UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period end
For the transition period from __________ to __________
Commission File Number: None
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices, including Zip Code)
(Issuer’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Check
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: shares of common stock as of August 13, 2021.
Virtual Interactive Technologies Corp.
Index
| 2 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Balance Sheets
As of June 30, 2021 and September 30, 2020
(UNAUDITED)
| June 30, | September 30, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Royalties receivable | ||||||||
| Interest receivable | ||||||||
| Notes receivable | ||||||||
| Convertible note receivable | - | |||||||
| Total current assets | $ | $ | ||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accounts payable, related party | ||||||||
| Notes payable | ||||||||
| Interest payable | ||||||||
| Total current liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Note payable, related party | ||||||||
| Interest payable, related party | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | - | - | ||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Series A Preferred Stock, $ par value; authorized; shares issued and outstanding | ||||||||
| Series B Convertible Preferred Stock $ par value; authorized; shares issued and outstanding | ||||||||
| Common stock, $ par value; shares authorized, shares issued and outstanding | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Statements of Operations
For the three and nine months ended June 30, 2021 and 2020
(UNAUDITED)
| For the three months ended, | For the nine months ended, | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue - royalties | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General, administrative and selling | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||
| Interest expense, related party | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Bad debt expense | ||||||||||||||||
| Gain (loss) from foreign currency transactions | ( | ) | ||||||||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income (loss) per share attributable to common shareholders - Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares outstanding - Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
(UNAUDITED)
For the three months ended June 30, 2021
| Preferred Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||
| Series A Convertible | Series B Convertible | Common Stock | Additional | Total Stockholders’ | ||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Shares | Par Value | Paid-In Capital | Accumulated Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
For the three months ended June 30, 2020
| Preferred Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||
| Series A Convertible | Series B Convertible | Common Stock | Additional | Total Stockholders’ | ||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Shares | Par Value | Paid-In Capital | Accumulated Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, March 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, June 30, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
For the nine months ended June 30, 2021
Preferred Stock Series A | Preferred Stock Series B | Common Stock | Additional Paid-In Capital | Accumulated | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||
| Balance, September 30, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
For the nine months ended June 30, 2020
| Preferred Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||
| Series A Convertible | Series B Convertible | Common Stock | Additional | Total Stockholders’ | ||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Shares | Par Value | Paid-In Capital | Accumulated Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, September 30, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Stock issued for notes payable, related party | - | - | ||||||||||||||||||||||||||||||||||
| Stock issued for accrued interest payable, related party | - | - | ||||||||||||||||||||||||||||||||||
| Stock issued for notes payable | - | - | ||||||||||||||||||||||||||||||||||
| Stock issued for accrued interest payable | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, June 30, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
Virtual Interactive Technologies Corp.
Condensed Consolidated Statements of Cash flows
For the Nine Months Ended June 30, 2021 and 2020
(UNAUDITED)
| For the nine months ended, | ||||||||
| June 30, | June 30, | |||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Gain on extinguishment of debt Changes in operating assets and operating liabilities: | ( | ) | ||||||
| Other assets | ||||||||
| Royalty receivable | ||||||||
| Accrued interest note receivable | ( | ) | ( | ) | ||||
| Accounts payable, related parties | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Accrued interest payable, related parties | ||||||||
| Accrued interest payable | ||||||||
| Net cash provided by operating activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Sale of land | ||||||||
| Advances to convertible note receivable | ( | ) | ||||||
| Advances to related parties | ( | ) | ||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payment to notes payable | ( | ) | ||||||
| Payment to notes payable, related parties | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash Investing and Financing Activities: | ||||||||
| Stock issued for note payable, related parties | $ | $ | ||||||
| Stock issued for accrued interest, related parties | $ | $ | ||||||
| Stock issued for note payable | $ | $ | ||||||
| Stock issued for accrued interest | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
VIRTUAL INTERACTIVE TECHNOLOGIES CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
For the Three and Nine Months Ended
June 30, 2021
Note 1. Basis of Presentation and Consolidation
While the information presented in the accompanying June 30, 2021 financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company’s September 30, 2020 audited financial statements (and notes thereto). Operating results for the three and nine months ended June 30, 2021 are not necessarily indicative of the results that can be expected for the year ending September 30, 2021.
The accompanying unaudited condensed consolidated financial statements herein contain the operations of Virtual Interactive Technologies Corp (“VIT”), and its wholly-owned subsidiaries Advanced Interactive Gaming Inc. (“AIG Inc.”) and Advanced Interactive Gaming Ltd. (“AIG Ltd”) (collectively, the “Company”). All significant intercompany amounts have been eliminated.
Note 2. Business
Nature of Operations
Virtual Interactive Technologies Corp. was incorporated in Nevada on November 3, 2011 under the name Mascota Resources Corp.
On November 25, 2019 the following became effective on the over-the-counter market
| ● | a
| |
| ● | the Company’s name was changed to Virtual Interactive Technologies Corp. |
On September 27, 2019, Virtual Interactive Technologies Corp merged with Advanced Interactive Gaming Inc, and its subsidiary Advanced Interactive Gaming Ltd. (collectively “Advanced Interactive Gaming” or “AIG”), through a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide financing solutions for independent video game developers globally. Advanced Interactive Gaming was deemed to be the accounting acquirer of the transaction and will be the operating entity moving forward under the name of Virtual Interactive Technologies Corp (“VIT,” “the Company” or “we”).
VIT finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the games. To date the Company has financed several gaming titles including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release and Worbital. Collectively these games are distributed world-wide on various gaming platforms including Sony PlayStation, Xbox, Steam and Oculus among others. In addition to financing solutions, VIT offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VIT continues to reinvest its royalty income into growing its royalty contracts and intellectual property in the video game development industry.
