PART II AND III 2 part2-3.htm PART II AND III

 

GoChip Inc. $20,000,000 Class B Common Stock Offering Circular

(conforms to Regulation A+ Tier 1 rules)

 

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

 

Offered directly by the issuer:

 

GoChip Inc. $20,000,000 Class B Common Stock Offering

 

   Price to
public
   Underwriting
discount and
commissions
   Proceeds to
Issuer
   Proceeds to
other
persons
Per share:  $4.00    5%  $3.80   N/A
Total Minimum:  $4.00    5%  $3.80   N/A
Total Maximum:  $20,000,000    5%  $19,000,000   N/A

 

GoChip Inc.

275 Airpark Blvd Ste 100

Chico, CA 95973

(530) 591-5991

www.GoChip.com

 

Risk Factors are listed on page 3

 

Date of sale to the public - August 1, 2015

 

Page 1 of 26
 

 

Table of Contents

 

Risk Factors   3
Use of Proceeds to GoChip Inc.   4
Description of the Business   5
Management’s Discussion and Analysis of Financial Condition and Results of Operations   7
Directors, Executive Officers and Significant Employees   8
Compensation of Directors and Executive Officers   11
Security Ownership of Management and Certain Securityholders   12
Interest of Management and Others in Certain Transactions   13
Securities Being Offered   14
     
Unaudited Financial Statements   15
2013 Balance Sheet - Unaudited   15
2013 Statement of Comprehensive Income - Unaudited   16
2013 Statement of Cash Flows - Unaudited   17
2013 Changes in Stockholders’ Equity - Unaudited   18
2013 Footnotes to Financial Statements - Unaudited   19
2014 Balance Sheet - Unaudited   20
2014 Statement of Comprehensive Income - Unaudited   21
2014 Statement of Cash Flows - Unaudited   22
2014 Changes in Stockholders’ Equity - Unaudited   23
2014 Footnotes to Financial Statements - Unaudited   24
   
PART III—EXHIBITS  
Index to Exhibits   25
FlixChip Corp. Articles of Incorporation   25
Amendment to Articles of Incorporation for Name Change to GoChip Inc.   25
Bylaws   25
   
Signature   26

 

Page 2 of 26
 

 

Risk Factors

 

Management believes the most significant risk to potential shareholders is the company’s inability to drive consumer adoption. Significant consumer adoption will be required in order for the company to meet its goals. Customer acquisition costs are not yet known or predictable. If customer acquisition costs are greater than the potential profit per customer the company will not be sustainable, which will result in the loss of some or all of the value of the company’s shares.

 

The company will need adequate capital to create consumer awareness necessary to achieve critical mass required for success. As customer acquisition costs are not known, nor are the specific metrics of digital media to introduce customers to the company’s products and services known, capital requirements could exceed available capital causing a detrimental impact on the value of the company’s shares.

 

Ultimate enterprise value is directly related to consumer adoption which in turn will drive additional segments of targeted industries to develop products and services based on the Company’s media format and infrastructure. If consumer adoption is not adequate to drive these additional segments, the company will not reach its intended potential and this will result in the loss of of value or inability to create targeted value for shareholders.

 

The company plans to ultimately provide customer access to nearly all forms of digital entertainment content via its Mobile Entertainment Network. This will include short form, movie and TV content including DVR content from cable and satellite operators (Comcast, TWC, DirecTV, Dish and others), user generated content (GoPro, YouTube, Vimeo and others) and content from streaming subscription services (Amazon, Netflix, Vessel, Hulu and others). All of these sources of content have differing strategic imperatives, policies and licensing arrangements with content owners. The company’s plan to create this Mobile Entertainment Network faces numerous difficult challenges that could result in higher costs, longer implementation times or complete failure to produce the intended result, all of which would have a negative impact on shareholder value.

 

Internet access could become globally available, with reliable, cost effective and fast enough data access to make the company’s products and services less valuable to consumers. This would have a serious negative impact on the value of the company’s shares.

