0001144204-15-062816.txt : 20151104 0001144204-15-062816.hdr.sgml : 20151104 20151104170725 ACCESSION NUMBER: 0001144204-15-062816 CONFORMED SUBMISSION TYPE: 10-12G/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20151104 DATE AS OF CHANGE: 20151104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TBC GLOBAL NEWS NETWORK, INC. CENTRAL INDEX KEY: 0001099234 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-VIDEO TAPE RENTAL [7841] IRS NUMBER: 541838089 STATE OF INCORPORATION: NV FISCAL YEAR END: 1209 FILING VALUES: FORM TYPE: 10-12G/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-29113 FILM NUMBER: 151197793 BUSINESS ADDRESS: STREET 1: 819 D AVENUE CITY: NATIONAL CITY STATE: CA ZIP: 91950 BUSINESS PHONE: 6193869185 MAIL ADDRESS: STREET 1: 819 D AVENUE CITY: NATIONAL CITY STATE: CA ZIP: 91950 FORMER COMPANY: FORMER CONFORMED NAME: GAMEZNFLIX INC DATE OF NAME CHANGE: 20040409 FORMER COMPANY: FORMER CONFORMED NAME: POINT GROUP HOLDINGS INCORP DATE OF NAME CHANGE: 20030224 FORMER COMPANY: FORMER CONFORMED NAME: SYCONET COM INC DATE OF NAME CHANGE: 20000119 10-12G/A 1 v423719_10-12ga.htm FORM 10-12G/A

 

U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10/A

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

(Name of Small Business Issuer in Its Charter)

 

Nevada   47-3903460 .
(State or Other Jurisdiction of   (I.R.S. Employer Identification No.)
Incorporation or Organization)    

 

1950 Fifth Avenue, Suite 100, San Diego, California   92101
(Address of Principal Executive Offices)   (Zip Code)

 

Issuer’s telephone number: (619) 934-0586

 

Securities to be registered pursuant to Section 12(b) of the Act:

 

Title of each class   Name of each exchange on which
to be so registered   each class is to be registered

 

None  
     
None  

 

Securities to be registered pursuant to Section 12(g) of the Act:

 

Common Stock
(Title of Class)
 
None
(Title of Class)

 

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

 

Large accelerated filer  ¨ Accelerated filer  ¨
   
Non-accelerated filer  ¨ Smaller reporting company x

 

 

 

 

ITEM 1. BUSINESS.

 

Business Development.

 

InCapta, Inc. (formerly known as TBC Global News Network, Inc.) (“Company”) was formed in Delaware in June 1997 under the name SyCo Comics and Distribution Inc. and is the successor to a limited partnership named SyCo Comics and Distribution formed under the laws of the Commonwealth of Virginia on January 15, 1997, by Sy Robert Picon and William Spears, the co-founders and principal stockholders of the Company. On February 17, 1999, SyCo Comics and Distribution Inc. changed its name to Syconet.com, Inc. With the filing of Articles of Merger with the Nevada Secretary of State on April 12, 2002, the Company was redomiciled from Delaware to Nevada, and its number of authorized common shares was increased to 500,000,000 (see Exhibits 2.1 and 3.1).

 

On November 21, 2002, the Company amended its articles of incorporation changing its name to Point Group Holdings, Incorporated (see Exhibit 3.2). On March 5, 2003, the Company again amended the articles of incorporation so that (a) an increase in the authorized capital stock of the Company can be approved by the board of directors without shareholder consent; and (b) a decrease in the issued and outstanding common stock of the Company (a reverse split) can be approved by the board of directors without shareholder consent (see Exhibit 3.3). On July 11, 2003, the Company amended its articles of incorporation to increase the number of authorized common shares to 900,000,000 (see Exhibit 3.4). On January 26, 2004, the name of the Company was changed to “GameZnFlix, Inc” by the filing of amended articles of incorporation (see Exhibit 3.5).

 

On December 16, 2004, the Company amended the articles of incorporation to increase the authorized common stock of the Company to 2,000,000,000 shares (see Exhibit 3.6). On July 19, 2005, the articles of incorporation were further amended to increase the number of authorized common shares to 4,000,000,000 (see Exhibit 3.7), and on March 21, 2006 increased to 25,000,000,000 (see Exhibit 3.8). On September 6, 2007, a 1,000 to 1 reverse split of common stock took place. On December 31, 2007, 100,000,000 shares of Series B common stock and 10,000,000 shares of preferred stock were created by an amendment to the articles of incorporation, along with reducing the authorized common stock to 5,000,000,000 shares (see Exhibit 3.9). On April 9, 2009, a 10,000 to 1 reverse split of the Company’s common stock became effective.

 

During the period of July 2002 to September 2002, the Company acquired AmCorp Group, Inc., a Nevada Corporation, and Naturally Safe Technologies, Inc. also a Nevada corporation. In February 2005, AmCorp amended its articles of incorporation, changing its name to GameZnFlix Racing and Merchandising, Inc. AmCorp provided services to companies that desired to be listed on the OTCBB and Naturally Safe held patents on a product that assisted Christmas trees in retaining water. Both these companies have ceased operations. In September 2003, the Company acquired Veegeez.com, LLC, a California limited liability company. This company has ceased operations.

 

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On April 30, 2009, the Company entered into an Acquisition Agreement with TBC Today, Inc., a Nevada corporation, where the Company acquired all of the outstanding common stock of TBC. Under this agreement, all 11,000,000 shares of TBC Today, Inc. common stock issued and outstanding will be acquired by the Company for 11,000,000 shares of restricted common stock of the Company. On August 14, 2009, the Company issued 11,000,000 restricted shares of common stock to the shareholders of TBC Today, Inc. in completing this acquisition. This company has ceased operations.

 

On May 7, 2009, the Company filed a Certificate of Amendment to Articles of Incorporation with the Nevada Secretary of State (see Exhibit 3.10). This amendment changed the name of the Company to TBC Global News Network, Inc. This corporate action had previously been approved by consent of a majority of the outstanding shares of common stock of the Company.

 

On March 19, 2010, the Company entered into a Purchase and Sale Agreement with Sterling Yacht Sales, Inc. and it stockholders, Glenn W. McMachen, Sr., and Arlene McMachen (see Exhibit 2.2). Under the terms of this agreement, the Company agreed to acquire 100% of the issued and outstanding common stock of Sterling. In return, the Company agreed to issue restricted shares of Company common stock to Sterling’s stockholders in an aggregate amount resulting in an 82.5% ownership of the Company by those individuals.

 

On September 1, 2014, the Company determined that Sterling and its stockholders materially breached this agreement and therefore the agreement is null and void. Therefore, Sterling is not a subsidiary of the Company and the Company has no further obligations under this agreement.

 

On April 27, 2015, a 3,000 to 1 reverse split of the Company’s common stock became effective.

 

On September 3, 2015, the Company completed an Acquisition Agreement under which the Company acquired all of the equity interests of Stimulating Software, LLC, a Florida limited liability company formed on November 5, 2014 (“Stimulating Software”), the acquisition of all the common stock of Inner Four, Inc., a Florida corporation formed on June 19, 2007 (“Inner Four”), and all of the common and preferred stock of Play Celebrity Games, Inc., a Delaware corporation formed on June 5, 2015 (“Play Celebrity”). This acquisition was accomplished through a payment by the Company of common stock and preferred stock. This Acquisition is providing assets and revenues to the Company as Inner Four has had revenues and operations from 2007 to the present. See Exhibit 2.3.

 

Under the Acquisition Agreement, the Company paid to John Swartz, the owner of all the outstanding shares of Inner Four and Stimulating Software, 2,575 restricted shares of Company Series A preferred stock. Mr. Swartz will enter into a consulting agreement with the Company under which he is paid 3,307,420 restricted shares of Company common stock. As the consideration for the sale of the Play Celebrity stock to the Company, the Company issued to Team AJ and Chasin an aggregate of 1,500 restricted shares of Series A preferred stock of the Company, and 27,429,000 restricted shares of the Company common stock. A portion of these shares was transferred to AF Trust Company, a Florida corporation, and Kaptiva Group, LLC, a Florida limited liability company. All of the shares of common and preferred stock have registration rights as set forth in a Registration Rights Agreement.

 

Under the Acquisition Agreement, the Company has the option to purchase other companies owned by Mr. Swartz, namely Navy Duck, LLC, a Florida limited liability company, Ocean Red, LLC, a Florida limited liability company, and Purple Penguin.com, Inc., a Florida corporation. Should the Company exercise this option it will pay Mr. Swartz the sum of $1,500,000, with certain adjustments as specified in the Agreement.

 

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As part of this Acquisition, the Company entered into a Design and License Agreement with Navy Duck, Ocean Red, and Purple Penguin.com, Inc.

 

Effective on October 21, 2015, the Company filed a Certificate of Amendment with the Nevada Secretary of State to change its name from “TBC Global News Network, Inc.” to “InCapta, Inc.”

 

Current Business of the Company.

 

The acquisition of Inner Four, Stimulating Software and Play Celebrity leads to a business model that allows for the development of new rebranded games. Stimulating Software is a more free to play versus Inner Four which is a pay to play business model. Stimulating Software and Inner Four (both referred to as “GameCo”) have over 500 active and inactive mobile games and have over 35,000,000 installs on mobile devices. The distinction between the companies is the free to play or commonly referred to as “freemium” and the pay to play which is when users need to purchase the mobile application in the their respective app store.

 

The Company does not use a standard pay to play system for any of its apps, as the Company wants its users to be able to choose between paying or working for their rewards. The Company’s freemium games offer in-app purchases to unlock additional features. Users who do not wish to pay also have the choice of watching a 30-second video ad to earn in-app currency which can be used to unlock the same items. Over the period of June 30, 2015 through October 25, 2015, the Company generated $14,209 in sales from freemium games ($9,945 in proceeds after Apple takes its cut.

 

For freemiums (which commenced on June 30, 2015) there have been 859,130 (1,105,131) total installs (June 30, 2015 through September 30, 2015); monthly installs (for July, August and September 2015) have averaged 286,377 (368,377) per month. There have been total installs of 875,898 for pay to play, with an average monthly of 19,041 since late January 2009.

 

Play Celebrity brings agreements to create mobile games for artists, celebrities and athletes. Play Celebrity has an agreement with Top Fan to create exciting products for the fans of these celebrities. The combined 500 mobile games is a starting point for the business model on a go forward basis. The GameCo mobile apps combined with the celebrities, artists and athletes that are apart of Play Celebrity makes for a business model that allows the company to build new applications by using the games that are already developed. An example of this is the Kim Kardashian application launched in 2014. This application was previously titled twice before finally becoming a hit game featuring Kim Kardashian (commonly referred to as “Re-Skinning”). The positive side of re-skinning an existing game is significant. As an example, by resigning you save time, development costs are significantly reduced, testing the product and removing bugs is eliminated or significantly reduced and time to get to market is accelerated from months to days.

 

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The combined company will take the 500 existing games and begin the process of re skinning these games for artists and celebrities. The Company is geared to have Purple Penguin (owned by the previous owner of these 3 companies) perform the re-skinning. The Company has established a license agreement with Purple Penguin that allows the company to pay $500 as an advance on royalties (20% royalty will be paid to Purple Penguin) for Purple Penguin to create the new re-skinned game and prepare it for launch.

 

The marketing plan for the company involves two key ingredients. The first ingredient is to market new celebrity games to our existing user base. The second key ingredient is to have the artist, celebrity or athlete market the product to their fan base using social networks and other available media. This marketing plan is designed to keep the Company’s marketing expenses marginal and at the same time allow the Company to continue to expand its base of users.

 

The combined companies currently have over 1,000,000 monthly active users or installs. The majority of these installs come from new products under stimulating software and from legacy installations from Inner Four. The vast majority of the games is available in the iTunes store today and can be ported to Google, Amazon and other distribution points. This store expansion is key to the Company’s 12-month strategy. It is the Company’s goal to have as many games available on as many available platforms by the end of 2015 into early 2016. Further, the Company will begin creating and releasing new re-skinned games in the near future.