The Company’s strategy moving forward is to continue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the relatively early stage in the product cycle and the growing need for content to support VR hardware sales. While the Company has historically participated mostly in the PC and console market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VIT may explore strategic alliances and acquisitions in order to expand its business.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
Cash Equivalents
The
Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. The
Company had
| 7 |
Fair Value of Financial Instruments
The Company accounts for fair value measurements in accordance with accounting standard ASC 820-10-50, “Fair Value Measurements.” ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
| - | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| - | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
| - | Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |
The Company’s financial instruments consist of cash, royalties receivable, notes receivable and related accrued interest receivable, accounts payable and accrued expenses, and notes payable. The carrying value of these financial instruments approximates fair value due to the short-term nature of the instruments.
Royalties Receivable
The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change and that losses ultimately incurred could differ materially from the amounts estimated in determining the allowance. The Company has determined that no allowance is necessary as of June 30, 2021 or September 30, 2020.
In accordance with ASC 260 “Earnings per Share,” the basic net income (loss) per share (“EPS”) is computed by dividing the 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 is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding adjusted on an “if-converted” basis (for convertible preferred stock). As of June 30, 2021 and September 30, 2020, the Company had Series B Preferred stock issued and outstanding that was convertible into shares of common stock. These potentially dilutive securities were excluded from the EPS computation due to their anti-dilutive effect resulting from the Company’s net losses for the three and nine months ended June 30, 2021 and June 30, 2020.
Foreign Currency
The Company’s functional currency is the US dollar. With the exception of stockholders’ equity (deficit), all transactions that are originally denominated in foreign currency are translated to US dollars by our international customers, on a monthly basis, when recognized by them and prior to paying royalties to the Company. All royalty revenues that are received and recognized by the Company are recorded in US dollars.
The
Company has a Euro currency bank account located in Bermuda. This account is used for payments to vendors that bill the Company in a
currency other than US dollars and for funds received from shareholders located outside the United States. As of June 30, 2021 and September
30, 2020, the Euro account had a balance of $-
Foreign
currency translation gains/losses are recorded in other accumulated comprehensive income (“AOCI”) based exchange rates prevalent
on reporting dates for balance sheet items, and at weighted average exchange rates during the reporting period for the statement of operations.
Foreign currency transaction gains/losses are recorded as other expense in the period of settlement. No AOCI items were present during
the three months ended June 30, 2021 and 2020, as all financial statement items were denominated in the US dollar. Gains and losses from
foreign currency transactions during the three and nine months ended June 30, 2021 totaled $
| 8 |
Concentration of Credit Risk
Some
of our US dollar balances are held in a Bermuda bank that is not insured. As of June 30, 2021 and September 30, 2020, uninsured deposits
in the Bermuda bank totaled $
Revenue Recognition
The Company follows guidance contained in ASC 606, “Revenue Recognition.” The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 outlines the following five-step revenue recognition model (along with other guidance impacted by this standard): (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; (5) recognize revenue when or as the entity satisfies a performance obligation.
The Company has several contracts with video game developers that entitle us to royalty streams as a percentage of revenues generated by the game sales, which vary from contract to contract. As of June 30, 2021, the Company has four royalty contracts with three developers that are generating royalty revenue, and two royalty contracts for games that are in development.
Once a game has been developed and has met the terms of the underlying royalty agreement, the game is released for commercial sales. Per each contract, the Company will receive reports on a regular basis from the game developers’ sales platforms that identify the amount of game sales, from which consideration expected to be collected from the commercial customers is computed based on the applicable royalty percentages. Royalty revenue is based on a percentage of net receipts as defined in each customer agreement, and is recognized in accordance with the sale-based royalty provisions of ASC 606, which requires revenue recognition after the subsequent sales occur. The Company’s performance obligation under each royalty contract as an investor in the game is complete once funds are advanced to the gaming developer. Subsequent consideration is then received by the Company from the developers in the amount of the Company’s percentage fee of royalty income (net receipts) received by the customer. Net receipts include all gross revenues received by the customer as a result of sales of the games or related exploitation less certain taxes, refunds, manufacturing costs, freight, and other items specified in the underlying contract.
New Accounting Pronouncements
The Company has evaluated all other recently issued or enacted accounting pronouncements, and has determined that all such pronouncements either do not apply or their impact is insignificant to the financial statements.
COVID-19 Uncertainties
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
Note 3. Stockholders’ Equity (Deficit)
The Company’s common stock is quoted under the symbol “VRVR” on the OTC Pink tier operated by OTC Markets Group, Inc. To date, an active trading market for the Company’s common stock has not developed.
| 9 |
Preferred Stock
The
Company is authorized to issue each of Series A and B preferred shares at a par value of $, respectively. At June 30,
2021 and September 30, 2020, the Company had shares of Series A preferred stock and shares of Series B preferred stock
issued and outstanding.
Common Stock
The Company is authorized to issue shares of common stock at par value of $. At June 30, 2021 and September 30, 2020, the Company had shares of common stock issued and outstanding.
During the six months ended March 31, 2020, the Company issued shares of common stock as part of a payoff on notes payable and accrued interest. Of the shares issued, shares were issued to a related party for notes payable and accrued interest.
Note 4. Note Payable
On
March 20, 2019, an unrelated individual loaned VIT $.
The note carries a interest rate and was payable March 20, 2020.