 

Page 3 of 26
 

 

Use of Proceeds to GoChip Inc.

 

Net funds raised (after commissions = $18,750,000) will be used to execute the company’s business plan.

 

The funds will be applied as follows:

 

$9,000,000 - Consumer awareness/marketing:

 

  Tech, entertainment, family and business travel reviewers will cause early adoption
     
  Social media advertising campaigns on all major platforms (Facebook, Twitter and others)
     
  Targeted, performance-based, digital and traditional advertising
     
  Celebrity endorsements
     
  Other

 

$4,750,000 - General expenses including sales, administration and operating capital
   
$2,000,000 - Signing bonuses for company executives, management and consultants in startup team including the founder/CEO
   
$1,500,000 - Technology development:

 

  Hardware and software development to enhance current and future products

 

$1,500,000 - Debt repayment including payments to company founder/CEO and related party enterprises as more fully defined below

 

The founder, CEO, chairman of the board of directors and majority owner of the company, along with entities he owns or has majority interest in, have provided capital loans to the business over the past several years. These loans will be partially or fully repaid upon receipt of funds from this offering. Additionally, the founder, CEO, chairman of the board of directors and majority owner of the company has worked full-time for the past several years with no compensation. In recognition of these contributions, he will receive a significant bonus, paid by the company in part or full, upon receipt of funds from this offering.

 

If the company does not sell all of the shares and therefore does not raise the full amount intended, the company will revise its use of proceeds accordingly. Management will always use its best judgment in the allocation of funds even if less than the full offering amount is received by the company.

 

THE COMPANY RESERVES THE RIGHT TO CHANGE THE USE OF PROCEEDS WITHOUT NOTICE

 

Page 4 of 26
 

 

Description of the Business

 

Over the past three years, GoChip Inc. (formerly FlixChip Corp.) has formed a world class team of experienced and well connected industry veterans. The GoChip team researched, designed, patented, prototyped, tested, refined, developed and evangelized the infrastructure and product line that forms the GoChip ecosystem. The principle products and services are:

 

GoChip - our solid-state memory, collectible, core product
   
GoChip Micro-USB - an adapter that works with our free GoChip Android Player app (available on Google Play store) to play content on GoChip media using Android smartphones and tablets
   
GoChip USB - an adapter that works with our free:

 

  GoChip OS X Player app (available on GoChip.com) to play content on GoChip media using Apple tower, desktop and notebook computers
     
  GoChip Windows Player app (available on GoChip.com) to play content on GoChip media using Windows tower, desktop and notebook computers
     
  GoChip Android Player app (available on Google Play store) to play content on GoChip media using Android TVs

 

GoChip Wi-Fi - an adapter that plays GoChip media content with:

 

  iOS devices (iPhone, iPad and iPod) with our free GoChip iOS Player app (available on Apple iTunes app store)
     
  Android devices (smartphones, tablets & TVs) with our free GoChip Android Player app (available on Google Play store)
     
  OS X devices (Apple tower, desktop and notebook computers) with our free GoChip OS X Player app (available on GoChip.com)
     
  Windows devices (tower, desktop and notebook computers) with our free GoChip Windows Player app (available on GoChip.com)

 

GoChip SecurePlay - our cloud-based infrastructure that supports all of our apps on all platforms including the content ingestion, encoding, encryption, user management authentication and rental/sales of content to refresh blank GoChips
   
GoChip TV 4K (in development) - a Roku-like or Apple TV-like set-top-box that allows users to play any content on GoChip media (prepackaged movies, TV series or refreshed content on blank GoChips) using any TV that has HDMI inputs and importantly, can support the upcoming ultra-high definition (UHD) resolutions found increasingly on new TVs

 

The entire product line and supporting infrastructure is market-ready in its consumer beta release state. Over the next two years, substantial continued new product development will happen concurrently with myriad product and service enhancements to support an ever growing number of distribution channels, content sources and use cases. The initial product launch late in 2015 will include first versions of all products/services mentioned above except GoChip TV 4K that may not be ready until early 2016. The launch assortment of GoChips will include about a dozen recently released major studio blockbuster films and TV series already contractually available to GoChip. After the initial launch, GoChip will regularly add additional new release blockbuster movie and TV series titles (on or before the availability date of the same content titles on DVD/Blu-ray) for sale to consumers. GoChip products will initially be sold on our GoChip.com website store and our Amazon.com marketplace store.

