10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

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

 

For the quarterly period ended October 31, 2018

 

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

 

Commission file number: 001-36877

 

Bigfoot Project Investments Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   45-3942184
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

570 El Camino Real NR-150, Redwood City, CA   94063
(Address of principal executive offices)   (Zip Code)

 

(415) 518-8494

(Registrant’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Act: None

 

Securities registered under Section 12(g) of the Act: Common Stock, $0.001 par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [  ] No [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [  ] No [X]

 

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

 

Indicate by check mark whether the registrant has submitted electronically 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 and post such files). Yes [X] No [  ]

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ] Accelerated filer [  ] Smaller reporting company [X]
Non-accelerated filer [  ]   Emerging growth company [  ]

 

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

 

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

 

The number of shares of Common Stock, $0.001 par value, outstanding on December 19, 2018 was 2,339,123,431 shares.

 

 

 

   
 

 

BIGFOOT PROJECT INVESTMENTS INC.

QUARTERLY PERIOD ENDED OCTOBER 31, 2018

 

Index to Report on Form 10-Q

 

    Page No.
  PART I - FINANCIAL INFORMATION  
Item 1. Financial Statements 3
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
     
Item 4T. Controls and Procedures 15
     
  PART II - OTHER INFORMATION  
     
Item 1. Legal Proceedings 16
     
Item1A. Risk Factors 16
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
     
Item 3. Defaults Upon Senior Securities 16
     
Item 4. Mine Safety Disclosures 16
     
Item 5. Other Information 16
     
Item 6. Exhibits 16
     
  Signature 17

 

 2 
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

BIGFOOT PROJECT INVESTMENTS, INC.

Balance Sheets

As of October 31, 2018, and July 31, 2018

(Unaudited)

 

   October 31, 2018   July 31, 2018 
ASSETS          
           
Current Assets          
Cash  $15,328   $587 
Inventory   11,386    11,386 
Total current assets   26,714    11,973 
           
Fixed Assets          
Equipment, net   1,623    2,066 
Total Fixed Assets        2,066 
           
Other Assets          
Website Development   5,500    5,500 
Accumulated Amortization   (5,500)   (5,500)
Total Other Assets   -    - 
           
Total Assets  $28,337   $14,039 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current liabilities          
Accounts Payable  $136,537   $98,152 
Advance from shareholders   25,999    57,524 
Accrued Interest   59,612    54,971 
Convertible Debt (net of unamortized discount)   147,148    121,194 
Derivative Liability   237,864    351,492 
Promissory note - related party   435,894    472,370 
Total current liabilities   1,043,054    1,155,703 
           
Total Liabilities   1,043,054    1,155,703 
           
Stockholders’ deficit          
Preferred stock, $0.001 par value; 500,000,000 shares authorized, 0 shares issued and outstanding as of October 31, 2018 and July 31, 2018   -    - 
Common stock, $0.001 par value; 6,500,000,000 shares authorized, 2,291,123,431 and 2,159,215,077 issued and outstanding as of October 31, 2018 and July 31, 2018, respectively   2,291,124    2,159,215 
Additional paid in capital   6,993,816    7,044,400 
Accumulated deficit   (10,299,657)   (10,345,279)
Total stockholders’ deficit   (1,014,717)   (1,141,664)
           
Total liabilities & stockholders’ deficit  $28,337   $14,039 

 

See accompanying notes to unaudited financial statements

 

 3 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

Statements of Operations (Unaudited)

 

  

Three Months Ended
October 31, 2018

  

Three Months Ended
October 31, 2017

 
         
Revenue  $263   $423 
           
Operating expenses:          
Professional fees   72,577    9,975 
Expedition expense   13,233    19,000 
General and administrative   5,738    5,224,527 
Total operating expenses   91,548    5,253,502 
           
Net loss from operations   (91,285)   (5,253,079)
           
