0001477932-24-000134.txt : 20240111 0001477932-24-000134.hdr.sgml : 20240111 20240111170303 ACCESSION NUMBER: 0001477932-24-000134 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 58 CONFORMED PERIOD OF REPORT: 20160930 FILED AS OF DATE: 20240111 DATE AS OF CHANGE: 20240111 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN ITS INTERNATIONAL, INC. CENTRAL INDEX KEY: 0001468978 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] ORGANIZATION NAME: 06 Technology IRS NUMBER: 223977583 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55420 FILM NUMBER: 24529876 BUSINESS ADDRESS: STREET 1: 42215 WASHINGTON STREET STREET 2: SUITE A-345 CITY: PALM DESERT STATE: CA ZIP: 92211 BUSINESS PHONE: 442-300-6522 MAIL ADDRESS: STREET 1: 42215 WASHINGTON STREET STREET 2: SUITE A-345 CITY: PALM DESERT STATE: CA ZIP: 92211 FORMER COMPANY: FORMER CONFORMED NAME: ALCO ADVANCED TECHNOLOGIES INC DATE OF NAME CHANGE: 20090723 10-Q 1 sitsf_10q.htm FORM 10-Q sitsf_10q.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

Mark One

 

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

 

For the quarterly period ended September 30, 2016

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to _______

 

Commission File No. 000-55420

 

SOUTHERN ITS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

7382

 

EIN: 22-2977583

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Number)

 

(IRS Employer

Identification Number)

 

42215 Washington Street

Suite A-345

Palm Desert, CA 92211

(442) 300-6522

(Address and telephone number of principal executive offices)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbols

 

Name of each exchange on which registered

N/A

N/A

N/A

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ☐     No

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ 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. (Check one)

 

Large accelerated filer

Smaller reporting company

Accelerated filer

Emerging Growth Company

Non-accelerated filer

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the exchange act.

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

 

There were 104,320,659 shares of the registrant’s common stock, $0.001 par value per share, outstanding on January 8, 2024.

 

 

 

 

TABLE OF CONTENTS

 

PART I

ITEM 1

Financial Statements

 

3

 

ITEM 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

 

ITEM 3

Quantitative and Qualitative Disclosures about Market Risk

 

18

 

ITEM 4

Controls and Procedures

 

18

 

 

 

 

 

PART II

ITEM 1

Legal Proceedings

 

20

 

ITEM 1A

Risk Factors

 

20

 

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

20

 

ITEM 3

Defaults Upon Senior Securities

 

20

 

ITEM 4

Mining Safety Disclosures

 

20

 

ITEM 5

Other Information

 

20

 

ITEM 6

Exhibits

 

21

 

 

 
2

Table of Contents

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Southern ITS International, Inc.

Consolidated Financial Statements

September 30, 2016 and December 31, 2015

(Unaudited)

 

SOUTHERN ITS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Assets:

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and Cash Equivalents

 

$40,475

 

 

$15,178

 

Accounts Receivable, net

 

 

-

 

 

 

-

 

Advances to Non-Related Parties

 

 

10,000

 

 

 

10,000

 

Prepaid Items

 

 

2,000

 

 

 

2,000

 

Total Current Assets

 

 

52,475

 

 

 

27,178

 

Fixed Assets:

 

 

 

 

 

 

 

 

Furniture and Equipment

 

 

5,808

 

 

 

5,808

 

Accumulated Depreciation

 

 

(3,814 )

 

 

(3,190 )

Total Fixed Assets

 

 

1,994

 

 

 

2,618

 

Total Assets

 

$54,469

 

 

$29,796

 

Liabilities and Stockholders’ Deficit:

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts Payable & Accrued Expenses

 

$321,491

 

 

$339,273

 

Accrued Interest

 

 

474,016

 

 

 

458,244

 

Convertible Notes Payable- Related Party

 

 

294,712

 

 

 

294,712

 

Convertible Notes Payable

 

 

390,000

 

 

 

390,000

 

Notes Payable- Related Party

 

 

106,205

 

 

 

106,205

 

Derivative Liability

 

 

1,453,618

 

 

 

1,453,618

 

Total Current Liabilities

 

 

3,040,042

 

 

 

3,042,052

 

Non-Current Liabilities:

 

 

 

 

 

 

 

 

Convertible Notes Payable- Related Party

 

 

-

 

 

 

-

 

Total Non-Current Liabilities

 

 

-

 

 

 

-

 

Total Liabilities

 

 

3,040,042

 

 

 

3,042,052

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Preferred Stock, Par value $0.001, Authorized 10,000,000 shares Issued 5,000,000 shares respectively

 

 

5,000

 

 

 

5,000

 

Common Stock, Par value $0.001, Authorized 50,000,000 shares - Issued 20,884,708 & 20,884,708 shares

 

 

20,885

 

 

 

20,885

 

Paid-In Capital

 

 

6,098,117

 

 

 

6,098,117

 

Deficit Accumulated During Development Stage

 

 

(9,109,575 )

 

 

(8,887,581 )

Total Stockholders’ Equity

 

 

(2,985,573 )

 

 

(3,012,256 )

Total Liabilities and Stockholders’ Equity

 

$54,469

 

 

$29,796

 

 

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

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
3

Table of Contents

 

SOUTHERN ITS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Nine Months Ended

 

 

 

September 30,

2016

 

 

September 30,

2015

 

 

 

 

 

 

 

 

Revenues

 

$409,057

 

 

$727,680

 

Costs of Services

 

 

88,016

 

 

 

464,689

 

Gross Margin

 

 

321,041

 

 

 

262,991

 

Operating Expenses:

 

 

 

 

 

 

 

 

Consulting

 

 

-

 

 

 

32,074

 

Professional Fees

 

 

1,500

 

 

 

5,130

 

Wages

 

 

90,742

 

 

 

45,196

 

General and Administrative

 

 

145,804

 

 

 

165,551

 

Total Operating Expenses

 

 

238,046

 

 

 

247,951

 

Operating Income (Loss)

 

 

82,995

 

 

 

15,040

 

Other Income (Expense):

 

 

 

 

 

 

 

 

Interest Expense

 

 

(23,658 )

 

 

(34,415 )

Derivative Expense

 

 

 

 

 

 

-

 

Interest Income

 

 

-

 

 

 

-

 

Total Other Income (Expense)

 

 

(23,658 )

 

 

(34,415 )

Net Income (Loss) Before Taxes

 

 

59,337

 

 

 

(19,375 )

Income Tax Provision

 

 

-

 

 

 

-

 

Net Income (Loss)

 

$59,337

 

 

$(19,375 )

Loss per Share, Basic & Diluted

 

$(0.00 )

 

$(0.00 )