The note has been amended to mature on . As of June 30, 2021 and September 30, 2020 the notes balance was $
| 10 |
Note 5. Related Party Transactions
During
the three and nine months ended June 30, 2021 the Company incurred $
During
the three and nine months ended June 30, 2021, the Company incurred $
Note Payable, Related Party
On
March 29, 2018, the Company issued a $
Note 6. Note Receivable
On
December 11, 2019, the Company issued a $
Note 7. Convertible Note Receivable
On
November 20, 2020, the Company invested $
Note 8. Subsequent Events
The Company has evaluated events subsequent to the balance sheet date through the date these financial statements were issued and determined that there are no events requiring disclosure.
| 11 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Cautionary Statement about Forward-Looking Statements
This Form 10-Q contains forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “hopes,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, and other characterizations of future events or circumstances are forward-looking statements.
The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.
EXECUTIVE OVERVIEW
On September 27, 2019, VIT merged with AIG Inc, and its subsidiary AIG Ltd. (collectively “Advanced Interactive Gaming” or “AIG”), through a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide financing solutions for independent video game developers globally. Advanced Interactive Gaming was deemed to be the accounting acquirer of the transaction and will be the operating entity moving forward under the name of Virtual Interactive Technologies Corp (“VIT” or “the Company” or “we”).
VIT finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the games. To date the Company financed several gaming titles including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release and Worbital. Collectively these games are distributed world-wide on various gaming platforms including Sony PlayStation, Xbox, Steam and Oculus among others. In addition to financing solutions, VIT offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VIT continues to reinvest its royalty income into growing its royalty contracts and intellectual property in the video game development industry.
The Company’s strategy moving forward is to continue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the relatively early stage in the product cycle and the growing need for content to support VR hardware sales. While the Company has historically participated mostly in the PC and console market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VIT may explore strategic alliances and acquisitions in order to expand its business.
Results of Operations
The following discussion involves the results of operations for the three and nine months ended June 30, 2021 and 2020.
Three Months Ended June 30, 2021 over June 30, 2020:
Revenue increased from $34,839 for the three months ended June 30, 2020 to $35,767 for the three months ended June 30, 2021. Revenue was derived from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition and Worbital.
| 12 |
Operating expense for the three months ended June 30, 2021 and 2020 was $48,352 and $76,906, respectively. This decrease is due to a significant decrease in general and administrative expenses, primarily attributable to the professional fees incurred in 2020 related to the merger that occurred at the end of the year ended September 31, 2019. In addition, the Company did not incur any research and development costs during the three months ended June 30, 2021. Of the $76,906 recorded as operating expenses in 2020, $5,477 was associated with research and development costs.
For the three months ended June 30, 2021 and June 30, 2020, we recorded a total Other Expense of $12,006 and $3,352, respectively. The primary expense for both periods presented is interest expense, related party.
For the three months ended June 30, 2021, we recorded a loss of $24,591. For the three months ended June 30, 2020, we recorded a loss of $45,419. The decrease of $20,828 was mainly associated with the decrease in contract outside services as discussed above.
Nine Months Ended June 30, 2021 over June 30, 2020:
Revenue increased from $111,821 for the nine months ended June 30, 2020 to $130,898 for the nine months ended June 30, 2021. Revenue was derived from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition and Worbital.
General and Administrative expense for the nine months ended June 30, 2021 and 2020 was $175,383 and $223,842, respectively. Decrease in expense is due to decrease in professional services incurred during 2021, as the Company did not engage in any business combinations during the 2021 period as they had done in the 2020 period.
Research and development expenses for the nine months ended June 30, 2021 and 2020 was $0 and $54,383, respectively. In 2021 the Company did not invest in new game development, but our continued strategy is to continue to invest in new game development through partnerships and royalty contracts.
For the nine months ended June 30, 2021 and June 30, 2020, we incurred other expenses of $35,428 and other income of $42,845, respectively. The difference of $78,273 is mainly due to the gain on extinguishment of debt recorded for the nine months ended June 30, 2020 totaling $77,118.
For the nine months ended June 30, 2021 we recorded a loss of $79,913. For the nine months ended June 30, 2020, we recorded a loss of $123,558 a decrease of 43%. The decrease of $43,646 was mainly associated with increased revenue in 2021 and decreased research and development costs as there were no games in development during the nine months ended June 30, 2021.
Liquidity and Capital Resources
As of June 30, 2021, we had cash and cash equivalents of $40,824. As of September 30, 2020, we had cash and cash equivalents of $36,244. Working capital was $162,926 at June 30, 2021 compared to $205,941 at September 30, 2020. The decrease in working capital of $43,015 was primarily the result of the Company collecting $66,912 on royalty receivables, offset by payments on accounts payable, related party of $5,994, and accounts payable and accrued liabilities of $4,970, offset by increases in interest payable of $448, advances to related parties of $7,500, interest on notes receivable of $1,301 and interest payable related party of $36,898.
Cash Flows from Operating Activities:
Net cash provided by operating activities for the nine months ended June 30, 2021 and June 30, 2020 was $12,080 and $18,890, respectively. The change over the two periods presented was $6,810.
Changes in operating activities for the nine months ended June 30, 2021 included increases in accrued interest notes receivable of $1,301, accounts payable and accrued liabilities of $4,970, royalty receivable of $66,912, and accounts payable, related parties of $5,994; offset by decreases in accrued interest payable, related parties of $36,898, and accrued interest payable of $448.
For the nine months ended June 30, 2020 we recorded non-cash transactions of $77,118. Changes in operating activities for the nine months ended June 30, 2020 included increases in accounts payable related parties of $70,000, and accrued interest payable, related parties of $36,772, accrued interest payable of $266 and interest receivable of $1,208; offset by decreases in other assets of $2,660, royalty receivable of $132,664, and accounts payable and accrued liabilities of $21,587.
