 compared to $20,096 during the three months ended March 31, 2017. While there is not a significant year over year change in total net income, net income in the current year was generated from the execution of the Company’s business plan and net income in the prior period was generated from a one-time debt forgiveness recognition as previously discussed.

Liquidity and Capital Resources

As of March 31, 2018 we had $45,966 of cash, total current assets of $279,913 and current liabilities of $321,682 creating a working capital deficit of $41,769. Current assets consisted of cash of $45,966 and accounts receivable totaling $233,947. Current liabilities as of March 31, 2018 consisted of $347 of bank overdrafts, $59,043 of accounts payable and accrued liabilities, $40,000 of accounts payable to related parties, $21,354 of interest payable to related parties, $61,643 of related party payables, $27,437 of dividends payable, notes payable of $81,500, a derivative liability of $25,458 and convertible notes payable on which debt discounts are fully amortized of $4,900.

As of December 31, 2017 we had $8,609 of cash, total current assets of $8,609 and current liabilities of $279,071 creating a working capital deficit of $270,462. Current assets consisted of cash of $8,609. Current liabilities as of December 31, 2017 consisted of $7 of bank overdrafts, $26,415 of accounts payable and accrued liabilities, $55,000 of accounts payable to related parties, $19,545 of interest payable to related parties, $44,679 of related party payables, $26,697 of dividends payable, notes payable of $81,500, a derivative liability of $20,328 and convertible notes payable on which debt discounts are fully amortized of $4,900.

17

Cash Used in Operating Activities

Net cash used in operating activities was $58,510 during the three months ended March 31, 2018 compared to $0 for the same period in 2017. The increase in cash used in operating activities is from an increase in the change in working capital during the three months ended March 31, 2018 when compared to the nine months ended March 31, 2017.

Cash from Financing Activities

During the three months ended March 31, 2018, the Company generated $94,952 of cash from financing activities. Cash generated from financing activities was mostly comprised of $77,500 of total cash proceeds from the sale of common stock and advances from net of repayments to related parties totaling $17,105.

Going Concern

As of March 31, 2018, the Company has a working capital deficit of $41,769 and used $58,510 of cash in operations during the three months ended March 31, 2018 which raises substantial doubt for the entity to be able to continue as a going concern.

Future Financing

We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Lawsuits

To management’s knowledge there is no pending, or threatened lawsuit against the Company

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information required by this item.

18

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer (as our chief executive officer and chief financial officer), to allow timely decisions regarding required disclosures. 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, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As of the end of the period covered by this report, and under the supervision and with the participation of management, including our Chief Executive Officer, who is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, conducted an evaluation of the effectiveness of the design and operation of these disclosure controls and procedures. Based on this evaluation and subject to the foregoing, our Chief Executive Officer concluded that these controls are not effective considering the level and nature of the Company’s operations and the number and types of transactions concluded by the Company.

Changes in Internal Control Over Financial Reporting

During the period covered by this report management of the Company was expanded to include more than one individual. As such, there were significant changes in our internal controls during the period. For example, for the time being and until the operations of the company make this impractical all financial transactions involving the Company, including all payments and all agreed upon incurrences of liabilities, require a signature from, or other approval from, the CEO or CFO of DLT Resolution, Inc. Notwithstanding these changes, as the company was previously a shell company owned and managed by one person, management has no reason to believe that the internal controls in place at that time were insufficient. Furthermore, management believes that until the operations of the Company progress to the point where tight control impedes smooth operations, it will be appropriate and sufficient (from the perspective of internal controls over financial reporting) if approval of the CEO and CFO is required for transactions that are or are reasonably likely to require disclosure in the financial statements.

19

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not presently a party to any legal proceedings and, to our knowledge, no such proceedings are threatened or pending.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2018, the Company issued 381,818 common shares for cash proceeds of $77,500; 525,000 common shares valued at $120,243 for the acquisition of A.J.D. Data Services; 25,000 common shares for the conversion of 25,000 shares of Series A Convertible Preferred Stock and 63,888 common shares for rounding differences from the effect of a reverse stock split effected during the year ended December 31, 2017.

Description of Registrant’s Securities to be Registered

The authorized capital stock of our Company consists of 275,000,000 shares of common stock, par value $0.001 per share, of which there are currently 22,568,577 issued and 18,753,577 outstanding, and 5,000,000 shares of series A convertible preferred stock authorized of which there are 0 shares issued and outstanding.

All outstanding shares of common stock are of the same class and have equal rights and attributes. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from time to time by the sole director out of funds legally available. In the event of liquidation, the holders of common stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative or preemptive rights.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None

Item 5. Other Information.

None.

Item 6. Exhibits.

The following exhibits are attached hereto:

Exhibit No.	Description of Exhibit
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended, filed herewith.
31.2	Certification of Principal Accounting Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended, filed herewith.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
101	Interactive data files pursuant to Rule 405 of Regulation S-T.