Weighted Average Shares Outstanding

 

 

20,884,708

 

 

 

19,134,708

 

 

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

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
4

Table of Contents

 

SOUTHERN ITS INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

Additional

 

 

 

 

 

Total

Stockholders’

 

 

 

Preferred

 

 

Preferred

 

 

Common

 

 

Common

 

 

Stock

 

 

Paid in

 

 

Accumulated

 

 

Equity

 

 

 

Shares

 

 

Stock

 

 

Shares

 

 

Stock

 

 

Issuable

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance March 25, 2008

 

 

 0

 

 

 

 0

 

 

 

 0

 

 

 

 0

 

 

 

 0

 

 

 

 0

 

 

 

 0

 

 

 

 0

 

Net Loss Inception (March 26, 2008) to 12/31/2008

 

 

-

 

 

$-

 

 

 

-

 

 

$-

 

 

 

-

 

 

$-

 

 

$(282,194 )

 

$(282,194 )

Stock issued at inception

 

 

-

 

 

 

-

 

 

 

5,771.44

 

 

 

6

 

 

 

-

 

 

 

93,515

 

 

 

-

 

 

 

93,521

 

Net Loss for year ended December 31, 2009

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(457,774 )

 

 

(457,774 )

Balance December 31, 2009

 

 

-

 

 

 

-

 

 

 

5,771

 

 

 

6

 

 

 

-

 

 

 

93,515

 

 

 

(739,968 )

 

 

(646,447 )

Stock issued for services

 

 

-

 

 

 

-

 

 

 

133.33

 

 

 

0

 

 

 

-

 

 

 

13,000

 

 

 

-

 

 

 

13,000

 

Stock issued for debt reduction

 

 

-

 

 

 

-

 

 

 

400

 

 

 

0

 

 

 

-

 

 

 

22,748

 

 

 

-

 

 

 

22,748

 

Net Loss for year ended December 31, 2010

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(211,081 )

 

 

(211,081 )

Balance December 31, 2010

 

 

-

 

 

 

-

 

 

 

6,305

 

 

 

6

 

 

 

-

 

 

 

129,263

 

 

 

(951,049 )

 

 

(821,780 )

Stock issued for services

 

 

-

 

 

 

-

 

 

 

2,666.67

 

 

 

27

 

 

 

-

 

 

 

2,999,973

 

 

 

-

 

 

 

3,000,000

 

Stock issued for debt reduction

 

 

-

 

 

 

-

 

 

 

10,406.67

 

 

 

10

 

 

 

-

 

 

 

19,990

 

 

 

-

 

 

 

20,000

 

Net loss for year ended December 31, 2011

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,137,881 )

 

 

(3,137,881 )

Balance December 31, 2011

 

 

-

 

 

 

-

 

 

 

43,378

 

 

 

43

 

 

 

-

 

 

 

3,149,226

 

 

 

(4,088,930 )

 

 

(939,661 )

Stock issued pursuant to share exchange- addendum was later executed on April 30, 2013

 

 

-

 

 

 

-

 

 

 

4,000,000

 

 

 

4,000

 

 

 

-

 

 

 

(4,000 )

 

 

-

 

 

 

-

 

Stock issuable pursuant to addendum to share exchange agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

20,000

 

 

 

2,080,000

 

 

 

-

 

 

 

2,100,000

 

Stock issued for debt reduction

 

 

-

 

 

 

-

 

 

 

2,920,000

 

 

 

2,920

 

 

 

-

 

 

 

70,080

 

 

 

-

 

 

 

73,000

 

Stock issued for services

 

 

-

 

 

 

-

 

 

 

969.52

 

 

 

1

 

 

 

-

 

 

 

2,882

 

 

 

-

 

 

 

2,883

 

Net loss for year ended December 31, 2012

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,148,761 )

 

 

(2,148,761 )

Balance December 31, 2012

 

 

-

 

 

 

-

 

 

 

6,964,348

 

 

 

6,964

 

 

 

20,000

 

 

 

5,298,188

 

 

 

(6,237,691 )

 

 

(912,539 )

Stock cancelled per addendum to share exchange agreement

 

 

-

 

 

 

-

 

 

 

(4,000,000 )

 

 

(4,000 )

 

 

-

 

 

 

4,000

 

 

 

-

 

 

 

-

 

Stock issued per addendum to share exchange agreement

 

 

-

 

 

 

-

 

 

 

400,000

 

 

 

400

 

 

 

(20,000 )

 

 

19,600

 

 

 

-

 

 

 

-

 

Preferred stock for services

 

 

5,000,000

 

 

 

5,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,000

 

Stock for services

 

 

-

 

 

 

-

 

 

 

400,000

 

 

 

400

 

 

 

-

 

 

 

43,600

 

 

 

-

 

 

 

44,000

 

Net loss for year ended December 31, 2013

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,442,631 )

 

 

(1,442,631 )

Balance December 31, 2013

 

 

5,000,000

 

 

 

5,000

 

 

 

3,764,348

 

 

 

3,764

 

 

 

-

 

 

 

5,365,388

 

 

 

(7,680,322 )

 

 

(2,306,170 )

Stock cancelled J. Bell per agreement

 

 

-

 

 

 

-

 

 

 

(400,000 )

 

 

(400 )

 

 

-

 

 

 

(19,600 )

 

 

-

 

 

 

(20,000 )

Reverse split (50 to 1) adjustment

 

 

-

 

 

 

-

 

 

 

(79,640 )

 

 

(79 )

 

 

-

 

 

 

79

 

 

 

-

 

 

 

-

 

Stock issued for debt reduction

 

 

-

 

 

 

-

 

 

 

3,100,000

 

 

 

3,100

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,100

 

Stock issued for services

 

 

-

 

 

 

-

 

 

 

12,750,000

 

 

 

12,750

 

 

 

-

 

 

 

752,250

 

 

 

-

 

 

 

765,000

 

Net loss for year ended December 31, 2014

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(470,583 )

 

 

(470,583 )

Balances December 31, 2014

 

 

5,000,000

 

 

$5,000

 

 

 

19,134,708

 

 

$19,135

 

 

 

-

 

 

$6,098,117

 

 

$(8,150,905 )

 

$(2,028,654 )

Stock issued during year

 

 

 

 

 

 

 

 

 

 

1,750,000

 

 

$1,750

 

 

 

 

 

 

$-

 

 

 

 

 

 

$1,750

 

Net Loss for year ended Dec. 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(1,018,006 )

 

$(1,018,006 )

Balances December 31, 2015

 

 

5,000,000

 

 

$5,000

 

 

 

20,884,708

 

 

$20,885

 

 

 

 

 

 

$6,098,117

 

 

$(9,168,912 )

 

$(3,012,256 )