  

The Company sees tremendous competition in the gaming application space. However, the Company believes there is little competition in the celebrity space. The Company believes the primary reasons for the lack of competition in this space is the difficulty to come to an agreement with the celebrity, the significant costs and time to create a new game and the ability for companies to raise the capital without demonstrating a proof of business model at scale. The Company believes it is ahead of the current competition as it has reduced the costs of creating the underlying apps/games, has signed an agreement (Play Celebrity with Top Fan) to contact the artists, celebrities and athletes, has a large library of games that currently generate revenue.

 

The business will incorporate many new strategies in attracting new users, retaining new users and expanding its core platform. Some of these strategies will include the use of licensed music, videos and other content. These strategies we believe allow us to distinguish our celebrity games from other games in the market place. The current marketplace does not have a lot of licensed music content application or a lot of licensed video content either. The Company also intends to work closely with new partners to develop a social network that underlies our platform. With so many games and with a large current monthly user base, the Company believes it can establish a core social network for the users to share in their game and fan experiences The agreement between Play Celebrity and Top Fan allows for those types of social behaviors to occur.

 5 

 

 

At the present time, the Company has only one employee, John Fleming.

 

ITEM 1A. RISK FACTORS.

 

Risks Related to the Business of the Company.

 

(a)          Very Limited Operations During Past Five Years May Affect Ability of Company to Survive.

 

The Company has had no operations from August 2010 to August 2014; prior to that it had a substantial record of revenue-producing operations. Consequently, there is only a limited operating history upon which to base an assumption that the Company will be able to achieve its business plans. In addition, the Company has limited assets. As a result, there can be no assurance that the Company will generate significant revenues in the future; and there can be no assurance that the Company will operate at a profitable level. If the Company is unable to obtain or acquire a business and generate sufficient revenues so that it can profitably operate, the Company’s business plan will not succeed. Accordingly, the Company’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered in connection with the establishment of a new business.

 

The Company incurred a net loss of $7,308 for the year ended December 31, 2013, net income of $3,096,662 (due solely to a debt write-off) for the year ended December 31, 2014, and a net loss of $73,862 for the six months ended June 30, 2015. As of June 30, 2015, the Company has an accumulated deficit of $74,448,788. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

(b)          The Independent Registered Public Accounting Firm Has Expressed Substantial Doubt About the Company’s ability to Continue as a Going Concern, Which May Hinder the Ability to Obtain Future Financing.

 

In its report dated August 5, 2015, the Company’s independent auditor stated that the financial statements for the two years ended December 31, 2014 were prepared assuming that the Company would continue as a going concern. The Company's ability to continue as a going concern is an issue raised as a result of cash flow constraint, an accumulated deficit, and recurring losses from operations. The Company continues to experience net losses. The Company's ability to continue as a going concern is subject to the ability to execute a business combination and thereafter to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of the Company's securities, increasing sales or obtaining loans from various financial institutions where possible. The continued net losses and stockholders' deficit increases the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

 

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(c)          The Company Has Issued and in the Future May Issue More Shares in an Acquisition, Which May Result in Substantial Dilution.

 

Under the Acquisition Agreement dated September 3, 2015, the Company issued a total of 43,355,680 shares of common stock. Under this Agreement, the Company is obligated to issue additional shares to the 4 companies controlled by John Acunto so that they collectively own 70% of the issued and outstanding common stock of the Company. The Company will make the determination in the near future as to when to issue these additional shares of common stock. Under the Agreement, the Company also issued a total of 4,725 shares of Series A preferred stock. Each share of convertible preferred stock is convertible, at the option of the holder, at any time into the number of fully paid and nonassessable shares of Company common stock as determined by dividing 1,000 by the amount that is a 10% discount to the average of the closing price per share of the Company’s common stock on the exchange on which this common stock is traded over the 10 trading day period ending immediately prior to the conversion date. These issuances result in substantial dilution to existing stockholders of the Company.

 

Any further acquisition effected by the Company may also result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of the Company’s common stock held by its then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by the Company’s then existing stockholders. The Company’s Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a business combination or otherwise, dilution to the interests of its stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.

 

(d)          Games Could Become Obsolete Which Could Affect Revenue.

 

The games we own and operate could become obsolete by the release of new technologies in the smart phone space.

 

(e)         Games Could be Removed by Resellers Which Could Affect Revenue.

 

The games the Company now owns and operates could also be removed by its resellers Apple’s iTunes, Google’s Google Play store, or Amazon. These companies have the right to remove any game for any reason they deem fit. The Company would not have the capital to sustain a litigation in the event the Company believes its games were removed for invalid reasons.

 

 7 

 

 

The Company’s subsidiaries have entered into agreements with these companies, as follows:

 

·Stimulating Software: Apple’s iTunes, Google’s Google Play, and Amazon.

 

·Inner Four: Apple’s iTunes and Google’s Google Play.

 

·Play Celebrity: Apple’s iTunes.

 

These agreements were accepted by clicking on an ”Agree” button online. These agreements are attached as Exhibits 10.3, 10.4, and 10.5 to this Form 10.

 

(f)          Account Could be Suspended Which Could Affect Company Operations.

 

The Company’s App resellers such as Apple, Google and Amazon could suspend the Company’s entire account if it submitted an inappropriate application. This could cause significant customer service issues and impact our revenue stream. The main cause if the automation system used to approve applications. The Company intends to submit celebrity applications that use the name and likeness of famous individuals. This can cause the automated system to reject the application and cause all of our applications in that account to be suspended until the application is approved by a human being at the reseller.

 

(g)          Game and Application Business is Very Competitive.

 

The game and application business has exploded over the past seven years, especially since the launch of the smart phone. Today, there are over 1,000,000 game and application developers worldwide. The Company believes all of these companies could potentially replicate the Company’s business model in some way, shape or form. The application space is very crowded and according to www.statista.com there are over 5,000,000 mobile applications with over 1.8 billion users. The Company currently owns several hundred applications which represents a fraction of the number of applications and therefore makes getting our applications noticed and attracting users very challenging.

 

With so many applications and companies generating over 1 billion dollars in annual revenues, it can be challenging to acquire new users. The average cost of a new user ranges from $2.50 to as high as $11.00. This cost to acquire a user can contribute to a drain of the Company’s cash flow and capital reserves. Further, the Company believes that its system of marketing to existing users reduces its costs. In the event that the Company’s application distribution points exclude outside advertising within the applications its ability to reduce user acquisition cost could be significantly higher.

 

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(h)         Celebrity Agreements Could be Uncertain.

 

The Company will sign agreements to provide applications and games to celebrities. These celebrities can pose a risk to the company in several areas. First, the celebrity could withdraw the Company’s right to use their re likeness and image due to movie rights, music holder rights or other rights that their agreements with us would allow them to rescind there agreement with us to use their likeness and image. Second, the celebrity could be frustrated by their fans reaction to the game and claim the game is affecting their brand or their likeness value and the marketplace and could terminate the agreement and the use of their likeness and image in the game. Last, the celebrity could have a series of bad press, commit a crime or do something that may injure our reputation causing us to remove the availability of the game despite it’s popularity or revenue.

 

(i)          No Assurance of Funding.

 

There is no guarantee that funding sources, or any others, will be available in the future, or that they will be available on favorable terms. In addition, this funding amount may not be adequate for the Company to fully implement its business plan. Thus, the ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s business plan. Regardless of whether the Company’s cash assets prove to be inadequate to meet the Company’s operational needs, the Company might seek to compensate providers of services by issuance of stock in lieu of cash.

 

If funding is insufficient at any time in the future, the Company may not be able to take advantage of business opportunities or respond to competitive pressures, or may be required to reduce the scope of its planned product development and marketing efforts, any of which could have a negative impact on its business and operating results. In addition, insufficient funding may have a material adverse effect on the Company’s financial condition, which could require the company to:

 

·curtail operations significantly;

 

·sell assets;

 

·seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights to products, technologies or markets; or

 

·explore other strategic alternatives including a merger or sale of the Company.

 

To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on the Company’s operations. Regardless of whether the Company’s access to financing proves to be inadequate to meet the Company’s operational needs, the Company may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing stockholders.

 

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(j)          The Company May Be Subject to Certain Tax Consequences in Its Business, Which May Increase the Cost of Doing Business.

 

The Company may not be able to structure its acquisition to result in tax-free treatment for the companies or their stockholders, which could deter third parties from entering into certain business combinations with the Company or result in being taxed on consideration received in a transaction. Currently, a transaction may be structured so as to result in tax-free treatment to both companies, as prescribed by various federal and state tax provisions. The Company intends to structure any business combination so as to minimize the federal and state tax consequences to both us and the target entity; however, the Company cannot guarantee that the business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes that may have an adverse effect on both parties to the transaction.

 

(k)          The Company May Be Subject to Further Government Regulation That Would Adversely Affect Its Operations.

 

Although the Company will be subject to the reporting requirements under the Exchange Act, management believes it will not be subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), since it will not be engaged in the business of investing or trading in securities. If we engage in business combinations that result in our holding passive investment interests in a number of entities, the Company could be subject to regulation under the Investment Company Act. If so, the Company would be required to register as an investment company and could be expected to incur significant registration and compliance costs. The Company has obtained no formal determination from the SEC as to our status under the Investment Company Act and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.

 

(l)          The Company’s Success Is Largely Dependent on the Abilities of Its Personnel.

 

The Company’s success is dependent upon the hiring of qualified administrative personnel. The Company’s officer and director does not have an employment agreement with the Company; therefore, there can be no assurance that this person will remain employed by the Company. In addition, the Company’s success is also dependent on the services of John Swartz and other independent contractors to operate the acquired companies. Some of these individuals, such as Mr. Swartz, have a consulting agreement with the Company. In addition, the Company has retained Chad Antonson as acting Chief Technology Officer under a consulting agreement until the beginning of 2016 to reorganize and bring in-house staff of design/developer/programmers. 

 

Should any of these individuals cease to be affiliated with the Company for any reason before qualified replacements could be found, there could be material adverse effects on the Company’s business and prospects in that replacement personnel may not understand the proposed business of the company. Also, the Company does not carry any key person insurance on any of the officers and directors of the Company.

 

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(m)          Limitations on Liability, and Indemnification, of Directors and Officers May Result in Expenditures by Company.

 

The Company’s articles of incorporation include provisions to eliminate, to the fullest extent permitted by the Nevada Revised Statutes as in effect from time to time, the personal liability of directors of the Company for monetary damages arising from a breach of their fiduciary duties as directors. The bylaws of the Company also include provisions to the effect that the Company may indemnify any director, officer, or employee. Any limitation on the liability of any director, or indemnification of directors, officer, or employees, could result in substantial expenditures being made by the Company in covering any liability of such persons or in indemnifying them.

 

Risks Relating to the Company’s Common Stock.

 

(a)          The Company’s Common Stock May Be Traded Infrequently and In Low Volumes, Which May Negatively Affect the Ability to Sell Shares.

 

The shares of the Company’s common stock may trade infrequently and in low volumes on the OTC Markets Group, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation may be attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who can generate or influence sales volume, and that even if we came to the attention of such institutionally oriented persons, they tend to be risk-averse in this environment and would be reluctant to follow an early stage company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in the Company’s shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price.  The Company cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained.  Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares.  Further, institutional and other investors may have investment guidelines that restrict or prohibit investing in securities traded in the over-the-counter market.  These factors may have an adverse impact on the trading and price of our securities, and could even result in the loss by investors of all or part of their investment.

 

(b)          The Company’s Common Stock Price May Be Volatile.

The future trading price of the Company’s common stock may fluctuate substantially. The price of the common stock may be higher or lower than the price you pay for your shares, depending on many factors, some of which are beyond the Company’s control and may not be directly related to its operating performance. These factors include the following:

 

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·price and volume fluctuations in the overall stock market from time to time;

 

·significant volatility in the market price and trading volume of securities of business development companies or other financial services companies;

 

·changes in regulatory policies with respect to business development companies;

 

·actual or anticipated changes in earnings or fluctuations in operating results;

 

·general economic conditions and trends;

 

·loss of a major funding source; or

 

·departures of key personnel.

 

Due to the continued potential volatility of the stock price, the Company may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from the business.

 

(c)          Absence of Cash Dividends May Affect Investment Value of the Company’s Stock.

