Summary of Significant Accounting Policies

3 Months Ended

Oct. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization, Nature of Business and Trade Name

Bigfoot Project Investments Inc. (“we”, “our” 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, 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, 2019 filed on SEC website on December 9, 2019.

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. The new standard’s core principal is that an entity will recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring good or services to a customer. The principals in the standard are applied in five steps:

1) Identify the contract(s) with a customer;

2) Identify the performance obligations in the contract;

3) Determine the transaction price;

4) Allocate the transaction price to the performance obligations in the contract; and

5) Recognize revenue when (or as) the entity satisfies a performance obligation.

During the three months ended October 31, 2019 and 2018, the Company’s revenues were primarily made up of revenue generated from our online streaming distributor. The Company generated revenues from contracted sources of $438 and $263 for the three months ended October 31, 2019 and 2018, respectively.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates.

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.

●	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 tables present 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, 2019 and July 31, 2019:

As of July 31, 2019	Amount		Level 1		Level 2		Level 3
Embedded conversion derivative liability	$	177,746	$	-	$	-	$	177,746
Warrant derivative liability		47,063		-				47,063
Total as of July 31, 2019	$	224,809	$	-	$	-	$	224,809

As of October 31, 2019
Embedded conversion derivative liability	$	203,173	$	-	$	-	$	203,173
Warrant derivative liability		47,063		-		-		47,063
Total as of October 31, 2019	$	250,236	$	-	$	-	$	250,236

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, 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
Balance at July 31, 2019	$	224,809
Fair value of derivative liability at issuance charged to debt discount		20,000
Fair value of derivative liability at issuance charged to derivative loss		22,518
Reclass to equity due to conversion		(16,994	)
Unrealized derivative gain included in other expense		(97	)
Balance at October 31, 2019	$	250,236

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 consolidated 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 (for convertible notes) based on a probability weighted discounted cash flow model, and the Montel Carlo model (for tainted warrants) based on a multipath random event model. For the three months ended October 31, 2019, assumptions used in the valuation include the following: a) underlying stock price ranging from $0.00009 to $0.00010; b) projected discount on the conversion price ranging from 40% to 58% with the notes effectively converting at discounts in the range of 56.34% to 72.65%; c) projected volatility of 309.5% to 479.8%; 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.

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, 2019 and 2018:

	Period Ended October 31, 2019			Period Ended October 31, 2018
Numerator:
Net income (loss) available to common shareholders	$	(1,204,543	)	$	45,622
Net income (loss) available to common shareholders adjusted for potential impact of the conversion of convertible notes outstanding	$	(1,204,543	)		(81,415	)
Denominator:
Weighted average common shares outstanding – basic		4,770,420,635			2,256,803,690
Plus: Incremental shares from convertible debt		-			1,420,323,254
Weighted average common shares outstanding - diluted		4,770,420,635			3,677,126,944
Net income (loss) per common share – basic	$	(0.00	)	$	0.00
Net loss per common share – diluted	$	(0.00	)	$	(0.00	)

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which affects any entity that enters into a lease (as that term is defined in ASU 2016-02), with some specified scope exceptions. The main difference between the guidance in ASU 2016-02 and current GAAP is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. The Company adopted Topic 842 on August 1, 2019. The adoption of Topic 842 did not have any impact on the company’s financial statements.