Cash Flows from Investing Activities:
Net cash used in investing activities for the nine months ended June 30, 2021 was $7,500. Net cash provided by investing activities for the nine months ended June 30, 2020 was $11,195. During the nine months ended June 30, 2021, the Company advanced money in the form of a convertible note receivable in the amount of $7,500. During the nine months ended June 30, 2020, the Company advanced $25,000 to a related party as well as sold its land for $36,195.
Cash Flows from Financing Activities:
Net cash used in financing activities for the nine months ended June 30, 2021 and June 30, 2020 was $0 and $36,000, respectively. During the nine months ended June 30, 2020, the Company paid down $32,000 of notes payable and $4,000 notes payable, related party.
| 13 |
| ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2021. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive and Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, our Chief Executive and Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the three months ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
| Item 6. | Exhibits |
Exhibits
(1) Incorporated by reference to the same exhibit filed with the Company’s registration statement on Form S-1 (File #333-190265).
* Provided herewith
| 14 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the 13th day of August 2021.
| VIRTUAL INTERACTIVE TECHNOLGIES CORP. | ||
| By: | /s/ Jason D. Garber | |
| Jason D. Garber | ||
| Principal Executive Officer | ||
| By: | /s/ Janelle Gladstone | |
| Janelle Gladstone | ||
| Principal Financial and Accounting Officer | ||
| 15 |
Exhibit 31.1
CERTIFICATION
I, Jason D. Garber, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Virtual Interactive Technologies Corp.; | |
| 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 quarterly 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. |
| August 13, 2021 | /s/ Jason D. Garber |
| Jason D. Garber | |
| Principal Executive Officer |
Exhibit 31.2
CERTIFICATIONS
I, Janelle Gladstone, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Virtual Interactive Technologies Corp.; | |
| 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 quarterly 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. |
| August 13, 2021 | /s/ Janelle Gladstone |
| Janelle Gladstone | |
| Principal Financial Officer |
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 on Form 10-Q for the period ending June 30, 2021 of Virtual Interactive Technologies Corp., a Nevada corporation (the “Company”), as filed with the Securities and Exchange Commission (the “Quarterly Report”), Jason D. Garber, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
| 1. | This Quarterly Report fully complies with the requirements of Section 13(a) or15(d) of the Securities and Exchange Act of 1934, as amended; and | |
| 2. | The information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
| August 13, 2021 | |
| /s/ Jason D. Garber | |
| Jason D. Garber | |
| Principal Executive Officer |
Exhibit 32.2
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 on Form 10-Q for the period ending June 30, 2021 of Virtual Interactive Technologies Corp., a Nevada corporation (the “Company”), as filed with the Securities and Exchange Commission (the “Quarterly Report”), Janelle Gladstone, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
| 1. | This Quarterly Report fully complies with the requirements of Section 13(a) or15(d) of the Securities and Exchange Act of 1934, as amended; and | |
| 2. | The information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
| August 13, 2021 | |
| /s/ Janelle Gladstone | |
| Janelle Gladstone | |
| Principal Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2021 |
Sep. 30, 2020 |
|---|---|---|
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 90,000,000 | 90,000,000 |
| Common stock, shares issued | 6,817,784 | 6,817,784 |
| Common stock, shares outstanding | 6,817,784 | 6,817,784 |
| Series A Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.01 | $ 0.01 |
| Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred stock, shares issued | 50,000 | 50,000 |
| Preferred stock, shares outstanding | 50,000 | 50,000 |
| Series B Convertible Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.01 | $ 0.01 |
| Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred stock, shares issued | 595,612 | 595,612 |
| Preferred stock, shares outstanding | 595,612 | 595,612 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Income Statement [Abstract] | ||||
| Revenue - royalties | $ 35,767 | $ 34,839 | $ 130,898 | $ 111,821 |
| Operating expenses: | ||||
| General, administrative and selling | 48,352 | 71,429 | 175,383 | 223,842 |
| Research and development | 5,477 | 54,383 | ||
| Total operating expenses | 48,352 | 76,906 | 175,383 | 278,225 |
| Income (loss) from operations | (12,585) | (42,067) | (44,485) | (166,404) |
| Other income (expense) | ||||
| Other income | 449 | 378 | 1,300 | 2,751 |
| Gain on extinguishment of debt | 77,118 | |||
| Interest expense, related party | (12,300) | (13,211) | (36,899) | (36,800) |
| Interest expense | (150) | (31) | (449) | (433) |
| Bad debt expense | 8,970 | |||
| Gain (loss) from foreign currency transactions | (5) | 542 | 620 | 209 |
| Total other income (expense) | (12,006) | (3,352) | (35,428) | 42,845 |
| Net income (loss) | $ (24,591) | $ (45,419) | $ (79,913) | $ (123,558) |
| Income (loss) per share attributable to common shareholders - Basic and Diluted | $ (0.00) | $ (0.01) | $ (0.01) | $ (0.02) |
| Weighted average number of shares outstanding - Basic and Diluted | 6,817,784 | 6,817,784 | 6,817,784 | 6,817,752 |
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) |
Preferred Stock Series A Convertible [Member] |
Preferred Stock Series B Convertible [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|
| Beginning balance, shares at Sep. 30, 2019 | 50,000 | 595,612 | 6,817,484 | |||
| Stock issued for notes payable, related party | $ 131 | $ 131 | ||||
| Stock issued for notes payable, related party, shares | 94 | |||||
| Stock issued for accrued interest payable, related party | 8 | 8 | ||||
| Stock issued for accrued interest payable, related party, shares | 6 | |||||
| Stock issued for notes payable | 202 | 202 | ||||
| Stock issued for notes payable, shares | 144 | |||||
| Stock issued for accrued interest payable | 78 | 78 | ||||