 

Page 5 of 26
 

 

The company will develop numerous additional sales channels through partners and directly over the next two years. As an example, the company executed a multi-year, multi-million dollar, exclusive international contract with a leading global distributor of entertainment products to a specific niche. Another example is the recent completion of a paid contract with a major US automaker to integrate GoChip technology into future model year cars. Similar contracts and opportunities in the consumer electronics, satellite and cable distribution and transportation industries are already being pursued.

 

GoChip has been developed by an enthusiastic, ambitious group of individuals who have contributed greatly of their time and talent. Some have received some cash compensation, some have received some equity compensation and others have not. Thus far, there are no actual employees of the company, full or part time. Upon receipt of sufficient funds from this offering, the company will gradually hire about 30 individuals permanent full time, many of whom have been significant contributors to date.

 

The company has dedicated manufacturing space at its contract manufacturing facility in Taiwan. The company has paid for and owns its printed circuit board designs, injection molds for cases and GoChips, special proprietary memory chip components, Wi-Fi firmware, software, apps and supporting infrastructure. The company currently leases one 6,000 square foot facility, in Chico, CA, where administration, creative, printing, assembly, testing, product design and technical development are being performed. The company does not own any real estate or plants. Upon receipt of sufficient funds from this offering, the company will establish a San Francisco bay area office facility to support our technology development team. Additionally, the company will open an office in the Los Angeles area to support business development, sales, marketing, advertising and other functions where the proximity to the power center of the entertainment industry is advantageous.

 

The company has not filed bankruptcy, receivership or has been a party in any similar proceeding. The company has no actual or threatened material legal proceedings against it. The company has had no recent material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.

 

Page 6 of 26
 

 

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

 

The company has been largely “stealth-developed” using funds primarily borrowed from its founder/CEO and related enterprises. The company was prelaunch, pre-revenue until early 2015. The financial statements for 2013 and 2014 reflect little insight except that relatively few dollars were spent on research and development compared with peer companies. The company has developed an entire ecosystem with the input and feedback from high level industry executives representing every area of its business landscape. On a traction per dollar basis the company has performed very admirably according to numerous people developing businesses in similar spaces. Therefore, the 2013 and 2014 financial statements show costs associated with developing the technology while working with numerous parties in companies based in several different countries. There are no significant changes in any particular category or area of the financial statements that would be useful in evaluating future business outcomes as these statements reflect developmental company time periods. As a developmental stage company funded by its founder, it has had almost no liquidity. The specific reason to raise the funds using this offering is to increase capitalization to allow for rapid product rollout, growth and market penetration.

 

The company garnered its first real revenue in the first half of 2015. The type of business the company is engaged in is highly scalable and should produce faster growing revenue than expenses (percentage) resulting in increased operating margin percent over time.

 

There is far too little operating experience to use historical financial statements to ascertain the likelihood of attaining any particular future goals.

 

The company’s plan of operation for the 12 month period following receipt of funds from this offering is well thought out and can easily be accomplished with adequate capital reserves provided by funds raised from this offering. In the event that less than $20,000,000 is raised from this offering, the company will grow correspondingly slower with fewer and smaller expenditures in advance of revenue recognition.