Net Gain for 9 months ended Sept. 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$59,337

 

 

$59,337

 

Balances Sept. 2016

 

 

5,000,000

 

 

$5,000

 

 

 

20,884,708

 

 

$20,885

 

 

 

 

 

 

$6,098,117

 

 

$(9,109,575)

 

$(2,985,573)

 

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

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
5

Table of Contents

 

SOUTHERN ITS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended

 

 

 

September 30,

2016

 

 

September 30,

2015

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net Income (Loss) for the Period

 

$59,337

 

 

$(19,375 )

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

624

 

 

 

622

 

Stock issued for services

 

 

-

 

 

 

-

 

Bad Debts

 

 

-

 

 

 

-

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

 

 

Increase in accounts payable & accrued expenses

 

 

(50,537)

 

 

(37,251 )

Increase in Advance to Related Party

 

 

101

 

 

 

-

 

Increase in Note Receivable

 

 

-

 

 

 

-

 

Increase in Interest Receivable

 

 

-

 

 

 

-

 

Decrease in Prepaid Expenses

 

 

-

 

 

 

(118,631)

Increase in accrued interest

 

 

15,772

 

 

 

62,317

 

Accrued Expenses

 

 

-

 

 

 

60,200

 

Increase (decrease) in accounts receivable, net

 

 

-

 

 

 

-

 

Derivative expense

 

 

-

 

 

 

-

 

Net Cash Used in Operating Activities

 

 

25,297

 

 

 

(14,867 )

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from convertible notes to related party

 

 

-

 

 

 

-

 

Payments on note payable to related party

 

 

-

 

 

 

-

 

Proceeds from note payable

 

 

-

 

 

 

-

 

Net Cash Provided by Financing Activities

 

 

-

 

 

 

-

 

Net (Decrease) Increase in Cash

 

 

25,297

 

 

 

(14,867 )

Cash at Beginning of Period

 

 

15,178

 

 

 

20,994

 

Cash at End of Period

 

$40,475

 

 

$6,127

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$-

 

 

$-

 

Franchise and Income Taxes

 

$-

 

 

$-

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Accounts Payable Satisfied through Contributed Capital and Property and Equipment

 

$-

 

 

$-

 

 

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

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
6

Table of Contents

 

SOUTHERN ITS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016 AND DECEMBER 31, 2015

(Unaudited)

 

NOTE 1 - NATURE AND DESCRIPTION OF BUSINESS

 

Southern ITS International, Inc. (formerly Alco Advanced Technologies, Inc.) (“Company”) was incorporated in the State of Nevada on September 27, 1984. On March 21, 2012, the Company changed its name from Alco Advanced Technologies, Inc. to Southern ITS International, Inc.

 

The Company executed a share exchange with Southern ITS Corporation (“the Subsidiary”) in which the result was Southern ITS becoming a wholly-owned subsidiary of the Company. Refer to Note 9 for more information.

 

The Company’s operations consist of providing turnkey integration of electronic security systems for various types of industries, such as transportation, gaming and other secure operations in both government and private sectors. The integration includes surveillance, access control, network infrastructure, data communications and fire and burglar alarm systems. Today, security technologies are evolving rapidly and require remote access through various networks, firewalls, and internet security. Surveillance systems and access control are all network- dependent and work best for the end user when they are completely integrated. The Company’s mission is to provide a complete integration of the various electronic security systems with the computer networks that they are dependent upon and ensuring that the systems will remain secure from potential cyber attack.

 

On July 17, 2014, the Company enacted a 1-for-50 reverse stock split. The Company has adjusted all periods presented for the effects of the stock split.

 

On August 15, 2014, the Company amended its articles of incorporation to decrease its authorized shares of common stock from Two Hundred Fifty Million (250,000,000) shares to Fifty Million (50,000,000) shares, with a par value of $0.001. The Company remains to have Ten Million (10,000,000) preferred shares with par value of $0.001 authorized. The Company designated 10,000,000 Series A Preferred Stock which have voting rights equal to 500 votes for each 1 preferred share.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

 

It is management’s opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made, which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

 

Restatement of Financial Statements

 

Certain amounts in the prior period financial statements have been adjusted to conform to the current period presentation pursuant to a 1 for 50 reverse stock split on, see Note 14.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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Basis of Consolidation

 

The accompanying consolidated financial statements include all of the accounts of the Company and Southern ITS as of September 30, 2016 and December 31, 2015 for the periods then ended. All intercompany balances and transactions have been eliminated.

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Such estimates and assumptions impact, among others, the valuation allowance for deferred tax assets, due to continuing and expected future losses, and share-based payments.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

 

Cash and cash equivalents

 

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

 

Allowance for Doubtful Accounts

 

The Company evaluates the collectability of its accounts receivable based on a combination of factors. In circumstances where it is aware of a specific customer’s ability to meet its financial obligations, it records a specific reserve to reduce the amounts recorded to what it believes will be collected. For all other customers, it recognizes reserves for bad debts based on historical experience. The company had an allowance for doubtful accounts balance of $0 at September 30, 2016 and December 31, 2015.

 

Fair Value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10- 35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1

 

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

 

 

Level 2

 

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

 

 

Level 3

 

Pricing inputs that are generally observable inputs and not corroborated by market data.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at September 30, 2016 and December 31, 2015; no gains or losses are reported in the consolidated statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date ended September 30, 2016 and December 31, 2015.

 

Property and Equipment

 

Property and equipment are stated at cost, less accumulated depreciation on a straight-line basis over the estimated useful lives of 5 to 7 years. Maintenance and repairs are charged to operations when incurred. Betterment and renewals are capitalized when deemed material. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

 

Intangible Assets

 

Valuation of intangible assets include significant estimates and assumptions such as estimating future cash flows from product sales, developing appropriate discount rates, estimating probability rates for the successful completion of projects, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired.

 

Long Lived Assets

 

The Company reviews the recoverability of the carrying value of identified intangibles and other long-lived assets, including fixed assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recover-ability of these assets is determined based upon the forecasted undiscounted future net cash flows expected to result from the use of such asset and its eventual disposition. The Company’s estimate of future cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors. The actual cash flows realized from these assets may vary significantly from its estimates due to increased competition, changes in technology, fluctuations in demand, consolidation of its customers and reductions in average selling prices. If the carrying value of an asset is determined not to be recoverable from future operating cash flows, the asset is deemed impaired and an impairment loss is recognized to the extent the carrying value exceeds the estimated fair market value of the asset.