 

The board of directors does not anticipate paying cash dividends on the common stock for the foreseeable future and intends to retain any future earnings to finance the growth of the Company’s business. Payment of dividends, if any, will depend, among other factors, on earnings, capital requirements and the general operating and financial conditions of the Company as well as legal limitations on the payment of dividends out of paid-in capital.

 

(d)          No Assurance of a Public Trading Market and Risk of Low Priced Securities May Affect Market Value of the Company’s Stock.

 

The Securities and Exchange Commission (“SEC”) has adopted a number of rules to regulate “penny stocks.” Such rules include Rule 3a51-1 and Rules 15g-1 through 15g-9 under the Securities Exchange Act of 1934. Because the Company’s securities may constitute “penny stocks” within the meaning of the rules (as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, largely traded in the Over the Counter Bulletin Board or the Pink Sheets), the rules would apply to the Company and its common stock.

 

The SEC has adopted Rule 15g-9 which established sales practice requirements for certain low price securities. Unless the transaction is exempt, it shall be unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless prior to the transaction:

 

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·the broker or dealer has approved the person’s account for transactions in penny stock pursuant to this rule; and

 

·the broker or dealer has received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stock, the broker or dealer must:

 

·obtain from the person information concerning the person’s financial situation, investment experience, and investment objectives;

 

·reasonably determine that transactions in penny stock are suitable for that person, and that the person has sufficient knowledge and experience in financial matters that the person reasonably may be expected to be capable of evaluating the risks of transactions in penny stock;

 

·deliver to the person a written statement setting forth the basis on which the broker or dealer made the determination stating in a highlighted format that it is unlawful for the broker or dealer to affect a transaction in penny stock unless the broker or dealer has received, prior to the transaction, a written agreement to the transaction from the person, stating in a highlighted format immediately preceding the customer signature line that the broker or dealer is required to provide the person with the written statement, and the person should not sign and return the written statement to the broker or dealer if it does not accurately reflect the person’s financial situation, investment experience, and investment objectives; and

 

·receive from the person a manually signed and dated copy of the written statement.

 

It is also required that disclosure be made as to the risks of investing in penny stock and the commissions payable to the broker-dealer, as well as current price quotations and the remedies and rights available in cases of fraud in penny stock transactions. Statements, on a monthly basis, must be sent to the investor listing recent prices for the penny stock and information on the limited market.

 

There has been a very limited public market for the Company’s common stock. The Company intends to have a market maker file an application on the Company’s behalf with the Over the Counter Bulletin Board in order to make a market in the Company’s common stock. However, until this happens, if the market maker is successful with such application, and even thereafter, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the market value of the Company’s securities. The regulations governing penny stocks, as set forth above, sometimes limit the ability of broker-dealers to sell the Company’s common stock and thus, ultimately, the ability of the investors to sell their securities in the secondary market.

 

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Potential stockholders of the Company should also be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:

 

·control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

 

·manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

 

·“boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons;

 

·excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and

 

·the wholesale dumping of the same securities by promoters and broker dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses.

 

(e)          Failure To Remain Current In Reporting Requirements Could Result in the Company Being Delisting From The Over The Counter Bulletin Board.

 

Companies that trade on the Over the Counter Bulletin Board (such as the Company) must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the Bulletin Board. When the Company becomes listed on that market, if it fails to remain current in the Company’s reporting requirements, the Company could be delisted from the Over the Counter Bulletin Board.

 

In addition, the National Association of Securities Dealers, Inc., which operates the Bulletin Board, has adopted a change to its Eligibility Rule. The change makes those Over the Counter Bulletin Board issuers that are cited for filing delinquency in its Form 10-K’s/Form 10-Q’s three times in a 24-month period and those Bulletin Board issuers removed for failure to file such reports two times in a 24-month period ineligible for quotation on the Bulletin Board for a period of one year. Under this rule, a company filing with the extension time set forth in a Notice of Late Filing (Form 12b-25) is not considered late. This rule does not apply to a company’s Current Reports on Form 8-K (but failure to timely file a Form 8-K could have other ramifications for the Company).

 

As a result of these rules, the market liquidity for the Company’s common stock could be severely adversely affected by limiting the ability of broker-dealers to sell the Company’s securities and the ability of stockholders to sell their securities in the secondary market.

 

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(f)          Failure to Maintain Market Makers May Affect Value of the Company’s Stock.

 

If the Company is unable to maintain National Association of Securities Dealers, Inc. member broker/dealers as market makers, the liquidity of the common stock could be impaired, not only in the number of shares of common stock which could be bought and sold, but also through possible delays in the timing of transactions, and lower prices for the common stock than might otherwise prevail. Furthermore, the lack of market makers could result in persons being unable to buy or sell shares of the common stock on any secondary market. There can be no assurance the Company will be able to maintain such market makers.

 

(g)          Issuance of Common Stock in Exchange for Services or to Repay Debt Would Dilute Proportionate Ownership and Voting Rights, and Could Have a Negative Impact on the Market Price of the Company’s Stock.

 

The Company’s board of directors may issue shares of common stock to pay for debt or services, without further approval by its stockholders based upon such factors as the board of directors may deem relevant at that time.  It is likely that the Company will issue securities to pay for services and reduce debt in the future.  It is possible that the Company will issue additional shares of common stock under circumstances it may deem appropriate at the time.

 

(h)          If The Company is Unable to Raise Necessary Additional Capital as Needed, Its Business May Fail or its Operating Results and the Stock Price May Be Materially Adversely Affected.

 

To secure additional needed financing, the Company may need to borrow money or sell more securities, which may reduce the value of its outstanding common stock. Selling additional stock, either privately or publicly, would dilute the equity interests of the Company’s stockholders. In addition, if the Company raises additional funds by issuing equity securities, the holders of the new equity securities may have rights superior to those of the holders of shares of common stock, which could adversely affect the market price and the voting power of shares of its common stock.  If the Company raises additional funds by issuing debt securities, the holders of these debt securities may have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for the Company.

 

(i)          No Cumulative Voting May Affect Ability of Some Stockholders to Influence Mangement of Company.

 

Holders of the shares of common stock of the Company are not entitled to accumulate their votes for the election of directors or otherwise. Accordingly, the holders of a majority of the shares present at a meeting of stockholders will be able to elect all of the directors of the Company, and the minority stockholders will not be able to elect a representative to the Company’s board of directors.

 

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(j)          Shares Eligible For Future Sale Could Affect the Price of the Common Stock.

 

All of the shares currently held by management and the major stockholders have been issued in reliance on the private placement exemption under the Securities Act of 1933. Such shares will not be available for sale in the open market without separate registration except in reliance upon Rule 144 under the Securities Act of 1933. In general, under Rule 144 a person (or persons whose shares are aggregated) who has beneficially owned shares acquired in a non-public transaction for at least one year, including persons who may be deemed affiliates of the Company (as that term is defined under that rule) would be entitled to sell within any three-month period a number of shares that does not exceed 1% of the then outstanding shares of common stock, provided that certain current public information is then available. If a substantial number of the shares owned by these stockholders were sold pursuant to Rule 144 or a registered offering, the market price of the common stock at that time could be adversely affected.

 

ITEM 2. FINANCIAL INFORMATION.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following management’s discussion and analysis of financial condition and results of operations is based upon, and should be read in conjunction with, the Company’s unaudited and audited financial statements and related notes, and the audited and pro forma financial statements of the three companies acquired by the Company, presented in a separate section of this report following Item 15, which have been prepared in accordance with accounting principles generally accepted in the United States.

 

Overview.

 

On September 3, 2015, the Company completed an Acquisition Agreement under which the Company acquired all of the equity interests of Stimulating Software, the acquisition of all the common stock of Inner Four, Inc., and all of the common and preferred stock of Play Celebrity Games, Inc.

 

The acquisition of Inner Four, Stimulating Software and Play Celebrity leads to a business model that allows for the development of new rebranded games. Stimulating Software is a more free to play versus Inner Four which is a pay to play business model. Stimulating Software is a more free to play versus Inner Four which is a pay to play business model.

 

Play Celebrity brings agreements to create mobile games for artists, celebrities and athletes. Play Celebrity has an agreement with Top Fan to create exciting products for the fans of these celebrities.

 

The combined company will take the 500 existing games and begin the process of re skinning these games for artists and celebrities. The Company is geared to have Purple Penguin (owned by the previous owner of these 3 companies) perform the re-skinning.

 

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The business will incorporate many new strategies in attracting new users, retaining new users and expanding its core platform. Some of these strategies will include the use of licensed music, videos and other content. These strategies we believe allow us to distinguish our celebrity games from other games in the market place. The current marketplace does not have a lot of licensed music content application or a lot of licensed video content either. The Company also intends to work closely with new partners to develop a social network that underlies our platform. With so many games and with a large current monthly user base, the Company believes it can establish a core social network for the users to share in their game and fan experiences. The agreement between Play Celebrity and Top Fan allows for those types of social behaviors to occur.

 

Results of Operations.

 

Three Months Ended June 30, 2015 and 2014.

 

(a)          Total Revenue.

 

The Company had no revenue for the three months ended June 30, 2015 and June 30, 2014.

 

(b)          General and Administrative Expenses.

 

The Company had general and administrative expenses of $1,492 for the three months ended June 30, 2015 compared to $0 for the three months ended June 30, 2014. This increase in general and administrative expenses was mainly due to work in reviving the Company.

 

(c)         Consulting and Professional Fees.

 

The Company had $53,900 of consulting and professional fees for the three months ended June 30, 2015 compared to $0 for the three months ended June 30, 2014. This increase was mainly due to accounting and other work in preparing this registration statement and in reviving the Company.

 

(d)          Net Loss.

 

The Company had a net loss of $60,447 for the three months ended June 30, 2015 compared to no income or loss for the three months ended June 30, 2014. This increase was mainly due to work in reviving the Company.

 

Six Months Ended June 30, 2015 and 2014.

 

(a)          Total Revenue.

 

The Company had no revenue for the six months ended June 30, 2015 and March 31, 2014.

 

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(b)          General and Administrative Expenses.

 

The Company had general and administrative expenses of $9,629 for the six months ended June 30, 2015 compared to $3,225 for the six months ended June 30, 2014, an increase of $6,404 or approximately 200%. This increase in general and administrative expenses was mainly due to work in reviving the Company.

 

(c)          Consulting and Professional Fees.

 

The Company had $58,400 of consulting and professional fees for the six months ended June 30, 2015 compared to $0 for the six months ended June 30, 2014. This increase was mainly due to accounting and other work in preparing this registration statement and in reviving the Company.

 

(d)          Debt Write-Off.

 

The Company had a debt write-off of $3,100,290 during the six months ended June 30, 2014 based on the age of certain debt of the Company and the fact that based on opinion of counsel this aged debt could no longer be collected.

 

(e)          Net Loss.

 

The Company had a net loss of $73,862 for the six months ended June 30, 2015 compared to a net income of $3,097,065 for the six months ended June 30, 2014, a change of $3,170,927. This change was due to the debt write-off that occurred in 2014 and other factors noted above.

 

Years Ended December 31, 2014 and 2013.

 

(a)          Total Revenue.

 

The Company had no revenue for the years ended December 31, 2014 and 2013.

 

(b)          General and Administrative Expenses.

 

The Company had general and administrative expenses of $3,629 for the year ended December 31, 2014 compared to $7,308 for the year ended December 31, 2013, a decrease of $3,681 or approximately 50%. This decrease was mainly due to work decrease in activity by the Company from one year to the next.

 

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(c)          Debt Write-Off.

 

The Company had a debt write-off of $3,100,291 in 2014 based on the age of certain debt of the Company and the fact that based on opinion of counsel this aged debt could no longer be collected.

 

(d)          Net Loss.

 

The Company had net income of $3,096,662 for the year ended December 31, 2014 compared to a net loss of $7,308 for the year ended December 31, 2013. This change was due to the debt write-off that occurred in 2014 and other factors noted above.

 

Operating Activities.

 

The net cash used in operating activities was $25,000 for the six months ended June 30, 2015 compared to no cash provided by or used in operating activities for the six months ended June 30, 2014. This change is attributed to the net loss that occurred in 2014.