20

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  

DLT Resolution, Inc.
By:	/s/ John Wilkes	By:	/s/ John Wilkes
	John Wilkes		John Wilkes
	President and Chief Executive Officer		Chief Financial Officer, Secretary and Treasurer
	(Principal Executive Officer)		(Principal Financial Officer)
	May 21, 2018		May 21, 2018

21

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, John Wilkes, Chief Executive Officer, certify that:

(1)	I have reviewed this report on Form 10-Q for the quarterly period ended March 31, 2018 of DLT Resolution, 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 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 the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2018

By:	/s/ John Wilkes
	John Wilkes
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, John Wilkes, Chief Financial Officer, certify that:

(1)	I have reviewed this report on Form 10-Q for the quarterly period ended March 31, 2018 of DLT Resolution, 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 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 the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 21, 2018

By:	/s/ John Wilkes
	John Wilkes
	Chief Financial Officer, Secretary and Treasurer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned, John Wilkes, the Chief Executive Officer of DLT Resolution, Inc hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the report on Form 10-Q of DLT Resolution, Inc, for the quarterly period ended March 31, 2018, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of DLT Resolution, Inc.

Date: May 21, 2018

By:	/s/ John Wilkes
	John Wilkes
	President and Chief Executive Officer
	(Principal Executive Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 21, 2018
Document And Entity Information
Entity Registrant Name	DLT Resolution Inc.
Entity Central Index Key	0001420368
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	Yes
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		18,753,577
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets
Cash	$ 45,966	$ 8,609
Accounts receivable	233,947
Total current assets	279,913	8,609
Equipment, net of accumulated depreciation	20,617
Intangible assets, net of accumulated amortization	615,431	115,944
Goodwill	514,437
Total assets	1,430,398	124,553
Current liabilities
Bank overdraft	347	7
Accounts payable and accrued liabilities	59,043	26,415
Accounts payable, related party	40,000	55,000
Interest payable, related party	21,354	19,545
Dividends payable	27,437	26,697
Related party payables	61,643	44,679
Related party notes payable	81,500	81,500
Derivative liability	25,458	20,328
Convertible notes payable	4,900	4,900
Total current liabilities	321,682	279,071
Notes payable, net of current portion	5,000	5,000
Other long term liability	841,702
Total liabilities	1,168,384	284,071
Stockholders' equity (deficit)
Common stock, $0.001 par value; 275,000,000 shares authorized; 22,568,577 and 21,572,871 issued; 18,753,577 and 17,757,871 outstanding at March 31, 2018 and December 31, 2017	22,569	21,573
Additional paid in capital	3,351,641	3,129,894
Other comprehensive income (loss)	(39,128)	16
Treasury stock, 3,815,000 shares	(5,300)	(5,300)
Accumulated deficit	(3,383,786)	(3,394,701)
Total stockholders' equity (deficit)	9,996	(159,518)
Non-controlling interest	252,018
Total equity (deficit)	262,014	(159,518)
Total liabilities and stockholders' equity (deficit)	1,430,398	124,553
Series A Convertible Preferred Stock
Stockholders' equity (deficit)
Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized; 0 and 25,000 issued and outstanding at March 31, 2018 and December 31, 2017		25,000
Series B Convertible Preferred Stock [Member]
Stockholders' equity (deficit)
Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized; 0 and 25,000 issued and outstanding at March 31, 2018 and December 31, 2017	$ 64,000	$ 64,000

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Stockholders' deficit
Common stock; par value	$ 0.001	$ 0.001
Common stock; shares authorized	275,000,000	275,000,000
Common stock; shares issued	22,568,577	21,572,871
Common stock; shares outstanding	18,753,577	17,757,871
Treasury stock shares	3,815,000	3,815,000
Series A Convertible Preferred Stock
Stockholders' deficit
Preferred stock; par value	$ 1.00	$ 1.00
Preferred stock; shares authorized	5,000,000	5,000,000
Preferred stock; shares issued	0	25,000
Preferred stock; shares outstanding	0	25,000
Common stock; par value	$ 0.10
Common stock; shares authorized	5,000,000
Series B Convertible Preferred Stock [Member]
Stockholders' deficit
Preferred stock; par value	$ 1.00	$ 1.00
Preferred stock; shares authorized	500,000	500,000
Preferred stock; shares issued	64,000	64,000
Preferred stock; shares outstanding	64,000	64,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Consolidated Statements Of Operations
Revenue	$ 148,388
Cost of revenue	29,067
Gross margin	119,321
Operating expenses
General and administrative	72,021	468
Professional fees	16,375	2,022
Total operating expenses	88,396	2,490
Income (loss) from operations	30,925	(2,490)
Other income (expense)
Other income		26,306
Loss on change in fair market value of derivative liability	(5,130)
Interest expense	(1,929)	(3,720)
Total other income (expense)	(7,059)	22,586
Income before income taxes	23,866	20,096
Income taxes
Net income	23,866	20,096
Income attributable to non-controlling interest	(12,211)
Net income attributable to DLT Resolution, Inc.	11,655	20,096
Preferred stock dividends declared	(740)
Net income attributable to common shareholders	$ 10,915	$ 20,096
Net income per basic share outstanding	$ 0.00	$ 0.00
Net income per diluted share outstanding	$ 0.00	$ 0.00
Weighted average basic shares outstanding	18,563,956	23,385,878
Weighted average diluted shares outstanding	19,053,956	23,385,878

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Consolidated Statements Of Comprehensive Loss
Net income	$ 23,866	$ 20,096
Other comprehensive loss
Foreign currency translation adjustment	(39,144)
Total other comprehensive loss	(39,144)
Comprehensive income (loss)	$ (15,278)	$ 20,096

