VARIABLE INTEREST ENTITIES (VIEs)

6 Months Ended

Jun. 30, 2020

VARIABLE INTEREST ENTITIES (VIEs)

VARIABLE INTEREST ENTITIES (VIEs)

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 condensed 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.

	June 30, 2020	December 31, 2019
Assets
Cash	$ 320	$ 424
Accounts Receivable	24	-
Prepaids and other assets	42	2
Total assets	$ 386	$ 426
Liabilities & Equity
Membership interests payable	37	45
Accounts payable	3	15
Total liabilities	40	60
Total equity	346	366
Total liabilities & equity	$ 386	$ 426
	Six Months Ended June 30,
	2020	2019
Revenues	$ 78	$ -
Expenses	205	-
Net loss	$ (127)	$ -