 

The net cash provided by operating activities was $0 for the years ended December 31, 2014 and 2013.

 

Liquidity and Capital Resources.

 

As of June 30, 2015, the Company had total current assets of $0 and total current liabilities of $249,738, resulting in a working capital deficit of $249,738.  The cash and cash equivalents was $0 as of June 30, 2015. 

 

As of December 31, 2014, the Company had total current assets of $0 and total current liabilities of $170,591, resulting in a working capital deficit of $170,591.  The cash and cash equivalents was $0 as of December 31, 2014. 

 

The net cash provided by financing activities from a loan (March 2015) was $25,000 for six months ended June 30, 2015 compared to $0 for the six months ended June 30, 2014.

 

On March 17, 2015, the Company entered into a promissory note with Peter Lambert for a loan of $25,000 that became due on June 15, 2015. The loan carries an interest at the rate of $55 per day. On June 12, 2015, the parties amended this promissory note so that the loan was extended and will accrue interest at $55 per day until this note is paid in full. As of June 30, 2015, there was $5,833 interest accrued on the loan.

 

The Company’s current cash and cash equivalents balance will not be sufficient to fund its operations for the next twelve months. The Company’s ability to continue as a going concern on a longer-term basis will be dependent upon its ability to generate sufficient cash flow from operations to meet its obligations on a timely basis, and to obtain additional financing, and ultimately attain profitability. The Company’s continued operations, as well as the implementation of the Company’s business plan will depend upon its ability to raise additional funds through bank borrowings and equity or debt financing.

 

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Whereas the Company has been successful in the past in raising capital, no assurance can be given that these sources of financing will continue to be available to it and/or that demand for the Company’s common stock will be sufficient to meet its capital needs, or that financing will be available on terms favorable to the Company. If funding is insufficient at any time in the future, the Company may not be able to take advantage of business opportunities or respond to competitive pressures, or may be required to reduce the scope of the Company’s planned product development and marketing efforts, any of which could have a negative impact on its business and operating results. In addition, insufficient funding may have a material adverse effect on the Company’s financial condition, which could require it to:

 

·curtail operations significantly;

 

·sell significant assets;

 

·seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights to products, technologies or markets; or

 

·explore other strategic alternatives including a merger or sale of the Company.

 

To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to the Company’s existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on the Company’s operations. Regardless of whether the Company’s cash assets prove to be inadequate to meet its operational needs, the Company may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to the Company’s existing stockholders.

 

Inflation.

 

The impact of inflation on the Company’s costs and the ability to pass on cost increases to its customers over time is dependent upon market conditions. The Company is not aware of any inflationary pressures that have had any significant impact on its operations over the past quarter and the Company does not anticipate that inflationary factors will have a significant impact on future operations.

 

Off-Balance Sheet Arrangements.

 

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

 

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Critical Accounting Policies.

 

The SEC has issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” (“FRR 60”), suggesting companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Company’s most critical accounting policies include: (a) use of estimates; and (b) net income (loss) per share. The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results the Company reports in its financial statements.

 

(a)          Use of Estimates.

 

The preparation of financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates these estimates, including those related to revenue recognition and concentration of credit risk. The Company bases its estimates on historical experience and on various other assumptions that is believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

(b)          Net Income (Loss) Per Share.

 

Net income (loss) per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

 

Forward Looking Statements.

 

This Form 10 registration statement contains “forward looking statements” within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended. The words “believe,” “expect,” “anticipate,” “intends,” “forecast,” “project,” and similar expressions identify forward-looking statements. These are statements that relate to future periods and include, but are not limited to, statements as to the Company’s estimates as to the adequacy of its capital resources, its need and ability to obtain additional financing, and its critical accounting policies.

 

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Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

ITEM 3. PROPERTIES.

 

The Company owns general office equipment valued at approximately $5,700. The Company acquired substantial assets as a result of the Acquisition Agreement, as set forth in Schedule 4.10 to this Agreement.

 

The Company currently maintains an office at 1950 Fifth Avenue, Suite 100, San Diego, California 92101. The Company does not pay any monthly rent at this time for use of an office at this address, which is provided by an attorney for the Company. These offices are currently adequate for the needs of the Company.

 

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

 

Common Stock.

 

The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock as of September 30, 2015 (44,367,709 (1) issued and outstanding) by (i) all stockholders known to the Company to be beneficial owners of more than 5% of the outstanding common stock; and (ii) all of the current directors and executive officers of the Company as a group:

 

 

Title of Class

  Name and Address of
Beneficial Owner
  Amount of Beneficial
Ownership (2)
  

 

Percent of Class

 
Common Stock  John Acunto, 1950 Fifth Ave., Suite 100, San Diego, CA 92101   15,897,405(3)   35.83%
Common Stock  Anand Gokel, 3754 Benton St., Santa Clara, CA 95051   3,500,000    7.89%
Common Stock  John Swartz, 154 Gull Aire Blvd., Oldsmar, FL 34677   3,307,420    7.45%
Common Stock  Lorraine Handel, 154 Gull Aire Blvd., Oldsmar, FL 34677   3,307,420(4)   7.45%
Common Stock  Anne Morrison, 1304 Crann Ave., Chula Vista, CA 91911   3,157,420    7.12%
Common Stock  Anna Acunto, 5531 Piper Glen Dr., Charlotte, NC 28277   2,800,000(5)   6.31%
Common Stock  John Fleming, 1950 Fifth Ave., Suite 100, San Diego, CA 92101   26,589    0.06%
Common  Stock  Shares of all directors and executive officers as a group (1 person)   26,589    0.06%

 

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(1)          This amount, post 3,000 to 1 reverse split effective on April 27, 2015, includes shares issued for purposes of rounding.

 

(2)           Each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by them. Except as set forth below, none of these individuals holds any convertible securities.

 

(3)          These shares are held in the name of Chasin, LLC, a Delaware limited liability company (4,300,000 shares), Team AJ, LLC, a North Carolina limited liability company (4,300,000 shares), AF Trust Company, a Florida corporation (4,100,000 shares), and Kaptiva Group, LLC, a Florida limited liability company (3,197,405 shares). John Acunto controls the voting power and investment power of the shares owned by each of these companies.

 

(4)          Lorraine Handel is the mother-in-law of John Swartz. Mr. Swartz disclaims any ownership in her shares.          

 

(5)          Anna Acunto is the wife of John Acunto. Mr. Acunto disclaims any ownership in these shares.

 

Neither the officers and directors of the Company, nor any company they directly or indirectly control, has entered into any arrangements, agreements (including derivative agreements), or contracts that give or will give anyone else an interest in the Company. The director/officer has not used shares of this Company to secure a loan.

 

Series A Convertible Preferred Stock.

 

The following table sets forth information regarding the beneficial ownership of shares of the Company’s Series A convertible preferred stock as of September 30, 2015 (4,725 (1) issued and outstanding) by (i) all stockholders known to the Company to be beneficial owners of more than 5% of the outstanding convertible preferred stock; and (ii) all of the current directors and executive officers of the Company as a group:

 

 

Title of Class 

  Name and Address of
Beneficial Owner
  Amount of Beneficial
Ownership (2)
  

 

Percent of Class

 
Series A Convertible Preferred Stock  John Swartz, 154 Gull Aire Blvd., Oldsmar, FL 34677   2,575    54.50%
Series A Convertible Preferred Stock  John Acunto, 1950 Fifth Ave., Suite 100, San Diego, CA 92101   870(3)   18.41%
Series A Convertible Preferred Stock  Anand Gokel, 3754 Benton St., Santa Clara, CA 95051   600    12.70%
Series A Convertible Preferred Stock  Brian F. Faulkner, Esq., 27127 Calle Arroyo, Suite 1923, San Juan Capistrano, CA 92675   250    5.29%
Series A Convertible Preferred Stock  John Fleming, 1950 Fifth Ave., Suite 100, San Diego, CA 92101   400    8.47%
Series A Convertible Preferred Stock  Shares of all directors and executive officers as a group (1 person)   400    8.47%

 

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(1)          The Company filed an Amended Certificate of Designation on September 10, 2015. Under this document the Company is permitted to issue up to 10,000 shares of Series A Convertible Preferred Stock. Each share of convertible preferred stock is convertible, at the option of the holder, at any time into the number of fully paid and nonassessable shares of Company common stock as determined by dividing 1,000 by the amount that is a 10% discount to the average of the closing price per share of the Company’s common stock on the exchange on which this common stock is traded over the 10 trading day period ending immediately prior to the conversion date. Each share of convertible preferred stock has the right to vote on all matters on which holders of common stock of the Company may vote, and for each share of convertible preferred stock held the holder shall be treated as holding 20 shares of Company common stock.

 

(2)           Each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by them. None of these individuals holds any other convertible securities.

 

(3)          These shares are held in the name of Team AJ, LLC. Mr. Acunto, the managing member, controls the voting power and investment power of these shares.

 

Neither the officers and directors of the Company, nor any company they directly or indirectly control, has entered into any arrangements, agreements (including derivative agreements), or contracts that give or will give anyone else an interest in the Company. The director/officer has not used shares of this Company to secure a loan.

 

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.

 

Directors and Executive Officers.

 

The name, age, and position of the director/executive officer of the Company are set forth below. The director named below will serve until the next annual meeting of stockholders or until their successors are duly elected and have qualified. Directors are elected for a term until the next annual stockholders’ meeting. Officers will hold their positions at the will of the board of directors, absent any employment agreement, of which none currently exist or are contemplated.

 

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There is no arrangement or understanding between the director/executive officer and any other person pursuant to which the director/officer was or is to be selected as a director/officer, and there is no arrangement, plan or understanding as to whether non-management stockholders will exercise their voting rights to continue to elect the current board of directors. There are also no arrangements, agreements or understandings between non-management stockholders that may directly or indirectly participate in or influence the management of the Company’s affairs. There are no other promoters or control persons of the Company. There are no legal proceedings involving the director/officer of the Company.

 

On August 15, 2014, Glenn W. McMachen, Sr., the Company’s sole board member, and chief executive officer, president, and secretary/treasurer of the Company, appointed John Fleming as a new member of the Company’s board of directors. Mr. McMachen then resigned from all positions with the Company. Mr. Fleming was then appointed as the Company’s chief executive officer, president, and secretary/treasurer.

 

John J. Fleming, President/ Chief Executive Officer/Secretary/Treasurer/Director.

 

Mr. Fleming, age 66, was the managing partner of AFI Capital, LLC, a venture capital company, located in San Diego, California for the 5 years before joining the Company in September 2002. Mr. Fleming served as the Company’s chief executive officer and president from 2002 until he resigned on March 24, 2010 (the date of execution of the Agreement noted in Item 1.02 above. Before AFI Capital, Mr. Fleming managed Fleming & Associates, a business-consulting firm that provided services to companies looking to create business plans and/or review current plans in order to move forward with fund raising from both private and public sectors. From March 2010 to August 2014, Mr. Fleming has acted as a business consultant.

 

Audit Committee.

          

The Company’s board of directors functions as audit committee for the Company.

 

The primary responsibility of the Audit Committee will be to oversee the financial reporting process on behalf of the Company’s board of directors and report the result of their activities to the board. Such responsibilities include, but are not limited to, the selection, and if necessary the replacement, of the Company’s independent registered public accounting firm, review and discuss with such independent registered public accounting firm: (i) the overall scope and plans for the audit, (ii) the adequacy and effectiveness of the accounting and financial controls, including the Company’s system to monitor and manage business risks, and legal and ethical programs, and (iii) the results of the annual audit, including the financial statements to be included in the annual report on Form 10-K.

 

The Company’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The audit committee may also pre-approve particular services on a case-by-case basis.

 

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Significant Employee.

 

Chad Antonson, Chief Technology Officer.

 

Mr. Antonson, age 31, started his career as an intern at a small app development company, Inner Four, Inc. in September 2009. In January 2010, he became the lead developer and manager of an app start-up, PurplePenguin.com, with just a handful of developers. Using the latest cross-platform technologies and marketing strategies, the company became profitable by mid 2010, enabling him to hire a larger team of developers and artists. Mr. Antonson currently has 6 years of experience developing mobile apps, has managed the development of over 500 apps and has, himself, developed entertainment apps for iTunes. He also has many years of experience on back-end and web development using the latest cloud technologies and frameworks.