| Stock issued for accrued interest payable, shares | 56 | |||||
| Net loss | (123,558) | (123,558) | ||||
| Ending balance, value at Jun. 30, 2020 | $ 500 | $ 5,956 | $ 6,817 | 4,313,430 | (5,133,791) | (807,088) |
| Ending balance, shares at Jun. 30, 2020 | 50,000 | 595,612 | 6,817,784 | |||
| Beginning balance, value at Sep. 30, 2019 | $ 500 | $ 5,956 | $ 6,817 | 4,313,011 | (5,010,232) | (683,948) |
| Ending balance, value at Jun. 30, 2020 | 500 | 5,956 | 6,817 | 4,313,430 | (5,133,790) | (807,087) |
| Beginning balance, value at Mar. 31, 2020 | $ 500 | $ 5,956 | $ 6,817 | 4,313,430 | (5,088,372) | (761,669) |
| Beginning balance, shares at Mar. 31, 2020 | 50,000 | 595,612 | 6,817,784 | |||
| Net loss | (45,419) | (45,419) | ||||
| Ending balance, value at Jun. 30, 2020 | $ 500 | $ 5,956 | $ 6,817 | 4,313,430 | (5,133,791) | (807,088) |
| Ending balance, shares at Jun. 30, 2020 | 50,000 | 595,612 | 6,817,784 | |||
| Ending balance, value at Jun. 30, 2020 | $ 500 | $ 5,956 | $ 6,817 | 4,313,430 | (5,133,790) | (807,087) |
| Beginning balance, value at Sep. 30, 2020 | $ 500 | $ 5,956 | $ 6,817 | 4,353,430 | (5,020,055) | (653,352) |
| Beginning balance, shares at Sep. 30, 2020 | 50,000 | 595,612 | 6,817,784 | |||
| Net loss | (79,913) | (79,913) | ||||
| Ending balance, value at Jun. 30, 2021 | $ 500 | $ 5,956 | $ 6,817 | 4,353,430 | (5,099,968) | (733,265) |
| Ending balance, shares at Jun. 30, 2021 | 50,000 | 595,612 | 6,817,784 | |||
| Beginning balance, value at Mar. 31, 2021 | $ 500 | $ 5,956 | $ 6,817 | 4,353,430 | (5,075,377) | (708,674) |
| Beginning balance, shares at Mar. 31, 2021 | 50,000 | 595,612 | 6,817,784 | |||
| Net loss | (24,591) | (24,591) | ||||
| Ending balance, value at Jun. 30, 2021 | $ 500 | $ 5,956 | $ 6,817 | $ 4,353,430 | $ (5,099,968) | $ (733,265) |
| Ending balance, shares at Jun. 30, 2021 | 50,000 | 595,612 | 6,817,784 |
Basis of Presentation and Consolidation |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Consolidation | Note 1. Basis of Presentation and Consolidation
While the information presented in the accompanying June 30, 2021 financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company’s September 30, 2020 audited financial statements (and notes thereto). Operating results for the three and nine months ended June 30, 2021 are not necessarily indicative of the results that can be expected for the year ending September 30, 2021.
The accompanying unaudited condensed consolidated financial statements herein contain the operations of Virtual Interactive Technologies Corp (“VIT”), and its wholly-owned subsidiaries Advanced Interactive Gaming Inc. (“AIG Inc.”) and Advanced Interactive Gaming Ltd. (“AIG Ltd”) (collectively, the “Company”). All significant intercompany amounts have been eliminated.
|
Business |
9 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||
| Business | Note 2. Business
Nature of Operations
Virtual Interactive Technologies Corp. was incorporated in Nevada on November 3, 2011 under the name Mascota Resources Corp.
On November 25, 2019 the following became effective on the over-the-counter market
On September 27, 2019, Virtual Interactive Technologies Corp merged with Advanced Interactive Gaming Inc, and its subsidiary Advanced Interactive Gaming Ltd. (collectively “Advanced Interactive Gaming” or “AIG”), through a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide financing solutions for independent video game developers globally. Advanced Interactive Gaming was deemed to be the accounting acquirer of the transaction and will be the operating entity moving forward under the name of Virtual Interactive Technologies Corp (“VIT,” “the Company” or “we”).
VIT finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the games. To date the Company has financed several gaming titles including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release and Worbital. Collectively these games are distributed world-wide on various gaming platforms including Sony PlayStation, Xbox, Steam and Oculus among others. In addition to financing solutions, VIT offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VIT continues to reinvest its royalty income into growing its royalty contracts and intellectual property in the video game development industry.
The Company’s strategy moving forward is to continue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the relatively early stage in the product cycle and the growing need for content to support VR hardware sales. While the Company has historically participated mostly in the PC and console market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VIT may explore strategic alliances and acquisitions in order to expand its business.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
Cash Equivalents
The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at June 30, 2021 or September 30, 2020.
Fair Value of Financial Instruments
The Company accounts for fair value measurements in accordance with accounting standard ASC 820-10-50, “Fair Value Measurements.” ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
The Company’s financial instruments consist of cash, royalties receivable, notes receivable and related accrued interest receivable, accounts payable and accrued expenses, and notes payable. The carrying value of these financial instruments approximates fair value due to the short-term nature of the instruments.
Royalties Receivable
The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change and that losses ultimately incurred could differ materially from the amounts estimated in determining the allowance. The Company has determined that no allowance is necessary as of June 30, 2021 or September 30, 2020.
In accordance with ASC 260 “Earnings per Share,” the basic net income (loss) per share (“EPS”) is computed by dividing the 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 is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding adjusted on an “if-converted” basis (for convertible preferred stock). As of June 30, 2021 and September 30, 2020, the Company had Series B Preferred stock issued and outstanding that was convertible into shares of common stock. These potentially dilutive securities were excluded from the EPS computation due to their anti-dilutive effect resulting from the Company’s net losses for the three and nine months ended June 30, 2021 and June 30, 2020.