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities
Net income	$ 23,866	$ 20,096
Adjustments to reconcile net loss to net cash used in operating activities
Forgiveness of debt		(26,306)
Depreciation and amortization expense	29,270
Loss on change in fair market value of derivative liability	5,130
Expenses paid on behalf of the company by related parties		468
Changes in operating assets and liabilities
Accounts receivable	(88,128)
Interest payable, related party	1,809
Accounts payable and accrued liabilities	(15,457)	5,742
Accounts payable, related party	(15,000)
Net cash used in operating activities	(58,510)
Net cash used in investing activities
Cash flows from financing activities
Proceeds from bank overdraft	347
Proceeds from related party payables	21,836
Repayments of related party advances	(4,731)
Proceeds from the sale of common stock	77,500
Net cash provided by financing activities	94,952
Net change in cash	36,442
Effect of exchange rate on cash	915
Cash at beginning of period	8,609
Cash at end of period	45,966
Supplemental cash flow information
Cash paid for interest
Cash paid for income taxes
Non-cash investing and financing activities
Preferred dividend declared	740
Other long term liability entered into for acquisition of A.J.D. Data Services	841,702
Common shares issued for acquisition of A.J.D. Data Services	120,243
Common shares issued in exchange for preferred shares	25,000
Forgiveness of related party convertible note payable		2,634
Forgiveness of related party interest payable		606
Forgiveness of convertible note payable		23,783
Forgiveness of note payable		600
Forgiveness of interest payable		1,923
Common shares issued in exchange for note payable principal		250,000
Purchase of intangible asset of account payable		$ 40,000

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Nature of Business

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 1 - Nature of Business

The accompanying unaudited interim consolidated financial statements of DLT Resolution, Inc. collectively referred to herein as (“DLT,” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements for the period ended December 31, 2017 and notes thereto contained in the Company’s Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2017 as reported in the form 10-K have been omitted.

During the three months ended March 31, 2018, the Company completed its acquisition of A.J.D. Data Services. See Note 9 – Acquisition of A.J.D. Data Services.

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Going Concern

12 Months Ended

Dec. 31, 2016

Going Concern

Note 2 - Going Concern

The Company had an accumulated deficit of $3,383,786 and a working capital deficit of $41,769 as of March 31, 2018 and had limited revenues. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Continuation of the Company’s existence depends upon its ability to obtain additional capital. Management’s plans in regards to this matter include raising additional equity financing and borrowing funds under a private credit facility and/or other credit sources. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 3 - Significant Accounting Policies

Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Income Taxes

The Company accounts for income taxes under the asset and liability method, where deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

At March 31, 2018, there were no uncertain tax positions that require accrual.

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company had accounts receivable of $233,947 and $0 and an allowance for doubtful accounts of $0 and $0 as of March 31, 2018 and December 31, 2017, respectively.

Revenue recognition

The Company follows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue upon the transfer of promised services to customers in amounts that reflect the consideration to which the Company expects to be entitled the transfer of services. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) collectability is reasonably assured. The Company primarily generates revenues through the sale of document imaging, telemarketing, data entry, document management and all other back-end information technology (“IT”) functions.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. The Company provides for depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations.

Intangible Assets

Intangible assets primarily consist of customer relationships, software, non-compete agreements and domain names The Company amortizes, to cost of revenue and operating expenses, definite-lived intangible assets on a straight-line basis over the life of the assets of five years.

Impairment of Long-Lived Assets and Goodwill

The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

The Company tests goodwill for impairment annually as of December 31, or whenever events or changes in circumstances indicate that goodwill may be impaired. The Company initially assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company compares the reporting unit’s carrying amount to its fair value. If the reporting unit’s carrying amount exceeds its fair value, an impairment charge is recorded based on that difference.

There was no impairment of long-lived assets or goodwill during the periods presented.

Convertible debt

The Company records beneficial conversion features related to the issuance of convertible debts that have conversion features at fixed or adjustable rates that are less than the Company’s stock prices on the respective issuance dates. The beneficial conversion features for the convertible instruments are recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instruments equal to the intrinsic value of the conversion features based on the difference between the effective conversion rates and the Company’s stock prices on the issuance dates. The beneficial conversion features are accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

Software Development Costs and Amortization

The Company capitalizes software development costs in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 985-20 (previously Statement of Financial Accounting Standards (“SFAS”) No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed”). Software development costs are capitalized after technological feasibility is established. Once the software products become available for general release to the public, the Company amortizes such costs over the related product’s estimated economic useful life to general and administrative expenses. Net capitalized software development costs (included in intangible assets) totaled $119,000 (acquired via issuance of $64,000 of Series B Preferred Stock and $55,000 in accounts payable) at March 31, 2018 and December 31, 2017, respectively. Related amortization expense, included in general and administrative expenses, totaled $9,917 and $0 for the three months ended March 31, 2018 and 2017, respectively.

Net Income (Loss) Per Share

Basic loss per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. As of March 31, 2018, there was a convertible note outstanding that could convert to a total of 490,000 common shares and 3,675,000 common shares committed for issuance as part of the acquisition of A.J.D. Data Services (see Note 12 – Acquisition of A.J.D. Data Services) which is included in diluted common shares outstanding for the three months ended March 31, 2018. There were no potentially dilutive instruments outstanding at March 31, 2017.

Derivative Liabilities

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair market values of derivative liabilities over the life of the convertible notes.