 

Other Committee of the Board of Directors.

 

The Company presently does not have a compensation committee, nominating committee, an executive committee of the board of directors, stock plan committee or any other committees.

 

Recommendation of Nominees.

 

The Company does not have a standing nominating committee or committee performing similar functions. Because of the small size of the Company, the board of directors believes that it is appropriate for the Company not to have such a committee. All the directors participate in the consideration of director nominees.

 

The board of directors does not have a policy with regard to the consideration of any director candidates recommended by security holders. Because of the small size of the Company, and the limited number of stockholders, the board of directors believes that it is appropriate for the Company not to have such a policy.

 

When evaluating director nominees, The Company considered the following factors:

 

·The appropriate size of the board.

 

·The Company’s needs with respect to the particular talents and experience of company directors.

 

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·Knowledge, skills and experience of prospective nominees, including experience in finance, administration.

 

·Experience with accounting rules and practices.

 

·The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new board members.

 

The Company’s goal is to assemble a board that brings together a variety of perspectives and skills derived from high quality business and professional experience.  

 

ITEM 6. EXECUTIVE COMPENSATION.

 

(a)           The current officer and director has not received any form of compensation during the last completed fiscal year ended December 31, 2014. The prior officer/director of the Company, Glenn McMachen, did not receive any form of compensation during the last two completed fiscal years.

 

(b)          There is no plan that provides for the payment of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.

 

(c)          There is currently no contract, agreement, or arrangement, whether written or unwritten, that provides for payment(s) to a named executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of the Company or a change in the named executive officer's responsibilities following a change in control, with respect to each named executive officer, except as follows:

 

Starting January, 1 2015 Mr. Fleming is accruing a consulting fee of $1,500 a month until the Company puts a formal contract in place. As of June 30, 2015, the Company paid Mr. Fleming $3,666 of this consulting fee and there is a balance of $5,333 in accounts payable.

 

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the Company’s last two fiscal years, and the subsequent interim period, there has been no transaction, or any currently proposed transaction, in which the Company was or is to be a participant, and in which any related person had or will have a direct or indirect interest.

 

Starting January, 1 2015 Mr. Fleming is accruing a consulting fee of $1,500 a month until the Company puts a formal contract in place. As of June 30, 2015, the Company paid Mr. Fleming $3,666 of this consulting fee and there is a balance of $5,333 in accounts payable. There is no written agreement for this consulting fee.

 

 27 

 

 

On March 31, 2015, Mr. Fleming transferred $5,743 of various office equipment and supplies to the Company.  The Company is carrying the balance due to Mr. Fleming under short-term liabilities and will reimburse Mr. Fleming during the current fiscal year. Mr. Fleming has a balance of $6,950 owed to him under “due to officers” for the transfer of assets and various out of pocket expenses.

 

On September 14, 2015, the Company issued 15,897,405 restricted shares of common stock to John Acunto in connection with the Acquisition Agreement dated September 3, 2015 (see Exhibit 2.3). In connection with this agreement, this Company on that date issued Series A convertible preferred stock as shown in the chart under Item 4 above.

 

On September 14, 2015, the Company issued restricted shares of common stock to the following individuals for consulting work done, and to be done, for the Company (as shown in the chart under Item 4 above): Anand Gokel (3,500,000 shares); John Swartz (3,307,420 shares); Lorraine Handel (3,307.420 shares); Anne Morrison (3,157,420 shares); and Anna Acunto (2,800,000). The Company anticipates having consulting agreements in place with these individuals by December 31, 2015.

 

The Company has not had a promoter at any time during the past five fiscal years.

 

The Company defines director independence in accordance with the definition as set forth in Rule 5605(a)(2) of the Rules of the NASDAQ Stock Market.

 

ITEM 8. LEGAL PROCEEDINGS.

 

There are no known legal or other proceedings against the Company that could at the time of submitting this registration statement that could have a materially adverse effect on the Company’s financial position or operations.

 

ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

 

Market Information.

 

The Company’s common stock trades on the OTC Markets Group under the symbol “TGLN”. The range of closing prices shown below is as reported by the OTC Markets Group. The quotations shown reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

 

 28 

 

 

Per Share Common Stock Bid Prices by Quarter

For the Fiscal Year Ending on December 31, 2015

 

   High   Low 
         
Quarter Ended September 30, 2015  $0.35   $0.055 
Quarter Ended June 30, 2015 (1)  $0.99   $0.06 
Quarter Ended March 31, 2015  $0.0001   $0.0001 

 

(1) A 3,000 to 1 reverse split of the Company’s common stock was effective on April 27, 2015.

 

Per Share Common Stock Bid Prices by Quarter

For the Fiscal Year Ended on December 31, 2014

 

   High   Low 
         
Quarter Ended December 31, 2014  $0.0001   $0.0001 
Quarter September 30, 2014  $0.0001   $0.0001 
Quarter Ended June 30, 2014  $0.0001   $0.0001 
Quarter Ended March 31, 2014  $0.0001   $0.0001 

 

Per Share Common Stock Bid Prices by Quarter

For the Fiscal Year Ended on December 31, 2013

 

   High   Low 
         
Quarter Ended December 31, 2013  $0.0001   $0.0001 
Quarter Ended September 30, 2013  $0.0001   $0.0001 
Quarter Ended June 30, 2013  $0.0001   $0.0001 
Quarter Ended March 31, 2013  $0.0001   $0.0001 

 

Reverse Split.

 

On April 27, 2015, there was a 3,000 to 1 reverse split of the Company’s common stock. After this reverse split, the total number of outstanding shares of common stock of the Company as of June 30, 2015 was 1,012,029 (includes shares issued for purposes of rounding); immediately after the reverse split, the number of issued and outstanding shares was 1,004,517.

 

Holders of Common Equity.          

 

As of September 30, 2015, the Company had 414 stockholders of record of its common stock. The number of record holders was determined from the records of the Company’s transfer agent.  The number of record holders excludes any estimate of the number of beneficial owners of common shares held in street name.

 

Dividends.

 

The Company has not declared or paid a cash dividend to stockholders since it was organized. The Board of Directors presently intends to retain any earnings to finance the Company’s operations and does not expect to authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon the Company’s earnings, capital requirements and other factors.

 

 29 

 

 

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.

 

During the past three years, there have been the following sales of securities of the Company:

 

On September 15, 2015, the Company issued a total of 43,355,680 restricted shares of common stock in connection with the completion of the acquisition of the equity interests of Stimulating Software, LLC, the acquisition of all the common stock of Inner Four, Inc., and all of the common and preferred stock of Play Celebrity Games, Inc. On that date the Company also issued 4,725 shares of Series A convertible preferred stock in connection with that acquisition. All these shares were issued

 

          With respect to these sales of unregistered securities, the Company relied on the exemptive provisions of Rule 506 of Regulation D under the Securities Act of 1933, as amended. At all times relevant the securities were offered subject to the following terms and conditions:

 

·the sales were made exclusively to sophisticated or accredited investors, as defined in Rule 502;

 

·the purchasers were given the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which the Company possessed or could acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished;

 

·at a reasonable time prior to the sale of securities, the purchaser were advised of the limitations on resale in the manner contained in Rule 502(d)2;

 

·neither the company nor any person acting on its behalf sold the securities by any form of general solicitation or general advertising; and

 

·all sales under this offering were made through John Fleming, President and director of the Company.

 

No commissions were paid in connection with any of these sales. All share certificates bear a legend restricting their disposition.

 

Other than these sales, there have been no other sales of securities of the Company during the past three years.

 

 30 

 

 

ITEM 11. DESCRIPTION OF SECURITIES TO BE REGISTERED.

 

Common Stock.

 

The authorized capital stock of the Company consists of 5,000,000,000 shares of common stock, par value $0.001. The holders of the common stock:

 

(a) have equal ratable rights to dividends from funds legally available therefore, when, as, and if declared by the Board of Directors of the Company;

 

(b) are entitled to share ratably in all of the assets of the Company available for distribution upon winding up of the affairs of the Company; and

 

(c) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote at all meetings of stockholders.

 

These securities do not have any of the following rights:

 

(a) cumulative or special voting rights;

 

(b)preemptive rights to purchase in new issues of shares;

 

(c) preference as to dividends or interest;

 

(d) preference upon liquidation; or

 

(e) any other special rights or preferences. In addition, the Shares are not convertible into any other security.

 

There are no restrictions on dividends under any loan or other financing arrangements or otherwise.

 

The Company’s authorized but unissued common stock currently consists of 4,955,632,291 shares. One effect of the existence of authorized but unissued capital stock may be to enable the Board of Directors to render more difficult or to discourage an attempt to obtain control of the Company by means of a merger, tender offer, proxy contest, or otherwise, and thereby to protect the continuity of the Company’s management. If, in the due exercise of its fiduciary obligations, for example, the Board of Directors were to determine that a takeover proposal was not in the Company’s best interests, such shares could be issued by the Board of Directors without stockholder approval in one or more private placements or other transactions that might prevent, or render more difficult or costly, completion of the takeover transaction by diluting the voting or other rights of the proposed acquiror or insurgent stockholder or stockholder group, by creating a substantial voting block in institutional or other hands that might undertake to support the position of the incumbent Board of Directors, by effecting an acquisition that might complicate or preclude the takeover, or otherwise.

 

 31 

 

 

Series B Common Stock.

 

The Company has 100,000,000 shares of Series B common stock authorized; none is issued and outstanding

 

Preferred Stock.

 

The Company has 10,000,000 shares of preferred stock authorized. Under an Amended Certificate of Designation filed with the Nevada Secretary of State on September 10, 2015, the Company designated 10,000 shares of undesignated and unissued preferred stock as “Series A Convertible Preferred Stock”, par value $0.001. As of September 30, 2015, 4,725 of these shares were issued and are now outstanding.

 

Each share of convertible preferred stock is convertible, at the option of the holder, at any time into the number of fully paid and nonassessable shares of Company common stock as determined by dividing 1,000 by the amount that is a 10% discount to the average of the closing price per share of the Company’s common stock on the exchange on which this common stock is traded over the 10 trading day period ending immediately prior to the conversion date. Each share of convertible preferred stock has the right to vote on all matters on which holders of common stock of the Company may vote, and for each share of convertible preferred stock held the holder shall be treated as holding 20 shares of Company common stock.

 

Each holder of Series A Convertible Preferred Stock may not convert any outstanding Series A Convertible Preferred Stock if at the time of such conversion the amount of Common Stock to be issued for the conversion, when added to other shares of common stock owned by the holder of Series A Convertible Preferred Stock, or which can be acquired by the holder upon exercise or conversion of any other instrument, would cause that holder to own more than 4.9% of the Company’s issued and outstanding common stock.

 

The Company shall pay a yearly dividend, in cash or Common Stock (with the determination to pay in cash or common stock, or a combination of the two, to be made by the Company at its discretion), equal to 4% of the Valuation Price (as defined) of each share of Series A Convertible Preferred Stock, payable quarterly within 30 days after the end of each calendar quarter, and such dividend shall be paid prior to the payment of any dividends on the Company’s common stock. In the event the Company elects to pay a portion or all of the dividends on the Series A Convertible Preferred Stock by issuing shares of common stock, these shares issued as dividends shall be restricted, unregistered shares, and will be subject to the same transfer restrictions that apply to the shares of Series A Convertible Preferred Stock.

 

Non-Cumulative Voting.

 

The holders of shares of common stock of the Company will not have cumulative voting rights, which means that the holders of more than 50% of such outstanding Shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose. In such event, the holders of the remaining Shares will not be able to elect any of the Company’s directors.

 

 32 

 

 

Dividends.

 

The Company does not currently intend to pay cash dividends. Because the Company does not intend to make cash distributions, potential stockholders would need to sell their shares to realize a return on their investment. There can be no assurances of the projected values of the shares, or can there be any guarantees of the success of the Company.

A distribution of revenues will be made only when, in the judgment of the Company’s board of directors, it is in the best interest of the Company’s stockholders to do so. The board of directors will review, among other things, the financial status of the Company and any future cash needs of the Company in making its decision.