Foreign Currency
The Company’s functional currency is the US dollar. With the exception of stockholders’ equity (deficit), all transactions that are originally denominated in foreign currency are translated to US dollars by our international customers, on a monthly basis, when recognized by them and prior to paying royalties to the Company. All royalty revenues that are received and recognized by the Company are recorded in US dollars.
The Company has a Euro currency bank account located in Bermuda. This account is used for payments to vendors that bill the Company in a currency other than US dollars and for funds received from shareholders located outside the United States. As of June 30, 2021 and September 30, 2020, the Euro account had a balance of $-0-.
Foreign currency translation gains/losses are recorded in other accumulated comprehensive income (“AOCI”) based exchange rates prevalent on reporting dates for balance sheet items, and at weighted average exchange rates during the reporting period for the statement of operations. Foreign currency transaction gains/losses are recorded as other expense in the period of settlement. No AOCI items were present during the three months ended June 30, 2021 and 2020, as all financial statement items were denominated in the US dollar. Gains and losses from foreign currency transactions during the three and nine months ended June 30, 2021 totaled $5 loss and $620 gain, respectively. Gains and losses from foreign currency transactions during the three and nine months ended June 30, 2020 totaled $542 gain and $209 gain, respectively.
Concentration of Credit Risk
Some of our US dollar balances are held in a Bermuda bank that is not insured. As of June 30, 2021 and September 30, 2020, uninsured deposits in the Bermuda bank totaled $20,583 and $20,649, respectively. Our management believes that the financial institution is financially sound, and the risk of loss is low. The Company is in the process of migrating its banking to the institutions in the United States, which are insured by the FDIC up to $250,000.
Revenue Recognition
The Company follows guidance contained in ASC 606, “Revenue Recognition.” The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 outlines the following five-step revenue recognition model (along with other guidance impacted by this standard): (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; (5) recognize revenue when or as the entity satisfies a performance obligation.
The Company has several contracts with video game developers that entitle us to royalty streams as a percentage of revenues generated by the game sales, which vary from contract to contract. As of June 30, 2021, the Company has four royalty contracts with three developers that are generating royalty revenue, and two royalty contracts for games that are in development.
Once a game has been developed and has met the terms of the underlying royalty agreement, the game is released for commercial sales. Per each contract, the Company will receive reports on a regular basis from the game developers’ sales platforms that identify the amount of game sales, from which consideration expected to be collected from the commercial customers is computed based on the applicable royalty percentages. Royalty revenue is based on a percentage of net receipts as defined in each customer agreement, and is recognized in accordance with the sale-based royalty provisions of ASC 606, which requires revenue recognition after the subsequent sales occur. The Company’s performance obligation under each royalty contract as an investor in the game is complete once funds are advanced to the gaming developer. Subsequent consideration is then received by the Company from the developers in the amount of the Company’s percentage fee of royalty income (net receipts) received by the customer. Net receipts include all gross revenues received by the customer as a result of sales of the games or related exploitation less certain taxes, refunds, manufacturing costs, freight, and other items specified in the underlying contract.
New Accounting Pronouncements
The Company has evaluated all other recently issued or enacted accounting pronouncements, and has determined that all such pronouncements either do not apply or their impact is insignificant to the financial statements.
COVID-19 Uncertainties
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
|
Stockholders’ Equity (Deficit) |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Equity [Abstract] | |
| Stockholders’ Equity (Deficit) | Note 3. Stockholders’ Equity (Deficit)
The Company’s common stock is quoted under the symbol “VRVR” on the OTC Pink tier operated by OTC Markets Group, Inc. To date, an active trading market for the Company’s common stock has not developed.
Preferred Stock
The Company is authorized to issue each of Series A and B preferred shares at a par value of $, respectively. At June 30, 2021 and September 30, 2020, the Company had shares of Series A preferred stock and shares of Series B preferred stock issued and outstanding. The holders of the Series B preferred stock are entitled to dividends (which are not guaranteed), carry one vote per share, and are convertible into common stock on a 1:1 basis at the option of the holder. The shares of Series A preferred stock currently outstanding are not convertible. To date, no dividends have been declared.
Common Stock
The Company is authorized to issue shares of common stock at par value of $. At June 30, 2021 and September 30, 2020, the Company had shares of common stock issued and outstanding.
During the six months ended March 31, 2020, the Company issued shares of common stock as part of a payoff on notes payable and accrued interest. Of the shares issued, shares were issued to a related party for notes payable and accrued interest.
|
Note Payable |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Debt Disclosure [Abstract] | |
| Note Payable | Note 4. Note Payable
On March 20, 2019, an unrelated individual loaned VIT $. The note carries a interest rate and was payable March 20, 2020. The note has been amended to mature on . As of June 30, 2021 and September 30, 2020 the notes balance was $10,000. As of June 30, 2021 and September 30, 2020, the accrued interest on the note totaled $1,369 and $921, respectively.
|
Related Party Transactions |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 5. Related Party Transactions
During the three and nine months ended June 30, 2021 the Company incurred $0 in contract management services rendered by an affiliate of our CEO. During the three and nine months ended June 30, 2020 the Company incurred $30,000 and $90,000, respectively, in contract management services rendered by an affiliate of our CEO. As of June 30, 2021 and September 30, 2020, the Company owed $0 for these services.
During the three and nine months ended June 30, 2021, the Company incurred $16,000 and $64,000 in contract management services rendered by an affiliate of our CFO. During the three and nine months ended June 30, 2020, the Company incurred $24,000 and $72,000 in contract management services rendered by an affiliate of our CFO. As of June 30, 2021 and September 30, 2020, the Company owed $4,000 and $9,994, respectively, for these services.