 

The 12 month operating plan following completion of this offering is summarized below:

 

Hire executives and key personnel as full time permanent employees
   
Establish bases of operation in SF and LA areas for technology development and business development respectively
   
Launch products to consumers using online sales (GoChip and Amazon)
   
Start public relations and consumer awareness campaign with approximately 200 high profile product reviewers and thought leading journalists (already contracted) that cover tech, entertainment, family and travel (our first four targeted demographics)
   
Use all major social platforms for pay-for-performance targeted consumer awareness and sales
   
Celebrity endorsements and cross-marketing opportunities through talent agencies
   
Co-marketing opportunities with brands, automakers and consumer electronics manufacturers
   
Co-marketing opportunities with content owners and distributors including studios, networks and OTT service providers

 

Page 7 of 26
 

 

Directors, Executive Officers and Significant Employees

 

The table below summarizes key full time contributors during the startup phase of the company. All of these individuals, and several more, are key to the growth phase of the company.

 

Name   Position   Age
Executive Officers:        
John Strisower   Founder/CEO, Secretary, Treasurer, President   53
Dennis Hupp   SVP Sales, Marketing & Operations   43
Paul Wolfe   VP Sales   53
Han Cho   VP Supply Chain   41
         
Directors:        
John Strisower   Chairman   53
         
Significant Employees:        
Hampton Maxwell   Technology Lead   36
David Kuehne   Creative Director   60

 

All of these individuals, and several more, are key to the growth phase of the company.

 

Additionally, the following individuals have agreed to full time permanent executive and/or board positions:

 

Kevin Corbett - President Deluxe Digital, Intel Capital
   
Stacy Jolna - CPO TiVo, SVP TV Guide Digital, SVP CNN
   
David Cook - President Rovi Entertainment
   
Mitch Lowe - Cofounder Netflix, cofounder/President Redbox
   
Mariana Danilovic - KPMG, Mandalay, Sony Ventures

 

Brief backgrounds of key individuals follow:

 

John Strisower

 

  GoChip Inc. - Founding CEO
     
  FlixChip Corp. - Founding CEO
    Was renamed GoChip Inc. in June 2015

 

Page 8 of 26
 

 

  PathoLase, Inc. - Founding CEO
    Medical device maker with patented market leading technology, first cleared by the FDA, first cleared in Japan and South Korea
     
  Travidia, Inc. - Founding CEO
    Internet advertising company (still operating) sold to a consortium of newspaper companies in 2011
     
  PRC Gamings Systems Inc. - Founding CEO
    Patented casino table game player tracking system company (still operating) sold to Harrah’s Entertainment
     
  Precision Resource Company, LLC - Founding CEO
    Computer networking company (still operating), sold in a management buyout
     
  BS Computer Science, California State University Chico
     
  Certified Network Engineer

 

Kevin Corbett

 

  Deluxe Digital Distribution Company 2011-2015 - President and Chief Executive
     
  MacAndrews & Forbes 2009-2011 - Executive Vice President Corporate Development
     
  Intel Corporation 1992-2009

 

  Intel Capital Media Entertainment 2007-2009 - Vice President and Managing Director
     
  Intel Digital Home Content Group 2005-2007 - Vice President and General Manager
     
  Intel Digital Platforms Group 2003-2005 - Vice President and Chief Technology Officer
     
  Intel Desktop Platforms Group 2001-2003 - Vice President Marketing and Strategy
     
  Intel Desktop Platforms Group 1997-2001 - Director Strategic Planning
     
  1992-1997 - Worldwide Regional Sales Manager, Compaq Account

 

  BS Computer Science and Engineering, Magna Cum Laude, University of Texas

 

Stacy Jolna

 

  MemeTV - Chief Marketing Officer/Cofounder
     
  Newscorp./TV Guide - Senior Vice President
     
  Fallon Worldwide - Business Lead
     
  TiVo - Chief Programming Officer/Strategic Partnerships
     
  Time Warner/CNN - SVP/Senior Executive Producer
     
  MS Journalism, Boston College

 

David Cook

 

  Rovi - Senior Vice President and General Manager Entertainment Store
     
  CinemaNow - President and COO
     
  Loudeye - Vice President of Media
     
  Widevine - advisory board member
     
  Entertainment Merchant Association - board member

 