 

Transfer Agent.

 

The Company has engaged the services of Interwest Transfer Company, Inc., 1981 Murray Holladay Road, Suite 100, Salt Lake City, Utah 84117,to act as transfer agent and registrar for the Company.          

 

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

 

The following is a summary of the relevant provisions in the articles of incorporation, bylaws, and Nevada law with regard to limitation of liability and indemnification of officers, directors and employees of the Company.

 

Limitation of Liability.

 

Articles of Incorporation and Bylaws.

 

There are no provisions in the Company’s articles of incorporation or bylaws with regard to liability of a director

 

Nevada Revised Statutes.

 

“NRS 78.138 Directors and officers: Exercise of powers; performance of duties; presumptions and considerations; liability to corporation and stockholders.

     

(7)          Except as otherwise provided in NRS 35.230, a director or officer is not individually liable to the corporation or its stockholders for any damages as a result of any act or failure to act in his capacity as a director or officer unless it is proven that:

 

(a)           His act or failure to act constituted a breach of his fiduciary duties as a director or officer; and

 

(b)           His breach of those duties involved intentional misconduct, fraud or a knowing violation of law.”

 

 33 

 

 

Indemnification.

 

Articles of Incorporation and Bylaws.

 

There are no provisions in the articles of incorporation with regard to indemnification. The bylaws of the Company provide the following with regard to indemnification:

 

“No director shall be liable to the corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except with respect to (1) a breach of the director’s duty of loyalty to the corporation or its stockholders, (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) liability which may be specifically defined by law or (4) a transaction from which the director derived an improper personal benefit, it being the intention of the foregoing provision to eliminate the liability of the corporation’s directors to the corporation or its stockholders to the fullest extent permitted by law. The corporation shall indemnify to the fullest extent permitted by law each person that such law grants the corporation the power to indemnify.”

 

Nevada Revised Statutes.

 

“NRS 78.7502 Discretionary and mandatory indemnification of officers, directors, employees and agents: General provisions.

     

1.  A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he:

 

(a) Is not liable pursuant to directors and officers duty to exercise their powers in good faith and with a view to the interests of the corporation]; or

 

(b) Acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

 

The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person is liable pursuant to or did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, or that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

 

 34 

 

 

2.  A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he:

                

(a) Is not liable pursuant to; or

 

(b) Acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the corporation.

 

Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

3.  To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1 and 2, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.”

 

“NRS 78.751 Authorization required for discretionary indemnification; advancement of expenses; limitation on indemnification and advancement of expenses.

 

1.          Any discretionary indemnification pursuant to NRS 78.7502, unless ordered by a court or advanced pursuant to subsection 2, may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:

 

(a)          By the stockholders;

 

(b)          By the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding;

 

(c)          If a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or

 

 35 

 

 

(d)          If a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

 

2.          The articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.

 

3.           The indemnification pursuant to NRS 78.7502 and advancement of expenses authorized in or ordered by a court pursuant to this section:

 

(a)          Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in the person’s official capacity or an action in another capacity while holding office, except that indemnification, unless ordered by a court pursuant to NRS 78.7502 or for the advancement of expenses made pursuant to subsection 2, may not be made to or on behalf of any director or officer if a final adjudication establishes that the director’s or officer’s acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action. A right to indemnification or to advancement of expenses arising under a provision of the articles of incorporation or any bylaw is not eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.

 

(b)          Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.”

 

“NRS 78.752 Insurance and other financial arrangements against liability of directors, officers, employees and agents.

 

(1)          A corporation may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expenses.

 

 36 

 

 

(2)           The other financial arrangements made by the corporation pursuant to subsection 1 may include the following:

 

(a)           The creation of a trust fund.

 

(b)           The establishment of a program of self-insurance.

 

(c)           The securing of its obligation of indemnification by granting a security interest or other lien on any assets of the corporation.

 

(d)           The establishment of a letter of credit, guaranty or surety.

 

No financial arrangement made pursuant to this subsection may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement of expenses or indemnification ordered by a court.

 

(3)          Any insurance or other financial arrangement made on behalf of a person pursuant to this section may be provided by the corporation or any other person approved by the board of directors, even if all or part of the other person’s stock or other securities is owned by the corporation.

 

(4)          In the absence of fraud:

 

(a)          The decision of the board of directors as to the propriety of the terms and conditions of any insurance or other financial arrangement made pursuant to this section and the choice of the person to provide the insurance or other financial arrangement is conclusive; and

 

(b)          The insurance or other financial arrangement:

          

(i)           Is not void or voidable; and

 

(ii)           Does not subject any director approving it to personal liability for his action, even if a director approving the insurance or other financial arrangement is a beneficiary of the insurance or other financial arrangement.

 

(5)          A corporation or its subsidiary which provides self-insurance for itself or for another affiliated corporation pursuant to this section is not subject to the provisions of Title 57 of NRS.”

 

 37 

 

 

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

(a) All financial statements of the Company as required by Article 8 of Regulation S-X are set forth in this document after Item 15.

 

(b) The Company has determined that the acquisition of all the equity interests of Stimulating Software, LLC, and, as well as the acquisition of all the common stock of Inner Four, Inc., and all the common and preferred stock of Play Celebrity Games, Inc., must comply with Rule 8-04 of Regulation S-X, and therefore audited financial statements will included in the Form 10 after the financial statements of the Company.

 

(c) Pro forma financial information in connection with these acquisitions pursuant to Rule 8-05 of Regulation S-X is also included in this Form 10 after the financial statements of the Company.

 

ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

 

On May 13, 2015 the Company retained Anton & Chia, LLP as the Company’s independent registered public accounting firm. The decision to engage this firm was recommended and approved by the Company’s Board of Directors. Anton & Chia was retained to audit the Company’s financial statements for the fiscal years ended December 31, 2014 and 2013.  During fiscal years 2013, 2014, and the subsequent interim period, neither the Company nor anyone on the Company’s behalf engaged Anton & Chia regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, or any matter that was either the subject of a “disagreement” or a “reportable event,” both as such terms are defined in Item 304 of Regulation S-K.

 

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.

 

The following documents are being filed as a part of this registration statement on Form 10:

 

(a)           Audited financial statements of the Company as of and for the years ended December 31, 2014 and 2013;

 

(b)          Unaudited financial statements of the Company as of and for the periods ended June 30, 2015 and 2014;

 

(c)          Audited financial statements of Inner Four, Inc. as of and for the years ended December 31, 2013 and 2014.

 

(d)          Unaudited financial statements of Inner Four, Inc. as of and for the six months ended June 30, 2015 and 2014.

 

 38 

 

 

(e)          Audited financial statements of Stimulating Software, LLC as of December 31, 2014 and for the period of November 5, 2014 (inception) to December 31, 2014.

 

(f)          Unaudited financial statements of Stimulating Software, LLC as of June 30, 2015 and for the six months ended June 30, 2015.

 

(g)          Audited financial statements of Play Celebrity Games, Inc. as of June 30, 2015 and for the period from June 5, 2015 (inception) to June 30, 2015.

 

(h)          Unaudited condensed combined pro forma financial statements.

 

(i)           Those exhibits required by Item 601 of Regulation S-K (included or incorporated by reference in this document are set forth in the Exhibit Index).

 

 39 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

BALANCE SHEETS

 

   June 30, 2015
(Unaudited)
   December 31,
2014
 
         
ASSETS        
Current assets:          
Cash  $   $ 
Total current assets        
Other assets:          
Furniture and equipment   5,285     
Total other assets   5,285     
Total assets  $5,285   $ 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Short-term liabilities:          
Accounts payable  $211,955   $170,187 
Due to officers   6,950    404 
Loans payable   25,000     
Accrued interest   5,833      
Total short-term liabilities   249,738    170,591 
           
Total liabilities   249,738    170,591 
           
Stockholders’ deficit:          
Common stock; $0.001 par value; 5,000,000,000 shares  authorized, 1,012,029 and 1,004,517 shares issued and  outstanding as of June 30, 2015 and December 31, 2014 (1)   1,012    1,005 
Series B common stock; $0.001 par value; 100,000,000  shares authorized, no shares issued and outstanding  as of June 30, 2015 and December 31, 2014        
Preferred stock; $0.001 par value; 10,000,000 shares  authorized, no shares issued and outstanding  as of June 30, 2015 and December 31, 2014        
Additional paid-in capital   74,203,323    74,203,330 
Accumulated deficit   (74,448,788)   (74,374,926)
Total stockholders’ deficit   (244,453)   (170,591)
Total liabilities and stockholders’ deficit  $5,285   $ 

 

(1) The number of issued and outstanding shares of common stock reflects the amount immediately after a 3,000 to 1 reverse split of the Company’s common stock that was effective on April 27, 2015 (1,004,517) plus additional shares issued for purposes of rounding during the three months ended June 30, 2015.

 

The accompanying notes are an integral part of these unaudited financial statements

 

 40 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months
Ended
   Three Months
Ended
   Six Months
Ended
   Six Months
Ended
 
   June 30,   June 30,   June 30,   June 30, 
   2015   2014   2015   2014 
                 
Revenues:                    
Gross sales  $   $   $   $ 
                     
Net sales                
                     
Costs and expenses:                    
Consulting fees   6,900        11,400     
Professional fees   47,000        47,000     
General and administrative   1,492        9,629    3,225 
                     
Total costs and expenses   55,392        68,029    3,225 
                     
Loss from operations   (55,392)       (68,029)   (3,225)
                     
Other income (expenses):                    
Interest expense   (5,055)       (5,833)    
Debt write-off               3,100,290 
                     
Total other income (expenses)   (5,055)       (5,833)   3,100,290 

 

 41 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

STATEMENTS OF OPERATIONS

(Unaudited)

(continued)

 

   Three Months
Ended
   Three Months
Ended
   Six Months
Ended
   Six Months
Ended
 
   June 30,   June 30,   June 30,   June 30, 
   2015   2014   2015   2014 
                 
Net income (loss)  $(60,447)  $   $(73,862)  $3,097,065 
                     
Basic earnings (loss) per share  $(0.06)  $   $(0.07)  $3.08 
                     
Weighted average number of common shares outstanding (1)   1,009,122    1,004,517    1,006,833    1,004,517 
                     
Diluted earnings (loss) per share  $(0.06)  $   $   $3.08 
                     
Weighted average number of common shares outstanding (1)   1,009,122    1,004,517    1,006,833    1,004,517 

 

(1) The number of shares of common stock reflects the amount immediately after a 3,000 to 1 reverse split of the Company’s common stock that was effective on April 27, 2015 plus additional shares issued for purposes of rounding during the three months ended June 30, 2015.

 

The accompanying notes are an integral part of these unaudited financial statements

 

 42 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six Months
Ended
   Six Months
Ended
 
   June 30, 2015   June 30, 2014 
         
Cash flows from operating activities:          
Net income (loss)  $(73,862)  $3,097,065 
Adjustments to reconcile the net loss to net cash:          
Depreciation expense   458     
Change in current assets and liabilities:          
Accrued interest expense   5,833     
Change in due to officers   803     
Change in accounts payable   41,768    (3,097,065)
           
Net cash used in operating activities   (25,000)    
           
Cash flows from financing activities:          
Proceeds from loans payable   25,000     
           
Net cash provided by financing activities   25,000     
           
Net increase (decrease) in cash        
           
Cash at beginning of period        
           
Cash at end of period  $   $ 
           
Supplemental disclosures of cash flow:          
Non-cash activities:          
Purchase of fixed assets and supplies from related party  $5,743   $ 
           
Total non-cash activities  $5,743   $ 
           
Interest paid  $   $ 
           
Taxes paid  $   $ 

 

The accompanying notes are an integral part of these unaudited financial statements

 

 43 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 – NATURE OF BUSINESS

 

The accompanying unaudited financial statements of InCapta, Inc. (formerly known as TBC Global News Network, Inc.), a Nevada corporation (“Company”), have been prepared in accordance with Securities and Exchange Commission (“SEC”) requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2014.

 

The financial statements include the accounts of the Company. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All common stock share numbers reflect a 1,000 to 1 reverse split of the Company’s common stock effective on September 6, 2007, a 10,000 to 1 reverse split of the Company’s common stock effective on April 9, 2009, and a 3,000 to 1 reverse split of the Company’s common stock effective on April 27, 2015.