Note Payable, Related Party
On March 29, 2018, the Company issued a $750,000, unsecured promissory note to the Company’s CEO for a potential acquisition and working capital. The actual funds received by the Company were $741,030, with $8,970 recorded under note receivable, related party as of September 30, 2020. As of September 30, 2020, the Company applied the $8,970 that was recorded as a note receivable to the outstanding promissory note. The Company amended the note payable principal to $741,030 to correspond with the funds actually received. The note carries an interest rate of 6% per annum, compounding annually, and matures on December 31, 2022. All principal and interest are due at maturity and there is no prepayment penalty for early repayment of the note. As of June 30, 2021 and September 30, 2020, total balance on the debt was $741,030 and accrued interest totaled $155,161 and $118,263, respectively.
|
Note Receivable |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Note Receivable | |
| Note Receivable | Note 6. Note Receivable
On December 11, 2019, the Company issued a $25,000, unsecured promissory note receivable to a non-related entity. The note carries an interest rate of 6% per annum and is due on demand. There is no prepayment penalty for early repayment of the note. As of June 30, 2021 and September 30, 2020, accrued interest was $2,709 and $1,586, respectively.
|
Convertible Note Receivable |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Convertible Note Receivable | |
| Convertible Note Receivable | Note 7. Convertible Note Receivable
On November 20, 2020, the Company invested $7,500 in a Convertible Note from an unrelated entity developing a freemium gaming concept that combines online auctions and gift card purchasing. The note matures on November 20, 2022. The note carries an interest rate of 4% per annum and is convertible into 1.25% of the entity’s stock at the Company’s option. As of June 30, 2021, accrued interest was $178.
|
Subsequent Events |
9 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 8. Subsequent Events
The Company has evaluated events subsequent to the balance sheet date through the date these financial statements were issued and determined that there are no events requiring disclosure. |
Business (Policies) |
9 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
| Nature of Operations | Nature of Operations
Virtual Interactive Technologies Corp. was incorporated in Nevada on November 3, 2011 under the name Mascota Resources Corp.
On November 25, 2019 the following became effective on the over-the-counter market
On September 27, 2019, Virtual Interactive Technologies Corp merged with Advanced Interactive Gaming Inc, and its subsidiary Advanced Interactive Gaming Ltd. (collectively “Advanced Interactive Gaming” or “AIG”), through a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide financing solutions for independent video game developers globally. Advanced Interactive Gaming was deemed to be the accounting acquirer of the transaction and will be the operating entity moving forward under the name of Virtual Interactive Technologies Corp (“VIT,” “the Company” or “we”).
VIT finances the development of video game projects to be released on various popular gaming platforms in exchange for a royalty stream on the games. To date the Company has financed several gaming titles including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release and Worbital. Collectively these games are distributed world-wide on various gaming platforms including Sony PlayStation, Xbox, Steam and Oculus among others. In addition to financing solutions, VIT offers expertise in development solutions, publishing and marketing video game products and is actively involved in the early stages of VR/AR game development. VIT continues to reinvest its royalty income into growing its royalty contracts and intellectual property in the video game development industry.
The Company’s strategy moving forward is to continue to invest in new game development through partnerships and royalty contracts. Management believes that there is significant opportunity in VR games given the relatively early stage in the product cycle and the growing need for content to support VR hardware sales. While the Company has historically participated mostly in the PC and console market, it will continue to explore addition opportunities in the gaming space as they present themselves. In addition, the VIT may explore strategic alliances and acquisitions in order to expand its business.
|
|||||||||||||||
| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
|
|||||||||||||||
| Cash Equivalents | Cash Equivalents
The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at June 30, 2021 or September 30, 2020.
|
|||||||||||||||
| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The Company accounts for fair value measurements in accordance with accounting standard ASC 820-10-50, “Fair Value Measurements.” ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
The Company’s financial instruments consist of cash, royalties receivable, notes receivable and related accrued interest receivable, accounts payable and accrued expenses, and notes payable. The carrying value of these financial instruments approximates fair value due to the short-term nature of the instruments.
|
|||||||||||||||
| Royalties Receivable | Royalties Receivable
The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change and that losses ultimately incurred could differ materially from the amounts estimated in determining the allowance. The Company has determined that no allowance is necessary as of June 30, 2021 or September 30, 2020.
|
|||||||||||||||
| Net Income (Loss) Per Share |
In accordance with ASC 260 “Earnings per Share,” the basic net income (loss) per share (“EPS”) is computed by dividing the 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 is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding adjusted on an “if-converted” basis (for convertible preferred stock). As of June 30, 2021 and September 30, 2020, the Company had Series B Preferred stock issued and outstanding that was convertible into shares of common stock. These potentially dilutive securities were excluded from the EPS computation due to their anti-dilutive effect resulting from the Company’s net losses for the three and nine months ended June 30, 2021 and June 30, 2020.
|
|||||||||||||||
| Foreign Currency | Foreign Currency
The Company’s functional currency is the US dollar. With the exception of stockholders’ equity (deficit), all transactions that are originally denominated in foreign currency are translated to US dollars by our international customers, on a monthly basis, when recognized by them and prior to paying royalties to the Company. All royalty revenues that are received and recognized by the Company are recorded in US dollars.
The Company has a Euro currency bank account located in Bermuda. This account is used for payments to vendors that bill the Company in a currency other than US dollars and for funds received from shareholders located outside the United States. As of June 30, 2021 and September 30, 2020, the Euro account had a balance of $-0-.