Principals of Consolidation

The consolidated financial statements represent the results of DLT Resolution, Inc., its wholly owned subsidiary, DLT Resolution Corp. and its 80% owned subsidiary A.J.D. Data Services (see Note 9 – Acquisition of A.J.D. Data Services). All intercompany transactions and balances have been eliminated.

Foreign Currency Translation

The functional currency of the Company’s subsidiaries in Canada is the Canadian Dollar. The subsidiaries’ assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the annual average exchange rate for each period. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in other income (expense). There was not foreign currency transaction gains or losses recognized during the periods presented.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

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Related Party Transactions

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 4 - Related Party Transactions

No salaries were paid to directors or executives during the periods ended March 31, 2018 or 2017.

During the three months ended March 31, 2018, the Company received advances from related parties totaling $21,836 to fund operations and made repayments on outstanding related party payables of $4,731. The advances are unsecured and due on demand. There was $61,643 and $44,679 due to related parties as of March 31, 2018 and December 31, 2017, respectively.

See Note 6 for Related Party Notes Payable. 

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Stockholders' Equity

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 5 - Stockholders' Equity

Series A Convertible Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock can be converted to common shares at the option of the holder at a rate equal to $0.10 per share.

During the three months ended March 31, 2018, the Company accepted the conversion of 25,000 shares of Series A Convertible Preferred Stock in exchange for 25,000 shares of common stock.

There were 0 and 25,000 shares of series A convertible preferred stock issued and outstanding as of March 31, 2018 and December 31, 2017, respectively. Additionally, the Company had accrued dividends payable on series A convertible preferred stock totaling $27,437 and $26,697 at March 31, 2018 and December 31, 2017, respectively.

Common Stock

The authorized common stock of the Company consists of 275,000,000 shares and carries a par value of $0.001. During the year ended December 31, 2014, the Company bought back 380,000 post-split shares of common stock into treasury from a former officer for $100. The shares are being carried as treasury shares as reflected on the balance sheet.

During the year ended December 31, 2017, the Company issued a $5,000 note payable and $200 related party payable for a total of 3,777,000 outstanding common shares which are carried as treasury stock. There were 3,815,000 common shares held as treasury stock as of March 31, 2018 and December 31, 2017, respectively.

During the three months ended March 31, 2018, the Company issued 381,818 common shares for cash proceeds of $77,500; 525,000 common shares valued at $120,243 for the acquisition of A.J.D. Data Services; 25,000 common shares for the conversion of 25,000 shares of Series A Convertible Preferred Stock and 63,888 common shares for rounding differences from the effect of a reverse stock split effected during the year ended December 31, 2017.

There were 22,568,577 and 21,572,871 common shares issued and 18,753,577 and 17,757,871 outstanding at March 31, 2018 and December 31, 2017, respectively.

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Related Party Notes Payable

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 6 - Related Party Notes Payable

During the year ended December 31, 2015, the Company entered into a note payable with a related party as a settlement for payment of consulting services provided valued at $350,000. The note carries interest of 9% compounded annually and was due on November 19, 2016. During the year ended December 31, 2016, the Company issued 50,000 shares of series A convertible preferred stock as repayment of $31,500 of accrued interest and $18,500 of outstanding principal. Additionally, on January 31, 2017, the Company issued 1,250,000 shares of common stock as repayment of $250,000 of principal. There was $81,500 and $81,500 of principal and $21,354 and $19,545 of accrued interest due as of March 31, 2018 and December 31, 2017. Accrued interest payable is included in “interest payable, related party” on the balance sheet.

On August 1, 2017, the Company entered into a note payable with an unrelated party to purchase common stock held by the unrelated party. The note is due on July 1, 2019 and bears no interest. There was $5,000 and $5,000 due as of March 31, 2018 and December 31, 2017.

Future maturities of notes payable are:

Year ended December 31,
2018	$	81,500
2019		5,000
Total	$	86,500

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Convertible Notes Payable

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 7 - Convertible Notes Payable

On May 22, 2017, the Company entered into a convertible note payable with an unrelated party for $4,900 which was paid to a vendor on the Company’s behalf. The note carries interest at 10% per annum, is due on demand and is convertible at the option of the holder into common stock of the Company at a rate equal to the lesser of a 50% discount from the last trade price of the stock or $0.01 per share. There was $4,900 and $4,900 of principal and $3,169 and $3,048 of accrued interest due as of March 31, 2018 and December 31, 2017, respectively, which is included in “accounts payable and accrued liabilities” on the balance sheet. See Note 8 for explanation of related derivative liability derived from variable conversion rate. This note was repaid in full in May 2018 (Note 10).

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Derivative Liability

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 8 - Derivative Liability

As of March 31, 2018 and December 31, 2017, Company had a derivative liability balance of $25,458 and $20,328 on the balance sheets and recorded a loss of $5,130 and $0 from derivative liability fair value adjustments during the three months ended March 31, 2018 and 2017. The derivative liability activity comes from convertible notes payable as follows:

As discussed in Note 7 – Convertible Notes Payable, on May 22, 2017 the Company issued a $4,900 Convertible Promissory Note to an unrelated party that is due on demand. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares 90 days after issuance, at the holder’s option, at the conversion rate equal to the lesser of a 50% discount from the last trade prior to conversion or $0.01. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to a variable conversion rate. In accordance with ASC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair values the embedded derivative using the Black-Scholes option pricing model. The aggregate fair value of the derivative at the issuance date of the note was $5,348 which was recorded as a derivative liability on the balance sheet. The Company recorded a debt discount of $4,900 which was equal to the face value of the convertible note, and immediately expensed $448. Although the note is due on demand, upon issuance the Company estimated a six-month repayment period, over which they amortized the debt discount in full. As such, the Company recorded $4,900 in amortization expense during the year ended December 31, 2017.