Other Income (Expense)          
Gain on Settlement   15,042    - 
Derivative Gain   169,549    74,252 
Interest Expense   (47,684)   (69,320)
Total Other Income (Expense)   136,907    4,932 
           
Net income (loss)  $45,622   $(5,248,147)
           
Basic income (loss) per share  $0.00   $(0.02)
Diluted loss per shares  $0.00   $(0.02)
           
Weighted average shares outstanding   2,256,803,690    259,227,638 
Fully diluted weighted average shares   3,677,126,944    259,227,638 

 

See accompanying notes to unaudited financial statements

 

 4 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

Statement of Cash Flows (Unaudited)

 

  

Three Months Ended
October 31, 2018

   Three Months Ended
October 31, 2017
 
         
Cash flow from operating activities:          
Net income (loss)  $45,622   $(5,248,147)
Stock based compensation   8,647    5,220,000 
Gain on derivative liability   (169,549)   (74,252)
Amortization of debt discount   27,148    64,596 
Depreciation   443    - 
Gain on debt settlement   (15,042)   - 
Debt penalties   15,364    - 
Change in operating liabilities:          
Accounts Receivable   -    3,000 
Inventory   -    (4,354)
Accounts Payable   38,385    (7,207)
Accrued Interest   4,724    4,724 
Net cash used in operating activities   (44,258)   (41,640)
           
Cash flow from investing activities          
Cash Paid for Purchases of Fixed Assets   -    (1,085)
Net cash used in investing activities   -    (1,085)
           
Cash flow from financing activities          
Proceeds for Advances from shareholders   4,759    31,727 
Payments on Advances from shareholders   (36,284)   (49,815)
Payments on Promissory Note   (36,476)   - 
Proceeds from Convertible Notes   127,000    60,000 
Net cash provided by financing activities   58,999    41,912 
           
Net increase (decrease) in cash   14,741    (813)
Cash at beginning of period   587    1,105 
Cash at end of period  $15,328   $292 
           
Supplemental Cash Flow Information:          
Cash paid for income taxes  $-    - 
Cash paid for interest expense  $-    - 
           
Non-cash Transactions          
Common stock issued for debt conversion  $13,599    39,239 
Settlement of derivative liability  $59,079    71,173 
Recognition of derivative debt discount  $115,000    - 

 

See accompanying notes to unaudited financial statements

 

 5 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization, Nature of Business and Trade Name

 

A summary of significant accounting policies of Bigfoot Project Investments, Inc. (the “Company”), a company organized in the state of Nevada, is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the companying financial statements. These financial statements and notes are representations of management who are responsible for their integrity and objectivity.

 

The Company was incorporated in the State of Nevada on November 30, 2011. The Company’s administrative office is located at 570 El Camino Real NR-150, Redwood City, CA and its fiscal year ended July 31. Since inception, the Company has been engaged in organizational efforts and the pursuit of financing. The Company was established as an entertainment investment business.

 

The Company’s mission is to create exciting and interesting proprietary investment projects, entertainment properties surrounding the mythology, research, and potential capture of the creature known as Bigfoot. The Company performs research in determining the existence of this elusive creature. For the past six years, the research team and members of management have performed research on various expeditions investigating sightings throughout the United States and Canada.

 

The Company’s competitive advantage is the in-house knowledge and the advanced level of maturity of its various projects developed and currently owned by our officers and controlling shareholder. The Company will capitalize on the current projects through contractual agreements which allow the Company to continue to create media properties and establish physical locations, partnerships, and strategic alliances with other organizations to create revenue as a stand-alone business.

 

Basis of Presentation

 

The accompanying unaudited interim financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. Operating results and cash flows for interim periods are not necessarily indicative of the results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in our 10-K for the year ended July 31, 2018 filed on SEC website on November 13, 2018.

 

Revenue recognition

 

The Company accounts for revenues according to ASC Topic 606, “Revenue from Contracts with Customers” which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

 

During the three months ended October 31, 2018, the Company’s revenues were primarily made up of revenue generated from our online streaming distributor.