 

The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of June 30, 2015, and the results of operations and cash flows for the six months then ended. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.

 

In November 2008, the Company halted its previous operations of providing online movie rentals (also referred to as a “DVD”) and video game rentals to subscribers through its Internet website, gameznflix.com.

 

On May 7, 2009, the Company filed a Certificate of Amendment to Articles of Incorporation with the Nevada Secretary of State. This amendment changed the name of the Company to TBC Global News Network, Inc. This corporate action had previously been approved by consent of a majority of the outstanding shares of common stock of the Company. As of July 30, 2009, the new trading symbol for the Company is “TGLN.”

 

During the first quarter of 2010, the Company ceased its prior operations of producing video news, business profiles, and television advertisements.

 

On March 19, 2010, the Company entered into a Purchase and Sale Agreement with Sterling Yacht Sales, Inc., and it stockholders, Glenn W. McMachen, Sr., and Arlene McMachen. However, since the buyers breached this agreement the transaction was rescinded, and therefore no consolidation is required.

 

 44 

 

 

From August 2010 until August 2014, the Company did not operate. Upon assuming the positions as a director and officer of the Company in August 2014, Mr. Fleming commenced operations of the Company as a consultant and also seeking opportunities for the Company.

 

On August 15, 2014, Mr. McMachen, the Company’s sole board member, and chief executive officer, president, and secretary/treasurer of the Company, appointed John Fleming as a new member of the Company’s board of directors. Mr. McMachen then resigned from all positions with the Company. Mr. Fleming was then appointed as the Company’s executive officer, president, and secretary/treasurer. Mr. Fleming will serve in these positions until the next annual meeting of stockholders or until their successors are duly elected and have qualified.

 

Effective on October 21, 2015, the Company filed a Certificate of Amendment with the Nevada Secretary of State to change its name from “TBC Global News Network, Inc.” to “InCapta, Inc.”

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

 

Use of Estimates.

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

 

Cash and Cash Equivalents.

 

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of June 30, 2015.

 

 45 

 

 

Income Taxes.

 

The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

 

At June 30, 2015, the Company has net operating loss carry-forwards totaling $74,448,788. The carry-forwards begin to expire in fiscal year 2034. The Company has established a valuation allowance for the full tax benefit of the operating loss carry-forwards due to the uncertainty regarding realization. Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of any of the Company's net operation loss and credit carry forwards may be limited if cumulative changes in ownership of more than 50% occur during any three year period.

 

Impairment of Long-Lived Assets.

 

In accordance with Accounting Standards Codification (“ASC”) Topic 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” long-lived assets such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

 

Net Income (Loss) Per Share.

 

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of outstanding shares of common stock during the period. Diluted net income (loss) per share is computed by dividing the weighted-average number of outstanding shares of common stock, including any potential common shares outstanding during the period, when the potential shares are dilutive. Potential common shares consist primarily of incremental shares issuable upon the assumed exercise of stock options and warrants to purchase common stock using the treasury stock method. The calculation of diluted net income (loss) per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive, as they were during 2015 and 2014. During June 30, 2015 and 2014, the number of potential common shares excluded from diluted weighted-average number of outstanding shares was 0 and 0, respectively.

 

 46 

 

 

Stock-Based Compensation.

 

Options granted to consultants, independent representatives and other non-employees are accounted for using the fair value method as prescribed by ASC Topic 718, “Share-Based Payment.”

 

Recent Pronouncements.

 

On November 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-17—Business Combinations (Topic 805): “Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this ASU are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Company does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements.

 

On November 2014, the FASB issued ASU No. 2014-16—Derivatives and Hedging (Topic 815): “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. The Company does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements.

 

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern.” This ASU requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. This ASU requires management to evaluate, for each reporting period, whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a significant impact on its financial statements.

 

 47 

 

 

In June 2014, the FASB issued ASU No. 2014-10, “Development Stage Entities”. The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP.  

 

In addition, the amendments eliminate the requirements for development stage entities to:

 

present inception-to-date information in the statements of income, cash flows, and shareholder equity,

 

label the financial statements as those of a development stage entity,

 

disclose a description of the development stage activities in which the entity is engaged, and

 

disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

 

The amendments in this update are applied retrospectively. The early adoption of ASU 2014-10 is permitted which removed the development stage entity financial reporting requirements from the Company. The Company adopted it as of December 31, 2014. 

 

NOTE 3 – SHORT TERM NOTE

 

On March 17, 2015, the Company entered into a promissory note with Peter Lambert for a loan of $25,000 that became due on June 15, 2015. The loan carries an interest at the rate of $55 per day. On June 12, 2015, the parties amended this promissory note so that the loan was extended and will accrue interest at $55 per day until this note is paid in full. As of June 30, 2015, there was $5,833 interest accrued on the loan.

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

Starting January, 1 2015 Mr. Fleming is accruing a consulting fee of $1,500 a month until the Company puts a formal contract in place. As of June 30, 2015, the Company paid Mr. Fleming $3,666 of this consulting fee and there is a balance of $5,333 in accounts payable. There is no written agreement for this consulting fee.

 

On March 31, 2015, Mr. Fleming transferred $5,743 of various office equipment and supplies to the Company.  The Company is carrying the balance due to Mr. Fleming under short-term liabilities and will reimburse Mr. Fleming during the current fiscal year. Mr. Fleming has a balance of $6,950 owed to him under “due to officers” for the transfer of assets and various out of pocket expenses.

 

 48 

 

 

NOTE 5 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the financial statements, the Company has no established source of revenue. This raises substantial doubt about the Company's ability to continue as a going concern. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

 

The Company’s activities to date have been supported by equity financing. It has sustained losses in all previous reporting periods with an inception to date loss of $74,448,788 as of June 30, 2015. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan. In the alternative, the Company may be amenable to a sale, merger or other acquisition in the event such transaction is deemed by management to be in the best interests of the shareholders.

 

NOTE 6 – COMMON STOCK

 

On April 27, 2015, the Company completed a 3,000 to 1 reverse split of its issued and outstanding shares of common stock, taking the balance from 3,013,552,063 to 1,004,517. As of June 30, 2015, the number of issued and outstanding shares of common stock was 1,012,029 (includes shares issued for purposes of rounding).

 

NOTE 7 – LEGAL SERVICES

 

The Company has entered into an attorney-client contract with Brian F. Faulkner, A Professional Law Corporation, for corporate and securities law work for the company. This contract, dated April 3, 2015 (amended and restated on July 13, 2015), is for $100,000, $25,000 of which was accrued as of June 30, 2015.

 

NOTE 8 – SUBSEQUENT EVENTS

 

On September 3, 2015, the Company completed an Acquisition Agreement under which the Company acquired all of the equity interests of Stimulating Software, LLC, a Florida limited liability company, the acquisition of all the common stock of Inner Four, Inc., a Florida corporation, and all of the common and preferred stock of Play Celebrity Games, Inc., a Delaware corporation.

 

Effective on October 21, 2015, the Company filed a Certificate of Amendment with the Nevada Secretary of State to change its name from “TBC Global News Network, Inc.” to “InCapta, Inc.”

 

 49 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

InCapta, Inc.

(formerly known as TBC Global News Network, Inc.)

 

We have audited the accompanying balance sheets of InCapta, Inc. (formerly known as TBC Global News Network, Inc.) (“Company”) as of December 31, 2014 and 2013, and the related statements of operations, stockholders’ deficit, and cash flows for the years ended December 31, 2014 and 2013. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years ended December 31, 2014 and 2013, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses, has had recurring negative cash flows from operations, and has an accumulated deficit that raises substantial doubt over its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3, which includes the raising of additional equity financing or merger with another entity. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Anton & Chia, LLP  
Newport Beach, CA  
August 5, 2015  

 

 50 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

BALANCE SHEETS

 

   December 31,
2014
   December 31,
2013
 
         
ASSETS          
Current assets:          
Cash  $   $ 
Total current assets        
Total assets  $   $ 
           
LIABILITIES AND STOCKHOLDERS’  DEFICIT          
Short-term liabilities:          
Accounts payable  $170,187   $166,962 
Due to officers   404     
Loans payable        
Total short-term liabilities   170,591    166,962 
           
Long-term liabilities:          
Accrued litigation costs       3,100,291 
Total long-term liabilities       3,100,291 
           
Total liabilities   170,591    3,267,253 
           
Stockholders’ deficit:          
Common stock; $0.001 par value; 5,000,000,000 shares authorized, 1,004,517 and 1,004,517 shares issued and outstanding as of December 31, 2014 and December 31, 2013 (1)   1,005    1,005 
Series B common stock; $0.001 par value; 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2014 and December 31, 2013        
Preferred stock; $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2014 and December 31, 2013        
Additional paid-in capital   74,203,330    74,203,330 
Accumulated deficit   (74,374,926)   (77,471,588)
Total stockholders’ deficit   (170,591)   (3,267,253)
Total liabilities and stockholders’ deficit  $   $ 

 

(1) The number of issued and outstanding shares of common stock reflects the amount immediately after a 3,000 to 1 reverse split of the Company’s common stock that was effective on April 27, 2015 (1,004,517).

 

The accompanying notes are an integral part of these financial statements

 

 51 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

STATEMENTS OF OPERATIONS

 

   Year Ended
December 31,
2014
   Year Ended
December 31,
2013
 
         
Revenue:          
Gross sales  $   $ 
           
Net sales        
           
Costs and expenses:          
General and administrative   3,629    7,308 
           
Total costs and expenses   3,629    7,308 
           
Loss from operations   (3,629)   (7,308)
           
Other income and (expenses):          
Interest expense        
Debt write-off   3,100,291     
           
Total other income and (expenses)   3,100,291     
           
Net income from continuing operations   3,096,662    (7,308)
           
Net income (loss)  $3,096,662   $(7,308)
           
Basic earnings (loss) per share  $3.08   $(0.01)
           
Weighted average number of common shares outstanding (1)   1,004,517    1,004,517 
           
Diluted earnings (loss) per share  $3.08   $(0.01)
           
Weighted average number of common shares outstanding (1)   1,004,517    1,004,517 

 

(1) The number of shares of common stock reflects the amount immediately after a 3,000 to 1 reverse split of the Company’s common stock that was effective on April 27, 2015.

 

The accompanying notes are an integral part of these financial statements

 

 52 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR YEARS ENDED DECEMBER 31, 2014 AND DECEMBER 31, 2013

  

   Common Stock   Additional Paid-In   Accumulated     
   Shares (1)   Amount   Capital   Deficit   Total 
                     
Beginning Balance, January 1, 2013   1,004,517   $1,005   $74,203,330   $(77,464,280)  $(3,259,945)
                          
Net Loss December 31, 2013               (7,308)   (7,308)
                          
Balance, December 31, 2013   1,004,517    1,005    74,203,330    (77,471,588)   (3,267,253)
                          
Net Income from December 31, 2014               3,096,662    3,096,662 
                          
Balance, December 31, 2014   1,004,517   $1,005   $74,203,330   $(74,374,926)  $(170,591)

 

(1) The number of shares of common stock reflects the amount immediately after a 3,000 to 1 reverse split of the Company’s common stock that was effective on April 27, 2015.

 

The accompanying notes are an integral part of these financial statements

 

 53 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

STATEMENTS OF CASH FLOWS

  

   Year Ended
December 31,
   Year Ended
December 31,
 
   2014   2013 
         
Cash flows from operating activities:          
Net income (loss)  $3,096,662   $(7,308)
Adjustments to reconcile net income to net cash:          
Gain on extinguishment of debt   3,100,291     
Change in current assets and liabilities:          
Change in due to officers   404     
Change in accounts payable   3,225    7,308 
           
Net cash provided by (used in) operating activities        
           
Net increase (decrease) in cash        
           
Cash at beginning of period        
           
Cash at end of period  $   $ 
           
Supplemental disclosures of cash flow:          
Interest paid  $   $ 
           
Taxes paid  $   $ 

 

The accompanying notes are an integral part of these financial statements

 

 54 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

NOTES TO FINANCIAL STATEMENTS

(Audited)

 

NOTE 1 – NATURE OF BUSINESS

 

The accompanying audited financial statements of InCapta, Inc. (formerly known as TBC Global News Network, Inc.), a Nevada corporation (“Company”), have been prepared in accordance with Securities and Exchange Commission (“SEC”) requirements for audited financial statements. The financial statements include the accounts of the Company. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All common stock share numbers reflect a 1,000 to 1 reverse split of the Company’s common stock effective on September 6, 2007, a 10,000 to 1 reverse split of the Company’s common stock effective on April 9, 2009, and a 3,000 to 1 reverse split of the Company’s common stock effective on April 27, 2015.