 

Revenue recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) the collectability is reasonably assured. There are no price incentives and the product can only be returned if defective. As the Company does not believe defective merchandise is likely an allowance has not been recognized. Revenue is recognized on a gross basis with corresponding costs of goods as a reduction to revenue in cost of sales. The Company’s subsidiary earned the majority of the Company’s revenues in 2012 from installing network surveillance systems. The Company applies the percentage-of-completion revenue recognition principles of accounting when recording revenues for ongoing projects.

 

Risks and uncertainties

 

The Company operates in an industry that is subject to rapid change. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. Also, see Note 3 regarding going concern matters.

 

Segment information

 

During 2015 & 2016, the Company only operated in one segment; therefore, segment information has not been presented.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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Share based payments

 

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

 

Earnings per share

 

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.

 

Income Taxes

 

The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

 

Accounting guidance now codified as FASB ASC Topic 740-20, “Income Taxes – Intra-period Tax Allocation,” clarifies the accounting for uncertainties in income taxes recognized in accordance with FASB ASC Topic 740-20 by prescribing guidance for the recognition, de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns, including a decision whether to file or not to file in a Particular jurisdiction. FASB ASC Topic 740-20 requires that any liability created for unrecognized tax benefits is disclosed. The application of FASB ASC Topic 740-20 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets.

 

Subsequent events

 

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

 

Recent accounting pronouncements

 

On January 15, 2014The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2011-08, Intangibles—Accounting for Goodwill (Topic 350). The Update simplifies the accounting alternative, if elected, to goodwill existing as of the beginning of the period of adoption and any new goodwill recognized in annual periods beginning after December 15, 2014.

 

In April 2013, the FASB issued ASU No. 2010-17, “Revenue Recognition – Milestone Method (Topic 605): Milestone Method of Revenue Recognition” (codified within ASC 605 - Revenue Recognition). ASU 2013-45 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for construction contracts.

 

Company management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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NOTE 3 - GOING CONCERN

 

The Company’s financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has an accumulated deficit of $9,109,575 from inception (September 27, 1984) to September 30, 2016. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to address the going concern issue by funding future operations through the sale of equity capital and by director loans, if needed.

 

The Company is in the development stage and anticipates that it will be able to have profitable operations in the near future. The Company believes its current available cash, along with anticipated revenues, will be sufficient to meet its cash needs for the near future. There can be no assurance that future financing will be available in amounts or terms acceptable to the Company, if at all.

 

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue its operations is dependent on Management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

 

The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.

 

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

In response to these problems, management has taken the following actions:

 

·

seeking additional debt and/or equity financing,

 

 

·

continue with development and implementation of the business plan,

 

 

·

assess business markets and related opportunities so that more significant revenues can be generated, and

 

 

·

allocation of sufficient resources to continue with service and product marketing efforts.

 

NOTE 4 - REVERSE STOCK SPLIT

 

On August 4, 2014, the Company executed a reverse stock split whereby the holders of stock in the Company, Southern ITS International, Inc., received one (1) post reverse stock-split share of common stock, $0.001 par value per share, in exchange for every fifty (50) shares of common stock (in effect, a 1 for 50 reverse split).

 

Prior to the reverse stock split the Company had 168,217,400 shares of common stock outstanding. As a result of the 1 for 50 reverse stock-split, the Company had 3,284,708 post reverse-split common shares issued and outstanding. The Company has adjusted the equity statement and equity portion of the balance sheet to retroactively account for the reverse stock split as if it occurred at inception.

 

NOTE 5 - PREPAIDS

 

The prepaid asset balance at Septemer 30, 2016, is a prepaid office rent deposit of $2,000.

 

NOTE 6 - ACCOUNTS RECEIVABLE

 

The Company had the following accounts receivable balances as of September 30, 2016 and December 31, 2015:

 

 

 

September 30,

2016

 

 

December 31,

2015

 

Accounts Receivable

 

$-

 

 

$-

 

Less: Allowance for Doubtful Accounts

 

 

-

 

 

 

-

 

Total

 

$-

 

 

$-

 

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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In the year ended December 31, 2015, the Company recorded $-0- of bad debt expense and the same for the period ended September 30, 2016. As of September 30, 2016, the Company had fully reduced the accounts receivable balance with the allowance for doubtful account balance due to the certainty of non-collection of receivables. Therefor the Company wrote off the accounts receivable and allowance for doubtful accounts balances to zero.

 

NOTE 7 - FIXED ASSETS

 

At September 30, 2016 and December 31, 2015 the Company has the following fixed assets:

 

 

 

September 30,

2016

 

 

December 31,

2015

 

Furniture and Equipment

 

$5,808

 

 

$5,808

 

Less Accumulated Depreciation

 

 

(3,814 )

 

 

(3,190 )

Fixed Assets, net

 

$1,994

 

 

$2,618

 

 

Depreciation expense for the period ended September 30, 2016 was $624. Depreciation expense for the year ended December 31, 2015 was $830.

 

NOTE 8 - NOTES PAYABLE

 

The Company has unsecured notes payable and convertible notes payable to related parties and non-related parties at September 30, 2016 under the following general terms:

 

Convertible notes payable to related parties

 

Between May 12, 2008 and December 29, 2011, the Company entered into multiple convertible promissory notes, all of which have identical terms, with Bonavel Development, S.A. for a total amount of $130,820. The notes bear a 10% interest rate per annum and have a maturity date of March 31, 2015 and are currently in default. The convertible note’s principal and accrued interest may at any time be converted into shares of the Company’s stock at a conversion rate fixed at $0.025 per share. As of September 30, 2016, there is a principal balance outstanding in the amount of $37,820 with accrued interest of $45,047. Of the total amount of $130,820 in principal, $93,000 was converted into stock of the Company, all of which occurred prior to January 1, 2013. As of September 30 2016, the Company had recorded a derivative liability of $164,005 which was calculated using the Black Scholes Model.

 

Between November 2, 2009 and December 21, 2012, the Company entered into multiple convertible promissory notes, all of which have identical terms, with Alco Scanning Services, Inc. for a total amount of $348,643. The notes bear a 10% interest rate per annum and have a maturity date of December 31, 2012, and are currently in default. The convertible note’s principle and accrued interest may at any time be converted into shares of the Company’s stock at a conversion rate fixed at $0.025 per share. As of September 30, 2016, there is a principal balance outstanding in the amount of $256,891 with accrued interest of $120,123. Of the total amount of $348,643 in principal, $91,752 was repaid with cash, all of which occurred prior to January 1, 2013. As of September 30, 2016, no principal has been converted into shares of stock in the Company. As of September 30, 2016, the Company recorded a derivative liability of $744,500 which was calculated using the Black Scholes Model.