At March 31, 2018, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $25,458 and recorded a $5,130 loss from change in fair value for the three months ended March 31, 2018. The fair value of the embedded derivatives for the notes was determined using a Black Scholes valuation model based on the following assumptions: (1) expected volatility of 387%, (2) risk-free interest rate of 1.93%, and (3) expected life of 0.50 of a year.

The following table summarizes the derivative liabilities included in the balance sheet at March 31, 2018:

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$	20,328
Change in fair market value		5,130
Balance, March 31, 2018	$	25,458

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Acquisition of A.J.D. Data Services

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Note 9 – Acquisition of A.J.D. Data Services

On January 21, 2018, the Company entered into and closed the transactions contemplated by the definitive stock purchase agreement and plan of re-organization by and among the Company, A.J.D. Data Services Ltd., a limited liability company organized under the laws of Ontario (“A.J.D.”), the stockholders of A.J.D. and other parties signatory thereto to acquire 80 shares, representing 80% of the issued and outstanding capital stock of A.J.D. for 525,000 restricted common shares of the Company. A.J.D. is focused on document imaging, telemarketing, data entry, document management and all other back-end functions. The acquisition is intended to be part of a tax free share for share exchange which will see DLT Resolution issuing restricted common shares on closing and an additional 3,675,000 restricted common shares upon meeting the following milestones:

· 1,050,000 Shares upon A.J.D Data Services reaching $500,000 in gross sales

· 1,050,000 Shares upon A.J.D Data Services reaching $1,000,000 in cumulated gross sales

· 525,000 Shares upon A.J.D Data Services reaching $1,500,000 in cumulated gross sales with $100,000 in pre-tax earnings

· 525,000 Shares upon A.J.D Data Services reaching $2,000,000 in cumulated gross sales with $150,000 in pre-tax earnings

· 525,000 Shares upon A.J.D Data Services reaching $2,500,000 in cumulated gross sales with $200,000 in pre-tax earnings

The Company applied the acquisition method to the business combination and valued each of the assets acquired (cash, accounts receivable, equipment, customer relationships, software, domain names and non-compete agreements) and liabilities assumed (accounts payable and related party payable) at fair value as of the acquisition date. The cash, accounts receivable, accounts payable and related party payable were deemed to be recorded at fair value as of the acquisition date. The Company determined the fair value of the equipment to be historical net book value. The preliminary allocation of the purchase price was based on estimates of the fair value of the assets and liabilities assumed based on provisional amounts. The allocation of the excess purchase price is not final and the amounts allocated to intangible assets are subject to change pending the completion of final valuations of certain assets and liabilities. Under the purchase agreement, the Company issued 525,000 shares of common stock valued at $120,243 and committed to issue an additional 3,675,000 shares of common stock at certain milestones which was determined to have a fair value of $841,702 in exchange for a 80% interest. The estimated fair value of the common stock to be issued of $841,702 is shown as an “other long term liability” on the face of the balance sheet. The following table shows the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

ASSETS ACQUIRED
Cash	$	302
Accounts receivable		152,489
Equipment		22,743
Customer relationships		207,364
Software		156,924
Non-compete agreement		173,738
Domain name		6,405
Goodwill		531,484
TOTAL ASSETS ACQUIRED	$	1,251,449
LIABILITIES ASSUMED
Accounts payable		49,380
Related party payable		317
TOTAL LIABILITIES ASSUMED		49,697
Non-controlling interest		(239,807	)
NET ASSETS ACQUIRED	$	961,945

The intangible assets acquired will be amortized over 5 years.

The non-controlling interest was valued using an enterprise value approach whereby the total value of all net assets of A.J.D. were valued with the non-controlling interest representing the minority interest percentage of the net assets as of the date of acquisition. The non-controlling interest was determined to have a fair value of $239,807 as of the date of acquisition.

From the period of acquisition on January 21, 2018 to March 31, 2018, A.J.D. generated total revenues of $143,919.

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Concentrations of Revenue

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Note 10 – Concentrations of Revenue

During the three months ended March 31, 2018, five separate customers accounted for 91% of the Company’s total revenue. There was no revenue during the three months ended March 31, 2017.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 11 - Subsequent Events

On April 13, 2018, the Company accepted a common stock subscription for 37,037 shares of common stock at $0.27 cash per share resulting in a total subscription of $10,000 which was received in full.

On May 11, 2018, the Company accepted a common stock subscription for 200,000 shares of common stock at $0.33 cash per share resulting in a total subscription of $66,000. Of this amount, $25,000 has been received with the remaining $41,000 as a subscription receivable.

On May 21, 2018, the Company made convertible note repayments to repay the total outstanding principal and accrued interest on its outstanding convertible notes payable as discussed in Note 7 – Convertible Notes Payable.