 

Fair value of financial instruments

 

The carrying value of cash, accounts receivable, accounts payable and accrued expenses, and debt approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

 

 6 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.
Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily-available pricing sources for comparable instruments.
Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

 

The following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of October 31, 2018 and July 31, 2018:

 

   Amount   Level 1   Level 2   Level 3 
Embedded conversion derivative liability July 31, 2018  $351,492   $     -   $      -   $351,492 
Total July 31, 2018   351,492              351,492 
Embedded conversion derivative liability October 31, 2018   237,864    -    -    237,864 
Total October 31, 2018  $237,864   $-   $-   $237,864 

 

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

 

Balance at July 31, 2017  $262,722 
Reclass to equity due to conversion   (71,173)
Unrealized derivative gain included in other expense   (74,252)
Balance at October 31, 2017  $117,297 
      
Balance at July 31, 2018   351,492 
Fair value of derivative liability at issuance charged to debt discount   115,000 
Fair value of derivative liability at issuance charged to derivative loss   101,164 
Reclass to equity due to conversion   (59,079)
Write-off of derivative liability due to settlement   (57,248)
Unrealized derivative gain included in other expense   (213,465)
Balance at October 31, 2018  $237,864 

 

The Company evaluated its convertible notes to determine if the embedded component of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The Company determined that due to the variable number of common stock that the notes convert to, the embedded conversion option were required to be bifurcated and accounted for as a derivative liability. The fair value of the derivative liability is calculated at the time of issuance and the Company records a derivative liability for the calculated value. Changes in the fair value of the derivative liability are recorded in other income (expense) in the statements of operations. Upon conversion of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

 

The Company’s derivative instruments were valued using the Lattice model which was based on a probability weighted discounted cash flow model. For the three months ended October 31, 2017, assumptions used in the valuation include the following: a) underlying stock price ranging from $0.087 to $0.0026; b) projected discount on the conversion price ranging from 35% to 50% with the notes effectively converting at discounts in the range of 23.90% to 33.53%; c) projected volatility of 240% to 383%; d) probabilities related to default and redemption of the notes during the term of the notes.

 

The Company’s derivative instruments were valued using the Lattice model which was based on a probability weighted discounted cash flow model. For the three months ended October 31, 2018, assumptions used in the valuation include the following: a) underlying stock price ranging from $0.0016 to $0.0004; b) projected discount on the conversion price ranging from 50% to 35% and 62% with the notes effectively converting at discounts in the range of 26.75% to 58.0%; c) projected volatility of 324.7% to 434.5%; and d) probabilities related to default and redemption of the notes during the term of the notes.

 

The Company has considered the provisions of ASC 480, Distinguishing Liabilities from Equity, as the conversion feature embedded in each debenture could result in the note principal being converted to a variable number of the Company’s common shares.

 

 7 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Basic and Diluted Earnings per Share

 

Basic earnings per share are based on the weighted-average number of shares of common stock outstanding.

 

The FASB ASC Topic 260, “Earnings per Share”, requires the Company to include additional shares in the computation of earnings per share, assuming dilution.

 

Diluted earnings per share are based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

We calculate basic earnings (loss) per share by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated similarly but reflects the potential impact of outstanding stock options, stock warrants and other commitments to issue common stock, including shares issuable upon the conversion of convertible notes outstanding, except where the impact would be anti-dilutive.

 

The following is a reconciliation of basic and diluted earnings per share for the three months ended October 31, 2018 and 2017:

 

  

Period Ended

October 31, 2018

  

Period Ended

October 31, 2017

 
         
Numerator:          
Net Income (loss) available to common shareholders  $45,622   $(5,248,147)
Net Income (loss) available to common shareholders adjusted for potential impact of the conversion of convertible notes outstanding  $(81,415)   (5,248,147)
           
Denominator:          
Weighted average shares – basic   2,256,803,690    259,227,638 
Plus: Incremental shares from convertible debt   

1,420,323,254

    - 
Weighted average shares - diluted   3,677,126,944    259,227,638 
           
Net Income (loss) per share – basic  $0.00   $(0.02)
Net loss per shares – diluted  $(0.00)  $(0.02)

 

NOTE 2 - GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of American applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has incurred recurring losses, does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These factors raise substantial doubt about our ability to continue as a going concern.