 

Convertible notes payable to non-related parties

 

On April 20, 2009, the Company entered into a convertible promissory note with Katherine Loren Armagnac in the amount of $30,000 with an interest rate of 10% per annum. The note is convertible into common shares of the Company at a fixed conversion price of $0.10 per share. As of September 30, 2016, no principal has been converted into shares of stock in the Company. The Company did not record derivative liability pertaining to this note because the conversion price is greater than the fair market stock price as of September 30, 2016.

 

On June 3, 2009, the Company entered into a convertible promissory note with Marflu S.A. for a total amount of $200,000. The note bears 10% interest rate per annum and has a maturity date of June 3, 2014, and is currently in default. The convertible note’s principle and accrued interest may at any time be converted into shares of the Company’s stock at a conversion rate fixed at $0.001 per share. As of September 30, 2016, there is a principal balance outstanding in the amount of $200,000 with accrued interest of $87,447. As of September 30, 2016, no principal has been converted into shares of stock in the Company. As of September 30, 2016, the Company recorded a derivative liability of $467,853 which was calculated using the Black Scholes Model.

 

On June 8, 2009, the Company entered into a convertible promissory note with Steven R. Hammond in the amount of $75,000 with an interest rate of 10% per annum. The note is convertible into common shares of the Company at a fixed conversion price of $0.10 per share. As of September 30, 2016, no principal has been converted into shares of stock in the Company. The Company did not record derivative liability pertaining to this note because the conversion price is greater than the fair market stock price as of September 30, 2016.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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On December 12, 2014, the Company entered into a convertible promissory note with Erik Miller in the amount of $50,000 with an interest rate of 10% per annum, unsecured, and due December 12, 2015. The convertible note’s principal and accrued interest may at any time be converted into shares of the Company’s stock at a conversion rate equal to $0.10 per share. As of September 30, 2016, no principal has been converted into shares of stock in the Company. As of September 30, 2016, the Company recorded a derivative liability of $77,260 which was calculated using the Black Scholes Model.

 

On March 2, 2015, the Company entered into a convertible promissory note with Craig Plummer in the amount of $25,000 with an interest rate of 10% per annum. The note is convertible into common shares of the Company at a fixed conversion price of $0.25 per share. As of September 30, 2016, no principal has been converted into shares of stock in the Company. The Company did not record derivative liability pertaining to this note because the conversion price is greater than the fair market stock price as of September 30, 2016.

 

On March 22, 2015, the Company entered into a convertible promissory note with Chip Spear in the amount of $10,000 with an interest rate of 10% per annum. The note is convertible into common shares of the Company at a fixed conversion price of $0.25 per share. As of September 30, 2016, no principal has been converted into shares of stock in the Company. The Company did not record derivative liability pertaining to this note because the conversion price is greater than the fair market stock price as of September 30, 2016.

 

On April 20, 2015, the Company entered into a convertible promissory note with Casey Saunders in the amount of $10,000 with an interest rate of 20% per annum. The note was paid off personally by Sylvain Desrosiers on 12/16/2015. The note remains to be convertible into common shares of the Company at a fixed conversion price of $0.25 per share. As of September 30, 2016, no principal has been converted into shares of stock in the Company. The Company did not record derivative liability pertaining to this note because the conversion price is greater than the fair market stock price as of September 30, 2016.

 

Notes payable to related parties

 

Beginning on December 31, 2008, Sylvain Desrosiers, CEO has loaned various sums to the company. These are recorded as a loan from related party. The note bears a 10% interest rate per annum and has no maturity date. As of September 30, 2016, there is a principal balance outstanding in the amount of $106,205 with accrued interest of $78,896.

 

Notes payable to non-related parties

 

On August 29, 2014, the Company entered into a promissory note agreement with Infinity International Holdings, LLC in the amount of $20,000 with a fixed interest payment of $20,000 interest due within 360 days.

 

The following table summarized the Company’s notes payable and convertible notes payable balances as of September 30, 2016 and December 31, 2015:

 

 

 

September 30,

2016

 

 

December 31,

2015

 

1. Convertible notes payable to related parties bearing interest at 10% - in default

 

$294,712

 

 

$294,712

 

2. Convertible notes payable to non-related parties bearing interest at 10%

 

 

390,000

 

 

 

375,000

 

3. Notes payable to related parties bearing interest at 10%

 

 

106,205

 

 

 

106,205

 

Totals

 

$790,917

 

 

$790,917

 

 

The Company had an accrued interest balance on the notes payable in the amount of $474,016 and $458,244 as of September 30, 2016 and December 31, 2015.

 

The convertible note holders may convert at any time to common shares at a per share price stipulated in their agreement.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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Conversion of Notes Payable

 

There were no conversions of debt in the period ended September 30, 2016 or December 31, 2015.

 

NOTE 9 - SHARE EXCHANGE AGREEMENT

 

On April 17, 2012, the Company issued 200,000,000 post reverse-split shares of common stock to the sole equity owner of Southern ITS Corporation for 100% of the issued and outstanding shares of capital stock in Southern ITS. This executed share exchange agreement resulted in Southern ITS Corporation becoming a wholly owned subsidiary of the Company.

 

Addendum to Share Exchange Agreement

 

On April 30, 2013, the Company entered into an addendum with Southern ITS to amend its previously executed share exchange agreement on April 17, 2012. The addendum includes a mutually agreed upon revaluation of the consideration paid to acquire SIC whereby the new valuation will be 400,000 post reverse-split shares instead of 4,000,000 post reverse-split shares of common stock. The Company returned the initial 4,000,000 post reverse-split shares from Southern ITS which they then canceled. The Company then issued a new certificate for 400,000 post reverse-split to the president of Southern ITS in September of 2013. The Company has restated its prior year comparative financial information to account for this revaluation.

 

On March 18, 2014, the company entered into an addendum with Southern ITS to amend its previous agreement and Southern ITS returned 400,000 post reverse-split shares of common stock to the treasury.

 

Goodwill

 

On April 17, 2012, Southern ITS had assets of $126,450, liabilities of $0, and retained earnings of $168,376. The share exchange agreement resulted in the Company recording goodwill of $1,973,550. This was calculated from taking the closing reverse-split stock price on the date of the share exchange agreement, $5.25 on April 17, 2013, times the amended consideration paid of 400,000 post reverse-split shares, minus assets received of $126,450. The Company later impaired the goodwill asset which is described in Note 9.

 

NOTE 10 - IMPAIRMENT OF GOODWILL

 

The Company’s stock exchange with Southern ITS resulted in the recording a goodwill in the amount of $1,973,550. At December 31, 2012 the Company’s test of goodwill resulted in the write off of $1,973,550 which was recorded in the statements of operations.