Acquisition of Operating Assets

On April 12, 2018, the Company entered into and closed the transactions contemplated by the definitive asset purchase agreement and plan of re-organization (the “ Asset Purchase Agreement ”) by and among the Company, 1922861 Ontario Inc. a corporation organized under the laws of Ontario (“ 1922861 Ontario Inc. ”), the stockholders of 1922861 Ontario Inc. (“ Stockholders ”) and other parties signatory thereto to acquire all the operating assets of 1922861 Ontario Inc. for 500,000 restricted common shares of DLT Resolution and a payment of CAD $19,200 to 1922861 Ontario’s supplier. The acquisition will integrate the operating assets of this purchase into the Company’s Canadian subsidiary DLT Resolution Corp, a corporation formed under the Laws of the Province of Ontario.

In addition to the consideration on closing an additional 1,000,000 restricted common shares may potentially be issued upon meeting the following milestones:

· An additional 500,000 shares will be issued upon the acquired base generating CAD $35,000 in monthly sales for DLT Resolution for 3 consecutive months with a 10% pre-tax profit.

· And an additional 500,000 shares will be issued upon the acquired base generating CAD $500,000 in cumulated gross sales with a 10% pre-tax profit.

The Company has allotted 24 months to achieve these milestones. There is full acceleration to allow for full vesting as quickly as the cumulative sales milestones are reached. Share issuances will be issued under reliance of appropriate exemptions from registration with the Securities & Exchange Commission and will contain substantial resale restrictions.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Significant Accounting Policies Policies

Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Income taxes

The Company accounts for income taxes under the asset and liability method, where deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

At March 31, 2018, there were no uncertain tax positions that require accrual.

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company had accounts receivable of $233,947 and $0 and an allowance for doubtful accounts of $0 and $0 as of March 31, 2018 and December 31, 2017, respectively.

Revenue Recognition

The Company follows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue upon the transfer of promised services to customers in amounts that reflect the consideration to which the Company expects to be entitled the transfer of services. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) collectability is reasonably assured. The Company primarily generates revenues through the sale of document imaging, telemarketing, data entry, document management and all other back-end information technology (“IT”) functions.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. The Company provides for depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations.

Intangible Assets

Intangible assets primarily consist of customer relationships, software, non-compete agreements and domain names The Company amortizes, to cost of revenue and operating expenses, definite-lived intangible assets on a straight-line basis over the life of the assets of five years.

Impairment of Long Lived Assets and Goodwill

The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

The Company tests goodwill for impairment annually as of December 31, or whenever events or changes in circumstances indicate that goodwill may be impaired. The Company initially assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company compares the reporting unit’s carrying amount to its fair value. If the reporting unit’s carrying amount exceeds its fair value, an impairment charge is recorded based on that difference.

There was no impairment of long-lived assets or goodwill during the periods presented.

Convertible debt

The Company records beneficial conversion features related to the issuance of convertible debts that have conversion features at fixed or adjustable rates that are less than the Company’s stock prices on the respective issuance dates. The beneficial conversion features for the convertible instruments are recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instruments equal to the intrinsic value of the conversion features based on the difference between the effective conversion rates and the Company’s stock prices on the issuance dates. The beneficial conversion features are accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

Software Development Costs and Amortization

The Company capitalizes software development costs in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 985-20 (previously Statement of Financial Accounting Standards (“SFAS”) No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed”). Software development costs are capitalized after technological feasibility is established. Once the software products become available for general release to the public, the Company amortizes such costs over the related product’s estimated economic useful life to general and administrative expenses. Net capitalized software development costs (included in intangible assets) totaled $119,000 (acquired via issuance of $64,000 of Series B Preferred Stock and $55,000 in accounts payable) at March 31, 2018 and December 31, 2017, respectively. Related amortization expense, included in general and administrative expenses, totaled $9,917 and $0 for the three months ended March 31, 2018 and 2017, respectively.

Net loss per common share

Basic loss per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period. As of March 31, 2018, there was a convertible note outstanding that could convert to a total of 490,000 common shares and 3,675,000 common shares committed for issuance as part of the acquisition of AJD Data Services (see Note 12 – Acquisition of AJD Data Services) which is included in diluted common shares outstanding for the three months ended March 31, 2018. There were no potentially dilutive instruments outstanding at March 31, 2017.

Derivative Liabilities

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair market values of derivative liabilities over the life of the convertible notes.

Principals of Consolidation

The consolidated financial statements represent the results of DLT Resolution, Inc., its wholly owned subsidiary, DLT Resolution Corp. and its 80% owned subsidiary AJD Data Services (see Note 9 – Acquisition of AJD Data Services). All intercompany transactions and balances have been eliminated.

