RELATED PARTY NOTES PAYABLE AND OTHER RELATED PARTY TRANSACTIONS

9 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

RELATED PARTY NOTES PAYABLE AND OTHER RELATED PARTY TRANSACTIONS

NOTE 4-RELATED PARTY NOTES PAYABLE AND OTHER RELATED PARTY TRANSACTIONS

The Company recorded compensation expense to its related party of $15,000 and $15,000 for three-month periods ended December 31, 2020 and 2019, and $45,000 and $45,000 for nine-month periods ended December 31, 2020 and 2019, respectively. The Company employed its founder under an employment agreement which started on March 31, 2017 and provided for a salary of $5,000 per month for the first twelve (12) months, and on March 1^st, 2018 increased to $5,500 per month for the next twelve (12) months. This employment agreement administratively terminated on February 28, 2019, both the related party and the Company agreed to limit the annual salary to $60,000 per year or $5,000 per month. Accrued compensation payable of $236,500 and $191,500 is due and payable as of December 31, 2020 and March 31, 2020, respectively.

On December 31, 2017, the Company executed a promissory note with its related party, Mr. Robert Dolan, Chief Executive Officer of the Company in the amount of $6,000. The unsecured note payable bears interest at 0% per annum and is due upon demand. The outstanding balance for the related party promissory note(s) due to Mr. Dolan as of December 31, 2020 and March 31, 2020 was $58,822 and $56,921 respectively. During the year ended March 31, 2020 the Company borrowed money from an investor who became a shareholder of the Company through its direct public offering. This amount was negligible and amounted to $25 as of December 31, 2020 and March 31, 2020 owing to this shareholder. As of December 31, 2020 total related party promissory notes was $58,847 which contains Mr. Dolan’s related party note balance of $58,822 and $25 owed to Mr. Wesley Fry. Mr. Fry’s unsecured note payable bears interest at 0% per annum and is due upon demand. Mr. Fry’s total ownership is less than 5% in the Company’s common stock. The Company used these related party funds for working capital purposes and for the development of its proto-type GPods solution which it has capitalized for each period presented.

During fiscal year ending March 31, 2018 the Company recorded and capitalized $8,000 in intangible assets that were purchased from our founder. The Company valued these assets in an arms-length manner. The Company and its board of directors is in discussion to obtain settlement of the related party notes payable and accrued compensation due to related party at the same offering price and terms that the Company is currently seeking with its most recent capital raise (see Note 9-Subsequent Events). No definitive agreement has been entered into as of the date of this report.

We had accounts payable balances due and owing to two vendors that became related parties during the year ended March 31, 2019 due to their ownership in the Company. The two related parties, were W270 Systems, SA, a Costa Rican corporation, and DLE Consulting a business domiciled here in the US, and their respective principals, Mr. Fry and Mr. Dave Estus, who each executed subscription agreements with the Company through its registered public offering and invested in the Company’s common stock. Messrs. Fry and Estus each received 250,000 shares of common stock of the Company, representing 1.43% ownership (less than 5% ownership) in the Company or as a group a total of 2.86%. The related party accounts payable balance for the two vendors (one vendor after August 31, 2020) totaled $266,000 at December 31, 2020 and $477,000 at March 31, 2020 (see as described below DLE Consulting and Mr. Estus ceased to be related parties as of August 31, 2020 and represents a sizeable portion of the decrease in the related party accounts payable balance as of September 30, 2020). For the nine-month period ended December 31, 2020 the related party accounts payable balances increased by $73,200 and decreased by $254,600 representing DLE Consulting accounts payable balance recharacterized as a non-related party accounts payable balance.

Capitalized Internal use – Software increased during the nine-month period ended December 31, 2020 by $20,400. As described in Note 3 above the Company capitalizes approximately 50% of the costs incurred to develop its internal use software in accordance with GAAP. Other costs incurred with respect to this vendor are expensed as incurred; during the three-month and nine-month period ended December 31, 2020 this amounted to $5,200 and $20,400, respectively. For the nine-month period ended December 31, 2020 we capitalized internal use software of $20,400 and expensed $20,400 in software development expenses.

Capitalized costs – prototype increased during the nine-month period ended December 31, 2020 by $76,573. As described in Note 3 above the Company capitalizes approximately 100% of the costs incurred to develop its prototype product in accordance with GAAP. Of the $76,573 in costs capitalized, $71,200 was incurred with respect to the DLE vendor, and $5,373 in costs that our CEO and President, Mr. Dolan had incurred during the three-month period. The related party vendor and non-related party vendor have agreed to defer all payments on their accounts payable balances until the Company has secured sufficient financing.

As described in Note 5-Notes Payable and Investor Stock Payable DLE Consulting and Mr. Estus ceased to be related parties due to Mr. Estus ownership in 250,000 shares of common stock of the Company. Mr. Estus is owed a note payable bearing no interest under the agreement that he entered into with the Company to purchase his common stock. The Company owes Mr. Estus approximately $2,500 and intends on making payment as reasonably possible. The Company has reduced its Related Party Accounts Payable by $254,600 and increased its Accounts Payable and Accrued Other by $254,600. This was a non-cash transaction for financial statement purposes and only represents the recharacterization of accounts payable from related party to non-related party. In our Statement of Cash Flows, we have recharacterized the capitalized costs from related party to non-related party as of August 31, 2020 for the nine-month period ended September 30, 2020. DLE Consulting billed for approximately $38,400 in consulting services after August 31, 2020 that were capitalized as Proto-Pod Capitalized Costs.