 

NOTE 11 - OFFICER AND RELATED PARTY TRANSACTIONS

 

Employment agreements with CFO/Treasurer

 

On August 31, 2014, the Company executed an employment agreement with its CFO and Treasurer, William Noll whereby the Company issued Mr. Noll 2,000,000 post reverse-split shares of common stock for five (5) years services. As of the date of the executed employment agreement, the value of the 2,000,000 post-reverse-split shares of common stock were valued at $0.06 per share which resulted in a valuation of $120,000.

 

Employment agreement with CEO

 

On August 31, 2014, the Company executed an employment agreement with its CEO, Sylvain Desrosiers, whereby the Company issued Mr. Desrosiers 10,000,000 post reverse-split shares of common stock for five (5) years services. As of the date of the executed employment agreement, the value of the 10,000,000 post-reverse-split shares of common stock were valued at $0.06 per share which resulted in a valuation of $600,000.

 

Convertible Notes Payable- Related Parties

 

As of September 30, 2016 and December 31, 2015, the Company has convertible notes payable with one related party company which is 100% owned by our chief executive officer. The notes have an interest rate of 10% and are convertible into shares of the Company at a fixed conversion rate of $0.025 per share. The convertible notes payable to related parties balance at September 30, 2016 and December 31, 2015 was $256,891. The noteholder may convert to common shares at a fixed price of $0.025 per share.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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Notes Payable to Related Parties

 

As of September 30, 2016 and December 31, 2015, the Company has a note payable with an officer of the Company. The note bears an interest rate of 10%. The balances are $106,205 and $106,205, respectively.

 

Stock issued to Officers

 

In September of 2013, the Company issued 400,000 post reverse-split common shares and 5,000,000 preferred shares to Sylvain Desrosiers for services completed by December 31, 2013. Mr. Desrosiers is a Director of the Company.

 

In September of 2014, the Company issued 12,000,000 post reverse-split shares of common stock - 2,000,000 to our CFO and 10,000,000 to our CEO, for past services in lieu of compensation. On July 1, 2015, the Company also issued to them separate five (5) year employment agreements for executive services to be provided.

 

Addendum to Share Exchange Agreement

 

On April 30, 2013, the Company entered into an addendum with Southern ITS to amend its previously executed share exchange agreement. The addendum includes a mutually agreed upon revaluation of the consideration paid to acquire Southern ITS, whereby the new valuation will be 400,000 post reverse-split shares. The Company was returned the initial 400,000 post reverse-split shares from Jason Bell who is the President of the Company and previous sole shareholder of Southern ITS. The 4,000,000 post reverse-split shares were then canceled and Mr. Bell was issued a new certificate for 400,000 post reverse-split common shares. This agreement was reversed on March 18, 2014 and Mr. Bell returned the 400,000 post reverse-split common shares to the treasury.

 

Cancelled Shares

 

In the year ended December 31, 2014, the Company cancelled 4,000,000 post reverse-split outstanding common shares to an officer of the Company for failing to provide contracted services.

 

NOTE 12 - STOCKHOLDERS’ EQUITY

 

Common and preferred stock authorized

 

On April 15, 2014, the Company amended its articles of incorporation to decrease its authorized shares of common stock from Five Hundred Million (500,000,000) shares to Two Hundred Fifty Million (250,000,000) shares with par value of $0.001. On August 15, 2014, the Company amended its articles of incorporation to decrease its authorized shares of common stock from Two Hundred Fifty Million (250,000,000) shares to Fifty Million (50,000,000) shares, with a par value of $0.001.

 

The Company remains to have Ten Million (10,000,000) preferred shares with a par value of $0.001 authorized. The Company designated 10,000,000 Series A Preferred Stock which have preferred voting rights equal to 500 votes for each 1 preferred share.

 

Common and preferred stock issued

 

On August 4, 2014, the Company enacted a 1-for-50 reverse stock split. The Company has adjusted all periods presented for the effects of the stock split.

 

For the year ended December 31, 2013, the Company issued 5,000,000 preferred shares and 400,000 post reverse- split common shares to a director of the Company for services completed prior to December 31, 2013. The Company valued the preferred shares at par $0.001, which resulted in an expense of $5,000. The Company valued the 400,000 post reverse-split common shares at the closing stock price on the date of issuance, September 3, 2013 at $0.11, which resulted in an expense of $44,000. The Company also issued 400,000 post reverse-split common shares to Jason Bell, the President of Company, pursuant to the addendum to the Share Exchange Agreement described in Note 9.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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At December 31, 2013, the Company had 3,764,348 post reverse-split common shares outstanding and had 5,000,000 preferred shares outstanding.

 

In the year ended December 31, 2014, the Company cancelled 400,000 post reverse-split shares of common stock to an officer of the Company for failing to provide contracted services. The Company also issued 3,100,000 post reverse-split shares of common stock for the reduction of $1,600 of notes payable and $1,600 of accrued interest on convertible notes payable. The Company also issued 12,000,000 post reverse-split shares of common stock, 2,000,000 to our CFO and 10,000,000 to our CEO, pursuant to separate five (5) year employment agreements for executive services to be provided. The 12,000,000 post reverse-split shares were valued at the date of the agreement, $0.06, which resulted in an expense of $720,000 being recognized over the life of the employment agreements with the unearned portion recorded as a prepaid expense.

 

On November 17, 2015, the company issued 1,750,000 shares of restricted common stock to JJMJ Consulting. This was done in accordance with their consulting agreement. This brought the total of outstanding shares as of 12/31/2015 to 20,884,708.

 

Stock Warrants

 

Included in one of our outstanding convertible notes payable are warrants to purchase our stock. They are as follows,

 

Warrant 1: 1,000,000 warrants to purchase our stock at an exercise price of $0.05 per share with a 10-year life from May 1, 2010, expiring May 1, 2020.

 

Warrants

Exercisable

December 31,

2015

 

 

Exercise

Price ($) per

Share

 

Weighted

Average

Remaining

Contractual

Life

 

Exercised

Warrants

 

 

Warrants

Exercisable

September 30,

2016

 

 

1,000,000

 

 

($0.05)

 

4.75 years

 

 

-

 

 

 

1,000,000

 

 

NOTE 13 - CONTINGENCIES

 

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. Southern ITS International has no pending or threatened legal proceedings or administrative actions either by or against the issuer that could have a material effect on the issuer’s business, financial condition, or operations and any current, past, or pending trading suspensions by a securities regulator.

 

NOTE 14 - SUBSEQUENT EVENTS

 

On June 16, 2015 Southern ITS signed a surveillance system installation contract with a privately owned Casino Resort, located in the state of Mississippi. The currently stipulated contract amount is $1.5 million. Management feels that the final contract amount will potentially be higher, after system change orders are received during the project. The preliminary work on the project was begun in late June 2015, but management did not bill for any work until July. Revenues and costs of the project will be reported using the construction percentage of completion method, in the coming months.