Foreign Currency Translation

The functional currency of the Company’s subsidiaries in Canada is the Canadian Dollar. The subsidiaries’ assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the annual average exchange rate for each period. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in other income (expense). There was not foreign currency transaction gains or losses recognized during the periods presented.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

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Related Party Notes Payable (Tables)

3 Months Ended

Mar. 31, 2018

Related Party Notes Payable Tables

Future maturities of related party notes payable

Year ended December 31,
2018	$	81,500
2019		5,000
Total	$	86,500

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Derivative Liability (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Liability Tables

Summary of activity of derivative liability

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$	20,328
Change in fair market value		5,130
Balance, March 31, 2018	$	25,458

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Acquisition of A.J.D. Data Services (Tables)

3 Months Ended

Mar. 31, 2018

Acquisition Of A.j.d. Data Services Tables

Sechudel of estimated fair values assets acquired and liabilities

ASSETS ACQUIRED
Cash	$	302
Accounts receivable		152,489
Equipment		22,743
Customer relationships		207,364
Software		156,924
Non-compete agreement		173,738
Domain name		6,405
Goodwill		531,484
TOTAL ASSETS ACQUIRED	$	1,251,449
LIABILITIES ASSUMED
Accounts payable		49,380
Related party payable		317
TOTAL LIABILITIES ASSUMED		49,697
Non-controlling interest		(239,807	)
NET ASSETS ACQUIRED	$	961,945

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Nature of Business (Details Narrative)	3 Months Ended
	Mar. 31, 2018
Nature Of Business Details Narrative
State Country Name	Nevada
Date of Incorporation	Jan. 17, 2007

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Going Concern (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Going Concern Details Narrative
Accumulated deficit	$ (3,383,786)	$ (3,394,701)
Working capital deficit	$ 41,769

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Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Net capitalized software development costs	$ 119,000
Series B preferred stock issued for intangible asset	64,000
Account payable entered into for intangible asset	55,000
General and administrative expenses	9,917	$ 0
Accounts receivable	233,947		$ 0
Allowance for doubtful accounts	$ 0		$ 0
Intangible asset, useful life	5 years
Convertible note [Member]
Shares reserved for future issuance	490,000		3,675,000

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Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Related Party Transactions Details Narrative
Proceeds from related party payables	$ 21,836
Repayments of related party advances	4,731
Related party payables	$ 61,643		$ 44,679

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Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2014
Treasury stock shares	3,815,000		3,815,000
Conversion of series A preferred shares to common shares	25,000
Exchange and rescission shares of common stock	25,000
Common shares issued	381,818
Dividends payable	$ 27,437		$ 26,697
Common stock, shares authorized	275,000,000		275,000,000
Common stock, shares issued	22,568,577		21,572,871
Common stock, shares outstanding	18,753,577		17,757,871
Common stock par value	$ 0.001		$ 0.001
Treasury stock	$ 5,300		$ 5,300
Proceeds from the sale of common stock	77,500
Related party note payable entered into for purchase of treasury stock	$ 200
Outstanding common shares of treasury stock	3,777,000
Notes payable, net of current portion	$ 5,000		$ 5,000
Common shares issued for acquisition of AJD Data Services, shares	525,000
Common shares issued for acquisition of AJD Data Services, value	$ 120,243
Common shares issued in exchange for preferred shares	25,000
Common shares, reverse stock splits			63,888
Former officer [Member]
Treasury stock				$ 100
Common Stock | Former officer [Member]
Treasury stock shares				380,000
Series A Convertible Preferred Stock
Convertible Preferred stock, shares issued	0		25,000
Convertible Preferred stock, shares outstanding	0		25,000
Common stock, shares authorized	5,000,000
Common stock par value	$ 0.10
Common shares issued in exchange for preferred shares	25,000

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Related Party Notes Payable (Details) - Notes Payable [Member]	Mar. 31, 2018 USD ($)
Year ended December 31,
2018	$ 81,500
2019	5,000
Total	$ 86,500

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Related Party Notes Payable (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Mar. 31, 2018	Dec. 31, 2017
Current notes payable, related party				$ 81,500	$ 81,500
Interest payable, related party				21,354	19,545
Notes payable, related party, net of current portion				$ 5,000	$ 5,000
Notes Payable [Member]
Consulting services amount			$ 350,000
Interest rate			9.00%
Debt due date			Nov. 19, 2016
Common Stock
Common shares issued in exchange for note payable principal, Shares	1,250,000
Common shares issued in exchange for note payable principal, Amount	$ 250,000
Series A Preferred Stock
Preferred stock share isssued in exchange of note payable		50,000
Preferred stock issued for repayment of accrued interest payable		$ 31,500
Preferred stock issued for repayment of note payable		$ 18,500

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Convertible Notes Payable (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

May 22, 2017

Mar. 31, 2018

Dec. 31, 2017

Accrued interest

$ 3,169

$ 3,048

Convertible notes payable

$ 4,900

$ 4,900

Convertible Notes Payable [Member]

Interest rate

10.00%

Debt instrument Convertible conversion description

The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares 90 days after issuance, at the holder’s option, at the conversion rate equal to the lesser of a 50% discount from the last trade prior to conversion or $0.01

Convertible notes payable

$ 4,900

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Derivative Liabilities (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$ 20,328
Change in fair market value	5,130
Balance, March 31, 2018	$ 25,458

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Derivative Liabilities (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

May 22, 2017

Mar. 31, 2018

Mar. 31, 2017

Dec. 31, 2017

Derivative liability

$ 25,458

$ 20,328

Convertible note payable

4,900

4,900

Excess fair market value of derivative liability charged to interest

448

Amortization expense

$ 4,900

Loss on change in fair market value of derivative liability

$ (5,130)

Risk free interest rate

1.93%

Expected lives

6 months

Expected volatility

387.00%

Convertible Notes Payable [Member]

Derivative liability

$ 5,348

Convertible note payable

$ 4,900

Interest rate

10.00%

Debt instrument convertible note conversion description

The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares 90 days after issuance, at the holder’s option, at the conversion rate equal to the lesser of a 50% discount from the last trade prior to conversion or $0.01