 

In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the SEC, and payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital.

 

Historically, it has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operation and growth. Management may raise additional capital by future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern

 

 8 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

NOTE 3 – ADVANCE FROM SHAREHOLDERS

 

In the quarter ended October 31, 2017, additional advances from shareholders were received in the amount of $31,727. The Company made payments on these advances amounting to $49,815. These advances bear no interest and are due on demand. The total advances from shareholders as of July 31, 2017 were $60,322 and as of October 31, 2017 were $42,234.

 

In the quarter ended October 31, 2018, additional advances from shareholders were received in the amount of $4,759. The Company made payments on these advances amounting to $36,284. These advances bear no interest and are due on demand. The total advances from shareholders as of July 31, 2018 were $57,524 and as of October 31, 2018 were $25,999.

 

NOTE 4 – NOTE PAYABLE – RELATED PARTY

 

In January 2013, Bigfoot Project Investments, Inc. executed a promissory note in the amount of $484,029 as part of the asset transfer agreement for the transfer of all assets held by Searching for Bigfoot, Inc. In August 2013, the Company increased the balance of the promissory note by $489 to add an asset that was not included in the original transfer. Terms of the note are that the unpaid principle and the accrued interest are payable in full on January 31, 2018. The Company was able to pay $36,476 toward the principal of the loan during the period ended October 31, 2018. The holders of the note have agreed to allow the note to be renewed for another year.

 

The interest rate stated on the note is 4.0% (four percent). Monthly payments are not required in the note; however, the note does contain a prepayment clause that allows for payments to be made prior to the due date with no detrimental effects. As of October 31, 2018, and July 31, 2018, the outstanding balance on the note was $435,894 and $472,370.

 

Interest expense for the three months ended October 31, 2018 and 2017 was $4,724 and $4,724.

 

NOTE 5 - CAPITAL STOCK

 

The holders of the Company’s common stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends at such times and in such amounts as the board from time to time may determine. Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for election. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of the company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.

 

The Company has 2,291,123,431 and 2,159,215,077 shares of common stock issued and outstanding as of October 31, 2018 and July 31, 2018, respectively.

 

During the three months ended October 31, 2018, Auctus Fund converted 110,289,820 shares of common stock for a principal amount due of $3,516 and settlement of unpaid interest of $83 and penalty of $10,000. Balance of the note as of October 31, 2018 was $0.

 

During the three months ended October 31, 2018, the Company reserved 21,618,534 shares of common stock for Veyo Partners per the consulting agreement dated November 30, 2017. Fair value of the shares reserved as of October 31, 2018 is $8,647.

 

 9 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

NOTE 6 – DISTRIBUTION AGREEMENTS

 

The Company entered into a Distribution Agreement on September 2, 2011 with the Bosko Group LLC providing them a non-exclusive right to market the sales of the Company’s DVD’s. The Distribution Agreement requires the Company to pay the Bosko Group LLC ten percent (10%) of the selling price of the DVD’s sold. This agreement remained in effect for a period of 4 years and has been automatically renewed for an additional 4 years with no limit on the number of times the agreement may be automatically renewed, unless either party gives notice to the other of its desire to terminate the Agreement at least sixty (60) days before expiration of the original or renewal term.