Mitch Lowe

 

  Redbox 2003-2011 - Cofounder, Chief Operating Officer and President
     
  Netflix 1998-2003 - Cofounder, Vice President Business Development and Strategic Alliances

 

Page 9 of 26
 

 

Mariana Danilovic

 

  Hollywood Portfolio - Founder and Managing Director
     
  Infiom - CEO and Director
     
  Ultralivetv - President, CEO and Director
     
  NTN Buzztime, Inc. (AMEX:NTN) - EVP Business Development
     
  MediaZone - VP Business Development, Content Aggregation and Programming
     
  KPMG LLP Digital Media Incubator - founder and director
     
  Mandalay Entertainment - Head Business Development
     
  Sony Pictures Entertainment Venture Fund - board member
     
  Producers Guild of America - Board of Directors
     
  Academy of Television Arts and Sciences - member
     
  Tim Draper’s Zone Club - Board of Directors member
     
  Los Angeles Mayor Richard Riordan’s Digital Coast Roundtable - board member
     
  MBA - Anderson Graduate School of Management, UCLA
     
  BA Mathematics, Minor in Biomedical Engineering, UCSD

 

Dennis Hupp

 

  Universal Music Group - Vivendi Entertainment / Genius Products 2006–2012 - Senior Vice President, Sales
     
  The Walt Disney Company - Buena Vista Home Entertainment 1997–2006 - Director & Walmart Team Leader
     
  BA Speech Communication - Sales and Marketing concentration - Miami University

 

Han Cho

 

  Barnes & Noble, Inc. 2010-2011 - Senior Manager, Supply Chain Sourcing
     
  Apple, Inc. 2005-2009 - Manager, Global Supply Chain Management
     
  Motorola, Inc. 1999-2005 - Strategic Supply Chain Team Lead
     
  Caterpillar, Inc. 1997-1999 - Design Engineer

 

Notes:

 

There are no family relationships between any two members of the current or planned staff of the company
 
No members of the team have disqualifying criminal records or have filed bankruptcy in the past 5 years

 

Page 10 of 26
 

 

Compensation of Directors and Executive Officers

 

As mentioned earlier in this offering circular, the GoChip team has been enthusiastically operating with little or no compensation since its inception over three years ago. As a result, the three highest paid executives cumulatively were paid less than $100,000 in 2014, our last complete fiscal year. The company currently has only one director (of a three member board with two vacancies) who is also our founder, CEO and chairman. The company’s total board compensation during its last complete fiscal year, 2014, is zero.

 

As mentioned elsewhere in this offering circular, the company intends to compensate its team with appropriate signing bonuses and industry competitive compensation going forward following receipt of funds from this offering. As such, the top three executives of the company will be paid cumulatively approximately $750,000 per year with a cumulative total bonus pool of about $350,000 for a combined cash compensation pool of about $1,100,000 for the company’s top three executives on an annual basis.

 

The company will provide senior level executives with bonus incentive plans that will pay up to approximately 50% of their respective base salary upon attainment of 3-5 very specific objective goals agreed to in writing at the beginning of each fiscal year. The company will have three broad categories of employees: executive level, management level and staff level. Benefits will be consistently applied in each of these three levels with comparable benefits offered at similar levels for other firms with similar personnel and mission in similar geographic range.

 

The company plans to offer no more than $5,000 cash per quarter for total board of directors compensation. The company will also pay its board of directors members some equity or equity equivalent commensurate with other comparable firms. The company reserves the right to change board of directors compensation at any time, without notice. This will allow management to accommodate possible changes in strategy, competitive compensation and desired additions to the board of directors.

  

Page 11 of 26
 

 

Security Ownership of Management and Certain Securityholders

 

John Strisower, the company’s founder, CEO, chairman and primary funding source since inception, whose mailing address is 275 Airpark Boulevard, Suite 100, Chico, CA 95973, is the only beneficial owner of more than 10% of any class of the company’s stock. John Strisower owns approximately 65% of the currently outstanding Class A common stock of the company. There is no other class of stock currently outstanding.