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Acquisition of A.J.D. Data Services (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
ASSETS ACQUIRED
Cash	$ 45,966	$ 8,609
Goodwill	514,437
LIABILITIES ASSUMED
Accounts payable	59,043	26,415
Related party payables	61,643	$ 44,679
AJD [Member]
ASSETS ACQUIRED
Cash	302
Accounts receivable	152,489
Equipment	22,743
Customer relationships	207,364
Software	156,924
Non-compete agreement	173,738
Domain name	6,405
Goodwill	531,484
TOTAL ASSETS ACQUIRED	1,251,449
LIABILITIES ASSUMED
Accounts payable	49,380
Related party payables	317
TOTAL LIABILITIES ASSUMED	49,697
Non-controlling interest	(239,807)
NET ASSETS ACQUIRED	$ 961,945

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Acquisition of A.J.D. Data Services (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jan. 21, 2018	Dec. 31, 2017
Common stock share issued	22,568,577			21,572,871
Common stock value	$ 22,569			$ 21,573
Other long term liability	$ 841,702
Intangible assets useful life	5 years
Total revenues	$ 148,388
Purchase Agreement [Member]
Common stock share issued	525,000
Common stock value	$ 120,243
Additional share issued of common stock	3,675,000
Common stock fair value	$ 841,702
Other long term liability	$ 841,702
Intangible assets useful life	5 years
Stock Purchase Agreement [Member]
Business acquisition, shares to be acquired under agreement			80
Business acquisition, ownership interest to be acquired under agreement			80.00%
AJD [Member]
Non-controlling interest	$ (239,807)
Total revenues	$ 143,919
Conditional issuance of common stock shares reserve for future issuance	3,675,000
AJD [Member] | Condition Two [Member]
Conditional issuance of common stock shares reserve for future issuance	525,000
Gross sales	$ 1,500,000
Pre tax earnings	$ 100,000
Restricted common shares exchange description	525,000 Shares upon A.J.D Data Services reaching $1,500,000 in cumulated gross sales with $100,000 in pre-tax earnings
AJD [Member] | Condition [Member]
Conditional issuance of common stock shares reserve for future issuance	1,050,000
Gross sales	$ 500,000
Restricted common shares exchange description	1,050,000 Shares upon A.J.D Data Services reaching $500,000 in gross sales
AJD [Member] | Condition One [Member]
Conditional issuance of common stock shares reserve for future issuance	1,050,000
Gross sales	$ 1,000,000
Restricted common shares exchange description	1,050,000 Shares upon A.J.D Data Services reaching $1,000,000 in cumulated gross sales
AJD [Member] | Condition Three [Member]
Conditional issuance of common stock shares reserve for future issuance	525,000
Gross sales	$ 2,000,000
Pre tax earnings	$ 150,000
Restricted common shares exchange description	525,000 Shares upon A.J.D Data Services reaching $2,000,000 in cumulated gross sales with $150,000 in pre-tax earnings
AJD [Member] | Condition Four [Member]
Conditional issuance of common stock shares reserve for future issuance	525,000
Gross sales	$ 2,500,000
Pre tax earnings	$ 200,000
Restricted common shares exchange description	525,000 Shares upon A.J.D Data Services reaching $2,500,000 in cumulated gross sales with $200,000 in pre-tax earnings

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Concentrations of Revenue (Details Narrative)	3 Months Ended
	Mar. 31, 2018
Customers [Member]
Concentrations revenue percentages	91.00%
Customers One [Member]
Concentrations revenue percentages	91.00%
Customers Two [Member]
Concentrations revenue percentages	91.00%
Customers Three [Member]
Concentrations revenue percentages	91.00%
Customers Four [Member]
Concentrations revenue percentages	91.00%

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Subsequent Events (Details Narrative) - Subsequent Event [Member]

Apr. 12, 2018

CAD ($)

shares

May 11, 2018

USD ($)

$ / shares

shares

Apr. 13, 2018

USD ($)

$ / shares

shares

Common stock shares subscription | shares

200,000

37,037

Common stock value subscription

$ 66,000

$ 10,000

Common stock subscription per share | $ / shares

$ 0.33

$ 0.27

Common stock subscription received

$ 25,000

Common stock subscription Receivable

$ 41,000

Conditional issuance of common stock shares reserve for future issuance, shares | shares

1,000,000

Business acquisition description

In addition to the consideration on closing an additional 1,000,000 restricted common shares may potentially be issued upon meeting the following milestones:

· An additional 500,000 shares will be issued upon the acquired base generating CAD $35,000 in monthly sales for DLT Resolution for 3 consecutive months with a 10% pre-tax profit.

· And an additional 500,000 shares will be issued upon the acquired base generating CAD $500,000 in cumulated gross sales with a 10% pre-tax profit.

Asset Purchase Agreement [Member]

Restricted common shares issued | shares

500,000

Monthly sales

$ 19,200

Acquisition One [Member]

Conditional issuance of common stock shares reserve for future issuance, shares | shares

500,000

Gross sales

$ 500,000

Pre-tax profit, percentages

10.00%

Acquisition [Member]

Conditional issuance of common stock shares reserve for future issuance, shares | shares

500,000

Monthly sales

$ 35,000

Pre-tax profit, percentages

10.00%