 

In May 2017, the Company entered into two separate agreements (the “Re-Release”) with The Bosko Group LLC (the “Distributor”) to provide distribution and promotional services to the Company. The terms of the agreements provide for the following:

 

  a. Compensation to the Company for the Re-Release will be based on projected gross sales range and royalties for six existing DVD documentaries which will be offered into all distribution markets as a series with a new introduction narrated by Tom Biscardi.
     
  b. Compensation to the Company for the Distribution of new feature-length films is based on past performance of previous productions with up-front funding and projected royalties over all distribution channels. The Company completed production of the first of the new feature-length films in July 2017. The film was edited and released in August 2018 through various channels, and the Company is awaiting sales reports from the distribution company.

 

NOTE 7 – CONVERTIBLE NOTES

 

On January 19, 2017, the Company issued a convertible promissory note in the amount of $62,500 to EMA Financial, LLC, a Delaware limited liability company. This convertible note is due and payable January 19, 2018, has an interest rate of 10% and is convertible to common stock of the Company at a conversion price equal to the lower of: (i) the closing sale price of the common stock on the principal market on the trading immediately preceding the closing date of this note, and (ii) 50% of either the lowest sale price for the common stock on the principal market during the twenty-five (25) consecutive trading days immediately preceding the conversion date or the closing bid price. The note may be prepaid at 135% - 145% of outstanding principal balance. This note became convertible on May 23, 2017 and the variable conversion feature was accounted for as a derivative liability in accordance with ASC 815. This note went into default as of January 19, 2018.

 

On August 9, 2018, the Company and EMA Financial (“EMA”) negotiated a settlement agreement for the January 2017 Note. In the settlement agreement EMA agreed to accept the amount of $40,000 as the current outstanding balance of the January 2017 Note as of the Effective Date. As of the Effective Date, interest will accrue on the January 2017 Note at a rate of ten percent (10%) per annum, unless the Company breaches any provision or representation in this settlement agreement, or an additional Event of Default occurs. In the event of default, the conversion price discount shall revert to a 50% discount of either the lowest sale price for the Common Stock on the Principal Market as defined in the January 2017 Note during the twenty-five (25) consecutive Trading Days as defined in the January 2017 Note immediately preceding the Conversion Date or the closing bid price, whichever is lower. A gain on the settlement agreement of $15,042 has been reported on the period ended October 31, 2018. Balance of principal on the note as of July 31, 2018 and October 31, 2018 was $55,042 and $40,000, respectively.

 

 10 
 

 

BIGFOOT PROJECT INVESTMENTS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

On February 27, 2017, the Company issued a convertible promissory note in the amount of $62,500 to Auctus Fund LLC, a Delaware limited liability company. This convertible note is due and payable on November 28, 2017 with interest of 10% per annum. This note is convertible at the election of Auctus Fund, LLC after the 120 holding period has expired. In the event of default, the amount of principal and interest not paid when due bear interest at the rate of 24% per annum and the note becomes immediately due and payable. Should an event of default occur, the Company is liable to pay 150% of the then outstanding principal and interest. This note agreement contains covenants requiring Auctus Fund’s written consent for certain activities not in existence or not committed to by the Company on the issuance date of the note, as follows: dividend distributions in cash or shares, stock repurchases, borrowings, sale of assets, certain advances and loans in excess of $100,000, and certain guarantees with respect to preservation of existence of the Company and non-circumvention. This note became convertible on June 27, 2017 and the variable conversion feature was accounted for as a derivative liability in accordance with ASC 815.

 

Outstanding note principal and interest accrued thereon can be converted in whole, or in part, at any time by Auctus Fund, LLC after the issuance date into an equivalent of the Company’s common stock at a conversion price equal to the lower of: (i) 50% multiplied by the lowest trading price of the common stock during the previous twenty-five (25) trading day period prior to the date of the note and (ii) 50% of the lowest trading price of the common stock during the twenty-five (25) trading day period prior to the conversion date. The Company may prepay the amounts outstanding to Auctus Fund at any time up to the 180th day following the issue date of this note by making a payment to the note holder of an amount in cash equal to 135% to 145%, multiplied by the sum of: (w) the then outstanding principal amount of this note plus (x) accrued and unpaid interest on the unpaid principal amount of this note plus (y) default interest, depending on the time of prepayment. During the three months ended October 31, 2018, Auctus Fund converted 110,289,820 shares of common stock for a principal amount due of $3,516 and settlement of unpaid interest of $83, and penalty of $10,000. The note went into default as of November 18, 2017. Auctus imposed penalties of $364 during the three months ended October 31, 2018. The balance of this note as of July 31, 2018 and October 31, 2018 was $13,152 and $0, respectively.