 

The company’s Class A common stock currently outstanding has 100 votes per share.

 

The company’s Class B common stock being offered for sale with this offering circular has one vote per share. This is being done specifically so that the current management team will retain tight control of the business even after this current offering is completely sold.

 

Page 12 of 26
 

 

Interest of Management and Others in Certain Transactions

 

Other than loans provided by the founder and/or from the founder’s entities (described previously) to the company on the same basis as other lenders, there are no transactions where management has a direct or indirect personal interest.

 

Page 13 of 26
 

 

Securities Being Offered

 

The company is hereby offering for sale to the public, 5,000,000 shares of its newly created Class B common stock at a price of $4.00 per share, with a one (1) share minimum and no maximum number of shares, per buyer, up to the remaining amount available for sale without exceeding $20,000,000.

 

The Class B common stock being offered for sale herein:

 

  I. has no dividend rights
     
  II. has one vote per share which is subordinate to the Class A common currently outstanding and majority held by the company’s founder/CEO which has 100 votes per share
     
  III. has no liquidation rights
     
  IV. has no preemptive rights
     
  V. has no conversion rights
     
  VI. has no redemption provisions
     
  VII. has no sinking fund provisions
     
  VIII. has no liability to further calls or to assessment by the issuer
     
  IX. has limited control since the company’s Class A common shares have super-voting rights (100 votes per share) vs. the one vote per share of the Class B common and the Class A common is majority owned by the founder/CEO giving him majority control of the company even after the Class B common shares herein are sold out
     
  X. has no restrictions on alienability of the securities being offered
     
  XI. does not have any provision discriminating against any existing or prospective holder of such securities as a result of such securityholder owning a substantial amount of securities
     
  XII. does not have any rights of holders that may be modified otherwise than by a vote of a majority or more of the shares outstanding, voting as a class, and the class has a very small minority voting interest as described above

 

Page 14 of 26
 

 

Financial Statements

 

FlixChip Corp.

Balance Sheet - Unaudited

As of December 31, 2013

 

   Total 
ASSETS     
Current Assets     
Bank Accounts   431.38 
Total Current Assets  $431.38 
Fixed Assets     
1410 Computer Equipment and Software  $11,263.58 
1510 Accum Depr - Computer Eq&sftwr   -898.75 
Total Fixed Assets  $10,364.83 
TOTAL ASSETS  $10,796.21 
LIABILITIES AND EQUITY     
Liabilities     
Accounts Payable     
2000 Accounts Payable   1,507,067.24 
Total Accounts Payable  $1,507,067.24 
Other Current Liabilities     
2210 Notes Payable   1,782,964.45 
2211 Interest Payable   211,623.00 
2250 Stockholder Advances   50,000 00 
25500 Sales Tax Payable   145.00 
Total Other Current Liabilities  $2,044,732.45 
Total Liabilities  $3,551,799.69 
Equity     
3600 Retained Earnings   -2,063,676.59 
Net Income   -1,477,326.89 
Total Equity  -$3,541,003.48
TOTAL LIABILITIES AND EQUITY  $10,796.21 

 

2013 Balance Sheet - Unaudited

 

Page 15 of 26
 

 

FlixChip Corp.