Foreign currency translation gains/losses are recorded in other accumulated comprehensive income (“AOCI”) based exchange rates prevalent on reporting dates for balance sheet items, and at weighted average exchange rates during the reporting period for the statement of operations. Foreign currency transaction gains/losses are recorded as other expense in the period of settlement. No AOCI items were present during the three months ended June 30, 2021 and 2020, as all financial statement items were denominated in the US dollar. Gains and losses from foreign currency transactions during the three and nine months ended June 30, 2021 totaled $5 loss and $620 gain, respectively. Gains and losses from foreign currency transactions during the three and nine months ended June 30, 2020 totaled $542 gain and $209 gain, respectively.
|
|||||||||||||||
| Concentration of Credit Risk | Concentration of Credit Risk
Some of our US dollar balances are held in a Bermuda bank that is not insured. As of June 30, 2021 and September 30, 2020, uninsured deposits in the Bermuda bank totaled $20,583 and $20,649, respectively. Our management believes that the financial institution is financially sound, and the risk of loss is low. The Company is in the process of migrating its banking to the institutions in the United States, which are insured by the FDIC up to $250,000.
|
|||||||||||||||
| Revenue Recognition | Revenue Recognition
The Company follows guidance contained in ASC 606, “Revenue Recognition.” The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 outlines the following five-step revenue recognition model (along with other guidance impacted by this standard): (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; (5) recognize revenue when or as the entity satisfies a performance obligation.
The Company has several contracts with video game developers that entitle us to royalty streams as a percentage of revenues generated by the game sales, which vary from contract to contract. As of June 30, 2021, the Company has four royalty contracts with three developers that are generating royalty revenue, and two royalty contracts for games that are in development.
Once a game has been developed and has met the terms of the underlying royalty agreement, the game is released for commercial sales. Per each contract, the Company will receive reports on a regular basis from the game developers’ sales platforms that identify the amount of game sales, from which consideration expected to be collected from the commercial customers is computed based on the applicable royalty percentages. Royalty revenue is based on a percentage of net receipts as defined in each customer agreement, and is recognized in accordance with the sale-based royalty provisions of ASC 606, which requires revenue recognition after the subsequent sales occur. The Company’s performance obligation under each royalty contract as an investor in the game is complete once funds are advanced to the gaming developer. Subsequent consideration is then received by the Company from the developers in the amount of the Company’s percentage fee of royalty income (net receipts) received by the customer. Net receipts include all gross revenues received by the customer as a result of sales of the games or related exploitation less certain taxes, refunds, manufacturing costs, freight, and other items specified in the underlying contract.
|
|||||||||||||||
| New Accounting Pronouncements | New Accounting Pronouncements
The Company has evaluated all other recently issued or enacted accounting pronouncements, and has determined that all such pronouncements either do not apply or their impact is insignificant to the financial statements.
|
|||||||||||||||
| COVID-19 Uncertainties | COVID-19 Uncertainties
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
|
Business (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Nov. 25, 2019 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Sep. 30, 2020 |
|
| Entity Listings [Line Items] | ||||||
| Reverse stock split | 1-for-20 reverse split | |||||
| Cash equivalents | $ 0 | $ 0 | $ 0 | |||
| Gain and losses from foreign currency transactions | (5) | $ 542 | 620 | $ 209 | ||
| Gain and losses from foreign currency transactions | 5 | $ (542) | (620) | $ (209) | ||
| Maximum [Member] | ||||||
| Entity Listings [Line Items] | ||||||
| Cash, FDIC insured amount | 250,000 | 250,000 | ||||
| Bermuda Bank [Member] | ||||||
| Entity Listings [Line Items] | ||||||
| Cash, uninsured deposits | $ 20,583 | 20,583 | 20,649 | |||
| EUR [Member] | ||||||
| Entity Listings [Line Items] | ||||||
| Gain and losses from foreign currency transactions | 0 | 0 | ||||
| Gain and losses from foreign currency transactions | $ 0 | $ 0 | ||||
| Series B Convertible Preferred Stock [Member] | ||||||
| Entity Listings [Line Items] | ||||||
| Antidilutive securities excluded from computation of earnings per shares | 595,612 | 595,612 | ||||
Note Payable (Details Narrative) - USD ($) |
Mar. 20, 2019 |
Jun. 30, 2021 |
Sep. 30, 2020 |
|---|---|---|---|
| Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
| Notes payable | $ 10,000 | $ 10,000 | |
| Interest payable | $ 1,369 | $ 921 | |
| Two Unrelated Individuals [Member] | |||
| Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
| Debt Instrument, Face Amount | $ 10,000 | ||
| Debt instrument interest rate | 6.00% | ||
| Maturity date | Mar. 20, 2022 |
Note Receivable (Details Narrative) - Unsecured Promissory Note Receivable [Member] - USD ($) |
Jun. 30, 2021 |
Sep. 30, 2020 |
Dec. 11, 2019 |
|---|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
| Debt instrument, face amount | $ 25,000 | ||
| Debt instrument, interest rate | 6.00% | ||
| Accrued interest | $ 2,709 | $ 1,586 |
Convertible Note Receivable (Details Narrative) - Convertible Note Receivable [Member] - USD ($) |
Nov. 20, 2020 |
Jun. 30, 2021 |
|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Payment to acquire note receivable | $ 7,500 | |
| Debt, maturity date | Nov. 20, 2022 | |
| Debt instrument interest rate | 4.00% | |
| Eligibility of convertible note into entity stock | 1.25% | |
| Accrued interest | $ 178 |
_JG4#O7LA8.
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M]]BYPM#JZF4 _[KE^*!;2K3;\"8XR$RMJ6F -8?20$3;8T.P6BP^0"X99K>]9!:G