 

On July 5, 2018, the Company, entered into a Securities Purchase Agreement (the Securities Purchase Agreement”) with the Investor, pursuant to which the Company sold to the Investor a convertible promissory note in the principal amount of $53,000 (the “July 2018 Note”), for an aggregate purchase price of $53,000. The July 2018 Note matures on April 30, 2019, bears interest rate of 12% per year payable on maturity date in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock on January 1, 2019, at the conversion price equal to 58% of the lowest trading price of the common stock during the 15 trading day period prior to the conversion date. The balance of the July 2018 note as of July 31, 2018 and October 31, 2018 is $53,000 and $53,000, respectively.

 

On August 3, 2018, the Company, entered into a Securities Purchase Agreement (the Securities Purchase Agreement”) with the Investor, pursuant to which the Company sold to the Investor a convertible promissory note in the principal amount of $30,000 (the “August 2018 Note”), for an aggregate purchase price of $30,000. The Company received $27,000 in cash for this note and recorded $3,000 as issuance cost. The August 2018 Note matures on May 15, 2019, bears interest rate of 12% per year payable on maturity date in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock on January 30, 2019 at the conversion price equal to the lower of (i) the closing sale price of the common stock on the principal market on the trading day immediately preceding the closing date, and (ii) 58% of either the lowest sale price for the common stock during the 20 consecutive trading days including and immediately preceding the conversion date. The balance of principal on the August 2018 Note as of October 31, 2018 is $30,000.

 

On August 1, 2018, the Company, entered into a Securities Purchase Agreement (the Securities Purchase Agreement”) with the Investor, pursuant to which the Company sold to the Investor a convertible promissory note in the principal amount of $110,000 (the “Second August 2018 Note”), for an aggregate purchase price of $100,000. The Company received $100,000 cash and recorded $10,000 as issuance cost. The Second August 2018 Note matures on May 1, 2019, bears interest rate of 10% per year payable on maturity date in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at the conversion price equal to the lower of (i) the closing sale price of the common stock on the principal market on the trading day immediately preceding the closing date, and (ii) 55% of either the lowest sale price for the common stock during the 20 consecutive trading days including and immediately preceding the conversion date. This note became convertible on issuance date and the variable conversion feature was accounted for as a derivative liability in accordance with ASC 815. The Company recorded an increase in the principal of $15,000 since the conversion price is less than $0.01. The balance of principal on the second August 2018 note as of October 31, 2018 is $125,000.

 

In the three months ended October 31, 2018, the Company recorded amortization of debt discount in the amount of $27,148. Unamortized discount as of October 31, 2018 amounted to $100,852.

 

NOTE 8 - SUBSEQUENT EVENTS

 

On November 20, 2018, EMA Financial converted 48,000,000 shares of common stock for a principal amount due of $6,240.

 

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

 

This Quarterly Report on Form 10-Q contains forward-looking statements and involves risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows, and business prospects. These statements include, among other things, statements regarding:

 

  our ability to diversify our operations;
     
  inability to raise additional financing for working capital;
     
  the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;
     
  our ability to attract key personnel;
     
  our ability to operate profitably;
     
  our ability to generate sufficient funds to operate the Bigfoot Project Investments, Inc. operations, upon completion of our acquisition;
     
  deterioration in general or regional economic conditions;
     
  adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
     
  changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
     
  the inability of management to effectively implement our strategies and business plan;
     
  inability to achieve future sales levels or other operating results;
     
  the unavailability of funds for capital expenditures;
     
  other risks and uncertainties detailed in this report; and
     
  as well as other statements regarding our future operations, financial condition and prospects, and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A and those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “Bigfoot Project”, the “Company”, and similar terms refer to Bigfoot Project Investments, Inc. unless otherwise expressly stated or the context otherwise requires.