Statement of Comprehensive Income - Unaudited

January - December 2013

 

   Total 
Income     
4010 Sales   -5,252.38 
Total Income  -$5,252.38
Cost of Goods Sold   39,638.46 
Gross Profit  -$44,890.84
Expenses     
6015 Payroll Charge   112,329.00 
622 Office Expenses   125,548.98 
6310 Prof Fees - Accounting   5,000.00 
6320 Prof Fees - Consulting   772,592.50 
6325 Prof Fees - Legal (IP/Patents)   13,851.56 
6330 Prof Fees - Legal (Corporate)   170,955.50 
636 Research & Development   10,649.57 
645 Telephone   9,673.60 
648 Travel & Entertainment   71,913.80 
Total Expenses  $1,292,514.51 
Net Operating Income  -$1,337,405.35
Other Expenses     
8025 Income Tax - State   1,050.00 
8029 Interest Expense   138,871.54 
Total Other Expenses  $139,921.54 
Net Other Income  -$139,321.54
Net Income  -$1,477,326.89

 

2013 Statement of Comprehensive Income - Unaudited

 

Page 16 of 26
 

 

FlixChip Corp.

Statement of Cash Flows - Unaudited

January - December 2013

 

   Total 
OPERATING ACTIVITIES     
Net income   -1,477,326.89 
Adjustments to reconcile Net Income to Net Cash provided by operations:     
Accounts Receivable   7,220.00 
Inventory Asset   32,000.28 
Accounts Payable   773,821.44 
Notes Payable   517,707.44 
Interest Payable - Notes Payable   138,871.54 
Net cash provided by operating activities  -$7,706.19 
INVESTING ACTIVITIES     
Computer Equipment and Software   1,683.25 
Net cash provided by investing activities  $1,683.25 
Net cash increase for period  -$6,022.94 
Cash at beginning of period   6,454.32 
Cash at end of period  $431.38 

 

2013 Statement of Cash Flows - Unaudited

 

Page 17 of 26
 

  

FlixChip Corp.

Change in Stockholders’ Equity - Unaudited

January - December 2013

 

    Class A
Common Stock
($1 Par)
    Retained
Earnings
    Total
Stockholders’
Equity
 
Balance of January 1  -$2,063,676.59        -$2,063,676.59 
                
Net Income       -$1,477,326.89   -$1,477,326.89 
                
Balance on December 31  -$2,063,676.59   -$1,477,326.89   -$3,541,003.48 

 

2013 Change in Stockholders’ Equity - Unaudited

 

Page 18 of 26
 

 

2013 Footnotes to Financial Statements - Unaudited

 

1. Statement of Comprehensive Income is reported using accrual method
   
2.   Inventory is counted at actual cost on a first-in, first-out basis

  

Page 19 of 26
 

  

FlixChip Corp.
Balance Sheet - Unaudited

As of December 31, 2014

 

   Total 
ASSETS    
Current Assets     
Bank Accounts   1,332.94 
Total Bank Accounts  $1,332.94 
Total Current Assets  $1,332.94 
Fixed Assets     
1410 Computer Equipment and Software   5,128.96 
1510 Accum Depreciation   2,508,70 
Total Fixed Assets  $7,637.66 
TOTAL ASSETS  $8,970.60 
LIABILITIES AND EQUITY     
Liabilities     
Accounts Payable     
2000 Accounts Payable   1,991,685.71 
Total Accounts Payable  $1,991,685.71 
Other Current Liabilities     
2210 Convertible Notes Payable   1,197,748.09 
2211 Interest Payable   152,710.65 
2250 Stockholder Advances   50,000.00 
25500 Sales Tax Payable   0.00 
Total Other Current Liabilities  $1,400,458.74 
Total Liabilities  $3,392,144.45 
Equity     
3100 Common Stock   1,032,600.00 
3600 Retained Earnings   -3,541,003.48 
Net Income   -874,770.37 
Total Equity  $3,383,173.85 
TOTAL LIABILITIES AND EQUITY  $8,970.60 

 

2014 Balance Sheet - Unaudited

 

Page 20 of 26
 

 

FlixChip Corp.
Statement of Comprehensive Income - Unaudited

January - December 2014

 

