VARIABLE INTEREST ENTITIES (VIEs)

3 Months Ended

Mar. 31, 2020

11.VARIABLE INTEREST ENTITIES

A company is deemed to be the primary beneficiary of a VIE and must consolidate the entity if the company has both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company has concluded that First Cloud is a VIE and that it is the primary beneficiary as it has the power to direct the activities of First Cloud and has an economic interest that will absorb the losses and/or receive benefits that could be significant to the VIE. Accordingly, the Company consolidates the assets and liabilities and operating results of First Cloud in the condensed consolidated financial statements. The Company recognizes noncontrolling interest in the consolidated balance sheets. The income or loss allocations reflected on the condensed consolidated statements of comprehensive income (loss) may create volatility in the reported results of operations, including net losses attributable to common stockholders.

The financial information of First Cloud is presented below.


	March 31, 2020	December 31, 2019
Assets
Cash	$ 371	$ 424
Accounts Receivable	4	-
Prepaids and other assets	45	2
Total assets	$ 420	$ 426

Liabilities & Equity
Membership interests payable	10	45
Accounts payable	5	15
Total liabilities	15	60
Equity
Members equity	562	474
Accumulated deficit	(157)	(108)
Total equity	405	366
Total liabilities & equity	$ 420	$ 426

	Three Months Ended March 31,
	2020	2019
Revenues	$ 37	$ -
Expenses	86	-
Net loss	$ (49)	$ -