 

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OVERVIEW AND OUTLOOK

 

Background

 

In January 2013, Bigfoot Project Investments, Inc. acquired all the assets of Searching for Bigfoot Inc. Since the majority shareholder of Searching for Bigfoot, Inc. is also the majority shareholder in Bigfoot Project Investments Inc. the asset acquisition was treated as a related party transaction and was not considered an arm’s length transaction under Generally Accepted Accounting Principles.

 

The assets acquired were transferred over at the existing book value listed on the balance sheet of Searching for Bigfoot, Inc. at the time of transfer. The transfer agreement called for the issuance of 4,400,000 shares of common stock which were valued at $.10 per share and the issuance of a promissory note in the amount of $484,029. The Company recorded a deemed distribution related to this transaction in the amount of $924,029. In August 2013, the Company increased the promissory note by $489 to add an asset that was not included in the original transfer.

 

As part of the asset transfer agreement Bigfoot Project Investments, Inc. received the following assets:

 

  Footprint cast of Bigfoot – 73 original casts
     
  Photographs of Dead Creature from Strickler, Arkansas 1994 Dear Creature Incident
     
  109-inch Skeleton
     
  Various Media Artifacts – Video TV News Media – 52 news stories
     
  Contract to sell Dinosaur fossil – most recent estimate by Paleontologist $1.2 million dollars
     
  Rubber suit from 2008 hoax
     
  Various DNA samples – Hair, and nails
     
  License to use 6 dinosaur displays
     
  Exclusive rights to the Bigfoot Website
     
  Exclusive rights to the Bigfoot Live Radio Show
     
  Exclusive rights to the Bigfoot Live Radio Show Website
     
  360 hours of raw footage from expeditions for movie development
     
  Various DVD Movies and Documentary film projects
     
  Exclusive rights to all current contracts negotiated under Searching For Bigfoot, Inc.

 

The above list is a complete list of the fixed assets for Bigfoot Project Investments, Inc.

 

We are a company who has, over the past year, developed nine DVD Movies; eight of which have been completed for distribution and one which is currently in the final stages of completion for distribution. We have established a contract with a Media Marketing Distribution Company (The Bosko Group), who has contracted six of the nine DVD movies to their distribution agents. We are a company with only minimal revenues to date: we have minimal assets, and have incurred losses since inception.

 

Bigfoot Project Investments, Inc. plans to establish itself as the most reliable and dependable source for materials including documentaries, physical evidence, and eye witness accounts for the purpose of documenting the evidence of the existence of Bigfoot. Our major source of revenue will be the sale of documentaries and specials that follow our progress. We have found that there is a market for these films and have started selling them on a semi-regular basis. In addition to the film sales we plan on having expeditions to locations where there have been multiple eye witness accounts as well as periodic exhibitions of the physical evidence that has been accumulated. We plan on focusing our efforts on expeditions to locations that have had multiple eye witness reports to maximize the chances of locating the creature and producing films that will be marketable to the public.

 

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RESULTS OF OPERATIONS

 

During the three months ended October 31, 2018, we generated revenue of $263. During the three months ended October 31, 2017, we generated revenue of $423.

 

Operating expenses during the three months ended October 31, 2018 were $91,548. Operating expenses during the three months ended October 31, 2017 were $5,253,502. Operating expenses for the three months ended October 31, 2017 consisted of professional fees of $72,577, general and administrative fees of $5,738, expedition fees of $13,233. Operating expenses for the three months ended October 31, 2017 consisted of professional fees of $9,975, expedition expense of $19,000 and general and administrative fees of $5,224,527. Expenses decreased during 2018 mainly due to the decrease in stock-based compensation.