 

Management is contesting certain trade accounts payable of approximately $125,000, due to poor and non- performance of certain vendors. The full amounts have been reported as payables, but management will keep trying to reduce and resolve the outstanding balances.

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no additional material subsequent events exist at the time of this report.

 

Neither the financial statements nor the notes have been reviewed by our auditors.

 

 
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FORWARD-LOOKING STATEMENTS

 

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have not generated any revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

 

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

 

Results of Operations

 

For nine months ended September 30, 2016, compared to nine months ended September 30, 2015.

 

The Company had revenues of $409,057 for the nine months ended September 30, 2016, compared to $727,680 for the nine months ended September 30, 2015. Our costs of services were $88,016 and $464,689 for the periods ended September 30, 2016 and September 30, 2015, respectively.

 

Our operating expenses were $238,046 in the nine months ended September 30, 2016, and consisted of profession fees of $1,500, wages of $90,742 and general and administrative expenses of $145,804. In the nine months ended September 30, 2015, our operating expenses were $247,951, and consisted of wages of $45,196, consulting fees of $32,074, professional fees of $5,130, and general and administrative expenses of $165,551.

 

Our interest expense was $23,658 for the nine months ended September 30, 2016 compared to $34,415 in the nine months ended September 30, 2015.

 

Our net profit for the nine months ended September 30, 2016, was $59,337 compared to a net loss of $19,375 for nine months ended September 30, 2015.

 

As of September 30, 2016 and December 31, 2015, the number of shares outstanding was 20,884,708.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of September 30, 2016 and December 31, 2015, our total assets were $54,469 and $29,796, respectively.

 

As of September 30, 2016, and December 31, 2015, our total liabilities were $3,040,042 and $3,042,052, respectively.

 

Cash Flows from Operating Activities

 

We generated positive cash flows from operating activities of $25,297 for the nine months ended September 30, 2016. Cash flows used in operating activities for the nine months ended September 30, 2015 were $14,867.

 

 
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Cash Flows from Investing Activities

 

We have not generated cash flows from investing activities for the nine months ended September 30, 2016, and 2015.

 

Cash Flows from Financing Activities

 

We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the nine months ended June 30, 2016 and September 30, 2015, we had no cash flows from financing activities.

 

We had $15,178 in cash as of December 31, 2015 and $40,475 as of September 30, 2016 for an increase of $25.297 in cash for the nine months ended September 30, 2016.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not required for smaller reporting companies.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives.

 

Our management, with the participation of our CEO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Report. Based upon this evaluation, our CEO concluded that our disclosure controls and procedures were not effective because of the identification of a material weakness in our internal control over financial reporting which is described below.

 

Management’s Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. GAAP.

 

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

 
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Our management assessed the effectiveness of our internal control over financial reporting as of September 30, 2016. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on this evaluation, management concluded that that our internal control over financial reporting was not effective as of September 30, 2016. Our CEO concluded we have a material weakness due to lack of segregation of duties, a limited corporate governance structure, and a lack of a formal management review process over preparation of financial information. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

 

Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our system of internal control. Therefore, while there are some compensating controls in place, it is difficult to ensure effective segregation of accounting and financial reporting duties. Management reported the following material weaknesses:

 

 

·

Lack of segregation of duties in certain accounting and financial reporting processes including the initiation, processing, recording and approval of disbursements;

 

 

·

Our corporate governance responsibilities are performed by the Board of Directors, none of whom are independent under applicable standards; we do not have an audit committee or compensation committee. Our Board of Directors acts primarily by written consent without meetings which results in several of our corporate governance functions not being performed concurrent (or timely) with the underlying transactions, including evaluation of the application of accounting principles and disclosures relating to those transactions; and

 

 

·

Certain reports that we prepare and accounting and reporting conclusions reached in connection with the financial statement preparation process are not subjected to a formal review process that includes multiple levels of review and are not submitted timely to the Board of Directors for review or approval.

 

While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full-time staff. We believe that this is typical in many development stage companies. We may not be able to fully remediate the material weakness until we commence mining operations at which time we would expect to hire more staff. We will continue to monitor and assess the costs and benefits of additional staffing.

 

This Quarterly does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the SEC rules that permit us to provide only management’s report in this Quarterly Report.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.

 

Item 1A. Risk Factors.

 

Not required for smaller reporting companies.

 

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

 

During the nine months ended September 30, 2016, we had no sales of unregistered equity securities.

 

Item 3. Defaults Upon Senior Securities.

 

During the nine months ended September 30, 2016, there were no defaults on our senior securities.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

 
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Item 6. Exhibits.

 

EXHIBIT SCHEDULE

Exhibit

Number

 

Document Description

(1)

3.1

 

Articles of Incorporation.

(1)

3.2

 

Bylaws

(1)

3.3

 

Amendment to Articles of Incorporation

(1)

3.4

 

Certificate of Designation

#

31.1

 

Certification of the Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

#

31.2

 

Certification of the Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

##

32.1

 

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

#

101

 

The following financial information from the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Stockholders’ Equity; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements.

 

(1)

Incorporated by reference from the Company’s Registration Statement on Form 10 filed with the SEC on April 13, 2015.

#

Filed herewith.

##

Furnished, not filed.

 

 
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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on January 11, 2024. 

 

SOUTHERN ITS INTERNATIONAL, INC.

 

 

 

By:

/s/ James E. Shipley

 

James E. Shipley

 

 

President and Chief Executive Officer

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on January 11, 2024.

 

Signature

 

Title

 

/s/ James E. Shipley

 

President, Chief Executive Officer, Treasurer, Secretary, and Director (Principal Executive

Officer and Principal Accounting Officer)

James E. Shipley

 

 

 

EX-31.1 2 sitsf_ex311.htm CERTIFICATION sitsf_ex311.htm

EXHIBIT 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, James E. Shipley, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Southern ITS International, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

 

(c) 

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

 

(d) 

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

January 11, 2024

 

/s/ James E. Shipley

 

 

James E. Shipley

President and Chief Executive Officer

 

 

EX-31.2 3 sitsf_ex312.htm CERTIFICATION sitsf_ex312.htm

EXHIBIT 31.2

 

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, James E. Shipley, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Southern ITS International, Inc..;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and 

 

(b) 

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

January 11, 2024

 

/s/ James E. Shipley

 

 

James E. Shipley

Chief Financial Officer and

Principal Accounting Officer

EX-32.1 4 sitsf_ex321.htm CERTIFICATION sitsf_ex321.htm

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Southern ITS International, Inc. (the “Company”) on Form 10-Q for the nine months ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers of the Company, each certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

January 11, 2024

 

/s/ James E. Shipley

 

 

 

James E. Shipley

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

/s/ James E. Shipley

 