   Total 
Income    
4010 Sales   1,304.90 
Total Income  $1,304.90 
Cost of Goods Sold   10,545.53 
Gross Profit  $9,240,639
Expenses     
6035 Advertising & Marketing   10,028.09 
6090 Depreciation   1,950.06 
6130 Dues and Subscriptions   1,236.06 
6135 Equipment & Software   1,857.17 
6200 Licenses and Permits   8,425.00 
6220 Office Expenses   103,475.43 
6320 Prof Fees - Consulting   530,865.60 
6325 Prof Fees - legal (IP/Patents)   1,321.00 
6330 Prof Fees - Legal (Corporate)   9,743.61 
6395 R&D - Product Development   2.236.51 
6450 Telephone   7,930.53 
6480 Travel & Entertainment   54,602.54 
Total Expenses  $733,669.50 
Net Operating Income  -$742,910.22 
Other Income     
7065 Gain/loss on Disposal of Asset   -1,857.50 
Total Other Income  -$1,857.50 
Other Expenses     
8025 Income Tax - State   800,00 
8029 Interest Expenses   1,29,202.65 
Total Other Expenses  $130,00.65 
Net Other Income  -$137860.15 
Net Income  -$874,770.37 

 

2014 Statement of Comprehensive Income - Unaudited

 

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FlixChip Corp.

Statement of Cash Flows - Unaudited 

January - December 2014

 

   Total 
OPERATING ACTIVITIES     
Net Income  -$874,770.37 
Adjustments to reconcile Net Income to Net Cash provided by operations:     
Accounts Payable  $484,473.47 
Notes Payable  -$585,216.36 
Interest Payable - Notes Payable  -$58,912.35 
Net cash provided by operating activities  -$1,034,425.61 
INVESTING ACTIVITIES     
Computer Equipment and Software  $6,134.62 
Accum Depr - Computer Eq&sftwr  -$3,407.45 
Net cash provided by investing activities  $2,727.17 
FINANCING ACTIVITIES     
Common Stock  $1,032,600.00 
Net cash provided by financing activities  $1,032,000.00 
Net cash increase for period  $901.56 
Cash at beginning of period  $431.38 
Cash at end of period  $1,332.94 

 

2014 Statement of Cash Flows - Unaudited

 

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FlixChip Corp.

Change in Stockholders’ Equity - Unaudited 

January - December 2014 

 

   Class A
Common Stock
($1 Par)
   Retained
Earnings
   Total
Stockholders’
Equity
 
Balance of January 1  -$3,541,003.48        -$3,541,003.48 
                
Issued Shares for Cash  $1,032,600.00        $1,032,600.00 
                
Net Income       -$874,770.37   -$874,770.37 
                
Balance on December 31  -$2,508,403.48   -$874,770.37   -$3,383,173.85 

 

2014 Change in Stockholders’ Equity - Unaudited

 

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2014 Footnotes to Financial Statements - Unaudited

 

1. Statement of Comprehensive Income is reported using accrual method
   
2.   Inventory is counted at actual cost on a first-in, first-out basis
   
3.   All class A common stock sold during the reporting period was due to convertible note holders’ elections to convert from debt to equity, converting all outstanding principal and interest due to class A common shares at $1.00/share

 

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PART III—EXHIBITS

 

Index to Exhibits

 

FlixChip Corp. Articles of Incorporation    
Amendment to Articles of Incorporation for Name Change to GoChip Inc.    
GoChip Inc. (formerly FlixChip Corp.) Bylaws    

  

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Signature

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chico, State of California, on July 27, 2015.

  

GoChip Inc.  
     
By: /s/ John Strisower  
Name: John Strisower  
Title: Founder, CEO, President, Secretary, Treasurer and Chairman of the Board of Directors

   

As the only current Board of Directors member, the only current executive officer and as the sole corporate officer signatory, John Strisower is the only signatory necessary for this offering circular.

 

A hand signed version of this document will be retained by GoChip Inc. for a period of 5 years pursuant to the Form 1-A process instructions.

 

Signature   Title   Date
         
/s/ John Strisower   Founder, CEO, President, Secretary,   July 27, 2015
John Strisower   Treasurer and Chairman of the Board of Directors    

 

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