 

There is significant uncertainty projecting future profitability due to our history of losses and lack of revenues. In our current state we have no recurring or guaranteed source of revenues and cannot predict when, if ever, we will become profitable. There is significant uncertainty projecting future profitability due to our minimal operating history and lack of guaranteed ongoing revenue streams.

 

Liquidity and Capital Resources

 

As of October 31, 2018, we had $15,328 in cash and did not have any other cash equivalents. The following table provides detailed information about our net cash flow for all financial statement periods presented in this Quarterly Report. To date, we have financed our operations through the issuance of stock and borrowings.

 

The following table sets forth a summary of our cash flows for the three months ended October 31, 2018 and 2017:

 

  

Period Ended
October 31, 2018

  

Period Ended
October 31, 2017

 
Net cash used in operating activities  $(44,258)  $(41,640)
Net cash used in investing activities   -    (1,085)
Net cash provided by financing activities   58,999    41,912 
Net increase (decrease) in Cash   14,741    (813)
Cash, beginning   587    1,105 
Cash, ending  $15,328   $292 

 

Since inception, we have financed our cash flow requirements through issuance of common stock and debt financing. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of listings or some form of advertising revenues. We anticipate obtaining additional financing to fund operations through additional common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital.

 

We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop and upgrade our website, provide national and regional industry participants with an effective, efficient and accessible website on which to promote their products and services through the Internet, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

 

Operating activities

 

Net cash used in operating activities was $44,258 for the period ended October 31, 2018, as compared to $41,640 used in operating activities for the period ended October 31, 2017.

 

Investing activities

 

Net cash used in investing activities was $0 for the period ended October 31, 2018, as compared to $1,085 used in investing activities for the same period in 2017.

 

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Financing activities

 

Net cash provided by financing activities for the period ended October 31, 2018 was $58,999 as compared to $41,912 for the same period of 2017.

 

We believe that cash flow from operations will not meet our present and near-term cash needs and thus we will require additional cash resources, including the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements for the next 12 months. We will require additional cash resources due to changed business conditions, implementation of our strategy to expand our sales and marketing initiatives, increase brand awareness, or acquisitions we may decide to pursue. If our own financial resources and then current cash-flows from operations are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects.

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk

 

This item is not applicable as we are currently considered a smaller reporting company.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our Principal Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the period covered by this Report. Based on that evaluation, it was concluded that our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on Effectiveness of Controls and Procedures

 

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

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PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not a party to any material legal proceedings during the three months ended October 31, 2018 and to our knowledge, there are currently no legal proceedings, inquiry or investigation, before any court, public board, government entity, self-regulatory organization or body pending, to which we are a party, which could have a material adverse effect on our business, financial condition, or operating results.

 

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities and Exchange Act of 1934 and are not required to provide the information under this item.

 

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

 

Stock Issuances

 

During the three-month period ended October 31, 2018 a total of 110,289,820 shares were issued for conversion of debt. During the three months ended October 31, 2018, the Company reserved 21,618,534 shares of common stock for Veyo Partners per the consulting agreement dated November 30, 2017.

 

Issuer Purchases of Equity Securities

 

We did not repurchase any of our equity securities from the time of our inception through the period ended October 31, 2018.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

None.

 

Item 5. Other Information.

 

None

 

Item 6. Exhibits.

 

Exhibit No.   Description
     
31.1   Certification of Principal Executive Officer & Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32.1   Certifications of Principal Executive Officer & Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

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SIGNATURE

 

Pursuant to the requirements 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.

 

  BIGFOOT PROJECT INVESTMENTS, INC.
     
     
Date: December 21, 2018 By: /s/ Carmine T. Biscardi
    Carmine T. Biscardi
    Chief Executive Officer
    (Principal Executive Officer and duly authorized signatory)

 

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