 

 

James E. Shipley

 

 

 

Chief Financial Officer

 

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

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Issued 20,884,708 & 20,884,708 shares Paid-In Capital Deficit Accumulated During Development Stage Total Stockholders' Equity [Stockholders' Equity Attributable to Parent] Total Liabilities and Stockholders' Equity [Liabilities and Equity] Preferred stock, par value Preferred stock, shares authorized Preferred Stock, shares issued Preferred Stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Revenues Costs of Services Gross Margin [Gross Profit] Operating Expenses: Consulting Professional Fees Wages General and Administrative Total Operating Expenses [Operating Expenses] Operating Income (Loss) [Operating Income (Loss)] Other Income (Expense): Interest Expense [Interest Expense] Derivative Expense Interest Income Total Other Income (Expense) [Other Nonoperating Income (Expense)] Net Income (Loss) Before Taxes [Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest] Income Tax Provision Net Income (Loss) [Net Income (Loss) Attributable to Parent] Loss per Share, Basic & Diluted Weighted Average Shares Outstanding CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT) (Unaudited) Statement [Table] Statement [Line Items] Equity Components [Axis] Common Stock Common Stock Issuable Additional Paid In Capital Accumulated Deficit Preferred Stock Balance, shares [Shares, Issued] Balance, amount Net Loss Inception (March 26, 2008) to 12/31/2008 Stock issued at inception, shares Stock issued at inception, amount Net Loss for year ended December 31, 2009 Stock issued for services, shares Stock issued for services, amount Stock issued for debt reduction, shares Stock issued for debt reduction, amount Stock issued pursuant to share exchange- addendum was later executed on April 30, 2013, shares Stock issued pursuant to share exchange- addendum was later executed on April 30, 2013, amount Stock issuable pursuant to addendum to share exchange agreement Stock cancelled per addendum to share exchange agreement, shares Stock cancelled per addendum to share exchange agreement, amount Stock issued per addendum to share exchange agreement, shares Stock issued per addendum to share exchange agreement, amount Preferred stock for services, shares Preferred stock for services, amount Stock cancelled J. Bell per agreement, shares Stock cancelled J. Bell per agreement, amount Reverse split (50 to 1) adjustment, shares Reverse split (50 to 1) adjustment, amount Net Gain for 9 months ended Sept. 30, 2016 Balance, shares Balance, amount CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) for the Period [Net Income (Loss), Including Portion Attributable to Noncontrolling Interest] Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Stock issued for services Bad Debts Changes in Operating Assets and Liabilities Increase in accounts payable & accrued expenses Increase in Advance to Related Party [Increase in Advance to Related Party] Increase in Note Receivable Increase in Interest Receivable Decrease in Prepaid Expenses [Increase (Decrease) in Prepaid Expense] Increase in accrued interest Accrued Expenses Increase (decrease) in accounts receivable, net Derivative expense Net Cash Used in Operating Activities [Net Cash Provided by (Used in) Operating Activities] CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible notes to related party Payments on note payable to related party Proceeds from note payable Net Cash Provided by Financing Activities [Net Cash Provided by (Used in) Financing Activities] Net (Decrease) Increase in Cash [Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect] Cash at Beginning of Period Cash at End of Period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest Franchise and Income Taxes SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Accounts Payable Satisfied through Contributed Capital and Property and Equipment NATURE AND DESCRIPTION OF BUSINESS NATURE AND DESCRIPTION OF BUSINESS Business Description and Basis of Presentation [Text Block] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies [Text Block] GOING CONCERN GOING CONCERN Substantial Doubt about Going Concern [Text Block] REVERSE STOCK SPLIT REVERSE STOCK SPLIT [REVERSE STOCK SPLIT] PREPAIDS PREPAIDS [PREPAIDS] ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE Accounts and Nontrade Receivable [Text Block] FIXED ASSETS FIXED ASSETS Property, Plant and Equipment Disclosure [Text Block] NOTES PAYABLE NOTES PAYABLE Debt Disclosure [Text Block] SHARE EXCHANGE AGREEMENT SHARE EXCHANGE AGREEMENT [SHARE EXCHANGE AGREEMENT] IMPAIRMENT OF GOODWILL IMPAIRMENT OF GOODWILL Asset Impairment Charges [Text Block] OFFICER AND RELATED PARTY TRANSACTIONS OFFICER AND RELATED PARTY TRANSACTIONS Related Party Transactions Disclosure [Text Block] STOCKHOLDERS EQUITY STOCKHOLDERS' EQUITY CONTINGENCIES CONTINGENCIES Commitments and Contingencies Disclosure [Text Block] SUBSEQUENT EVENTS SUBSEQUENT EVENTS Subsequent Events [Text Block] Basis of Presentation Restatement of Financial Statements Basis of Consolidation Use of Estimates Cash and cash equivalents Allowance for Doubtful Accounts Fair Value of Financial Instruments Property and Equipment Intangible Assets Long Lived Assets Revenue Recognition Risks and uncertainties Segment information Share based payments Earnings per share Income Taxes Subsequent events Recent Accounting Pronouncements Schedule of accounts receivable Schedule of Fixed Assets Schedule Of Notes Payable And Convertible Notes Payable Schedule of Stock Warrants Statement Class Of Stock Axis Plan Name Axis Series A Preferred Stock [Member] Amended Articles of Incorporation [Member] Common stock, shares authorized Common stock, shares authorized decrease Common stock, par value Stock split, Conversion ratio Preferred stock, shares authorized [Preferred Units, Authorized] Preferred stock, par value Voting rights description Range [Axis] Maximum [Member] Minimum [Member] Allowance for doubtful accounts Estimated useful life Estimated useful life [Estimated useful life] Accumulated deficit Reverse stock split description Post reverse stock split share of common stock par value Post reverse-split, common shares issued Post reverse-split, common shares outstanding Prior reverse-split, common shares outstanding Stock split, Conversion ratio Prepaid items Accounts Receivable Less: Allowance for Doubtful Accounts Total Bad debt expense Allowance for doubtful accounts Accounts Receivable Furniture and Equipment Fixed Assets, net Depreciation expense Convertible notes payable to related parties bearing interest at 10% - in default Convertible notes payable to non-related parties bearing interest at 10% - Marflu in default Notes payable to related parties bearing interest at 10% Totals Related Party Transactions By Related Party Axis Related Party Transaction Axis Katherine Loren Armagnac [Member] Convertible Notes Payable to Non Related Parties [Member] Convertible notes payable to related parties [Member] Notes Payable To Related Parties [Member] Marflu S.A. [Member] Convertible Notes Payable to Non Related Parties [Member] [Convertible Notes Payable to Non Related Parties [Member]] Steven R. 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