 

In November 2008, the Company halted its previous operations of providing online movie rentals (also referred to as a “DVD”) and video game rentals to subscribers through its Internet website, gameznflix.com.

 

On May 7, 2009, the Company filed a Certificate of Amendment to Articles of Incorporation with the Nevada Secretary of State. This amendment changed the name of the Company to TBC Global News Network, Inc. This corporate action had previously been approved by consent of a majority of the outstanding shares of common stock of the Company. As of July 30, 2009, the new trading symbol for the Company is “TGLN.”

 

During the first quarter of 2010, the Company ceased its prior operations of producing video news, business profiles, and television advertisements.

 

On March 19, 2010, the Company entered into a Purchase and Sale Agreement with Sterling Yacht Sales, Inc., and it stockholders, Glenn W. McMachen, Sr., and Arlene McMachen. However, since the buyers breached this agreement the transaction was rescinded, and therefore no consolidation is required.

 

From August 2010 until August 2014, the Company did not operate. Upon assuming the positions as a director and officer of the Company in August 2014, Mr. Fleming commenced operations of the Company as a consultant and also seeking opportunities for the Company.

 

On August 15, 2014, Mr. McMachen, the Company’s sole board member, and chief executive officer, president, and secretary/treasurer of the Company, appointed John Fleming as a new member of the Company’s board of directors. Mr. McMachen then resigned from all positions with the Company. Mr. Fleming was then appointed as the Company’s executive officer, president, and secretary/treasurer. Mr. Fleming will serve in these positions until the next annual meeting of stockholders or until their successors are duly elected and have qualified.

 

 55 

 

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements.

 

Use of Estimates.

 

The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

 

Cash and Cash Equivalents.

 

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2014.

 

Income Taxes.

 

The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

 

At December 31, 2014 and December 31, 2013 the Company has net operating loss carry-forwards totaling approximately $74,375,351 and 77,472,013 respectively. The carry-forwards begin to expire in fiscal year 2034. The Company has established a valuation allowance for the full tax benefit of the operating loss carry-forwards due to the uncertainty regarding realization. Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of any of the Company's net operation loss and credit carry forwards may be limited if cumulative changes in ownership of more than 50% occur during any three year period.

 

 56 

 

 

Impairment of Long-Lived Assets.

 

In accordance with Accounting Standards Codification (“ASC”) Topic 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” long-lived assets such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

 

Net Income (Loss) Per Share.

 

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of outstanding shares of common stock during the period. Diluted net income (loss) per share is computed by dividing the weighted-average number of outstanding shares of common stock, including any potential common shares outstanding during the period, when the potential shares are dilutive. Potential common shares consist primarily of incremental shares issuable upon the assumed exercise of stock options and warrants to purchase common stock using the treasury stock method. The calculation of diluted net income (loss) per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive, as they were during 2014 and 2013. During December 31, 2014 and 2013, the number of potential common shares excluded from diluted weighted-average number of outstanding shares was 0 and 0, respectively.

 

Stock-Based Compensation.

 

Options granted to consultants, independent representatives and other non-employees are accounted for using the fair value method as prescribed by ASC Topic 718, “Share-Based Payment.”

 

Recent Pronouncements.

 

On November 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-17—Business Combinations (Topic 805): “Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this ASU are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Company does not expect the adoption of this ASU to have a significant impact on its financial statements.

 

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On November 2014, the FASB issued ASU No. 2014-16—Derivatives and Hedging (Topic 815): “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. The Company does not expect the adoption of this ASU to have a significant impact on its financial statements.

 

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern.” This ASU requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. This ASU requires management to evaluate, for each reporting period, whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a significant impact on its financial statements.

 

In June 2014, the FASB issued ASU No. 2014-10, “Development Stage Entities”. The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP.  

 

In addition, the amendments eliminate the requirements for development stage entities to:

 

present inception-to-date information in the statements of income, cash flows, and shareholder equity,

 

label the financial statements as those of a development stage entity,

 

disclose a description of the development stage activities in which the entity is engaged, and

 

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disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

 

The amendments in this update are applied retrospectively. The early adoption of ASU 2014-10 is permitted which removed the development stage entity financial reporting requirements from the Company. The Company adopted it as of December 31, 2014. 

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has sustained losses in all previous reporting periods, with an inception to date loss of $74,374,926 and $77,471,588 as of December 31, 2014 and December 31, 2013, respectively. The Company has also suffered recurring losses and has had recurring negative cash flows from operations. This raises substantial doubt about the Company’s ability to continue as a going concern. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

 

The Company’s activities to date have been supported by equity financing. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan. In the alternative, the Company may be amenable to a sale, merger or other acquisition in the event such transaction is deemed by management to be in the best interests of the shareholders.

 

NOTE 4 – SUBSEQUENT EVENTS

 

Starting January, 1 2015 Mr. Fleming is accruing a consulting fee of $1,500 a month until the Company puts a formal contact in place. As of June 30, 2015, the Company paid Mr. Fleming $3,666 of this consulting fee and there is a balance of $5,333 in accounts payable. There is no written agreement for this consulting fee.

 

On March 17, 2015, the Company entered into a promissory note with Peter Lambert for a loan of $25,000 that became due on June 15, 2015. The loan carries an interest at the rate of $55 per day. On June 12, 2015, the parties amended this promissory note so that the loan was extended and will accrue interest at $55 per day until this note is paid in full. As of June 30, 2015, there was $5,833 interest accrued on the loan.

 

On March 31, 2015, Mr. Fleming transferred $5,743 of various office equipment and supplies to the Company.  The Company is carrying the balance due to Mr. Fleming under short-term liabilities and will reimburse Mr. Fleming during the current fiscal year. Mr. Fleming has a balance of $6,950 owed to him under “due to officers” for the transfer of assets and various out of pocket expenses.

 

 59 

 

 

On April 27, 2015, the Company completed a 3,000 to 1 reverse split of its issued and outstanding shares of common stock, taking the balance from 3,013,552,063 to 1,004,517. As of June 30, 2015, the number of issued and outstanding shares of common stock was 1,012,029 (includes shares issued for purposes of rounding).

 

On September 3, 2015, the Company completed an Acquisition Agreement under which the Company acquired all of the equity interests of Stimulating Software, LLC, a Florida limited liability company, the acquisition of all the common stock of Inner Four, Inc., a Florida corporation, and all of the common and preferred stock of Play Celebrity Games, Inc., a Delaware corporation.

 

Effective on October 21, 2015, the Company filed a Certificate of Amendment with the Nevada Secretary of State to change its name from “TBC Global News Network, Inc.” to “InCapta, Inc.”

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of Inner Four, Inc.

 

We have audited the accompanying balance sheets of Inner Four, Inc. (“Company”) as of December 31, 2014 and 2013, and the related statements of operations, statement of changes in stockholders’ equity, and statements of cash flows for the years then ended. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. The audits also include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Anton & Chia, LLP  
Newport Beach, CA  
October 5, 2015  
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INNER FOUR, INC.

BALANCE SHEETS

  

   December 31, 2014   December 31, 2013 
         
ASSETS          
           
Current assets:          
Cash  $8,957   $41,528 
Accounts receivable   2,389    2,661 
Total current assets   11,346    44,189 
           
Total assets  $11,346   $44,189 
           
LIABILITIES & STOCKHOLDERS' EQUITY          
           
Short term liabilities:          
Accounts payable  $   $ 
Total short term liabilities        
           
Total liabilities        
           
Stockholders’ equity:          
Draw   (314,509)   (267,251)
Retained earnings   325,855    311,440 
           
Total stockholders’ equity   11,346    44,189 
           
Total liabilities and stockholders’ equity  $11,346   $44,189 

 

The accompanying notes are an integral part of these financial statements

 

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INNER FOUR, INC.

STATEMENTS OF OPERATIONS

  

   Year Ended
December 31,
   Year Ended
December 31
 
   2014   2013 
         
Revenues:          
Gross sales  $15,138   $64,705 
Cost of sales        
           
Gross profit   15,138    64,705 
           
Costs and expenses:          
General and administrative   732    1,558 
           
Total expenses   732    1,558 
           
Income from operations   14,406    63,147 
           
Other income and expenses:          
Other income   9    7 
           
Total other income   9    7 
           
Net income  $14,415   $63,154 

 

The accompanying notes are an integral part of these financial statements

 

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INNER FOUR, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ RQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

  

       Retained     
   Draw   Earnings   Total 
             
Beginning balance  $(155,745)  $248,286   $92,541 
                
Draw   (111,506)       (111,506)
                
Net income from December 31, 2013       63,154    63,154 
                
Balance, December 31, 2013  $(267,251)  $311,440   $44,189 
                
Draw   (47,258)       (47,258)
                
Net income from December 31, 2014       14,415    14,415 
                
Balance, December 31, 2014  $(314,509)  $325,855   $11,346 

 

The accompanying notes are an integral part of these financial statements

 

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INNER FOUR, INC.

STATEMENTS OF CASH FLOWS

 

   Year Ended
December 31,
   Year Ended
December 31
 
   2014   2013 
         
Cash flows from operating activities:          
Net income  $14,415   $63,154 
Changes in operating assets and liabilities:          
Change in accounts receivable   272    1,514 
Change in accounts payable       (1)
           
Net cash provided by operating activities   14,687    64,667 
           
Cash flows from financing activities:          
Distribution  $(47,258)  $(111,506)
           
Net cash used in financing activities   (47,258)   (111,506)
           
Net decrease in cash   (32,571)   (46,839)
           
Cash at beginning of year   41,528    88,367 
           
Cash at end of period  $8,957   $41,528 
           
Supplemental disclosures of cash flow:          
Non-cash activities  $   $ 

 

The accompanying notes are an integral part of these financial statements

 

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INNER FOUR, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization.

 

Inner Four, Inc. (“Company”) was incorporated on June 14, 2007 under the laws of the State of Florida.  .  On September 3, 2015 100% of the Company was purchased by TBC Global News Network, Inc., a Nevada corporation (“TBC Global”), along with Stimulating Software, LLC, a Florida limited liability company (“Stimulating Software”), and Play Celebrity Games, Inc., a Delaware corporation (“Play Celebrity”), all as wholly owned subsidiaries of TBC Global.

 

Basis of Presentation.

 

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).   

 

Nature of Business.

 

The Company has a library of Apps on I-tunes and Google store that generates revenues through App purchases, In App purchases and per click advertising.

 

Use of Estimates.

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

 

Cash.

 

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.  The Company had cash balances of $8,957 and $41,528 at the end of the years ended December 31, 2014 and 2013, respectively.

 

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Revenue Recognition.

 

The Company generates revenue from three sources: sale of game applications, sale of advertising provided with games, internet marketing sales with games on per click basis ($0.01 or $0.02 per click) by users. The Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured, which is typically after receipt of payment and delivery. The Company has service agreements with Apple and Google, and the Company receives revenue on net basis, which is 70% and 60% of the revenue from sale of game applications and sale of advertising provided with games.

  

Income Taxes.

 

The Company accounts for income taxes using the asset and liability method.  Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

  

Impairment of Long-Lived Assets.

 

In accordance with Accounting Standards Codification (“ASC”) Topic 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” long-lived assets such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.  Recoverability of assets groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group.  If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

 

Net Income Per Share.

 

Basic net income per share is computed by dividing net income by the weighted-average number of outstanding shares of common stock during the period.

 

Recent Pronouncements.

 

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40).” The amendments of this ASU will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) ending after December 15, 2015. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. Early adoption is permitted. We expect to adopt this new standard in the first quarter of fiscal year 2017. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

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In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835-30)”, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) beginning after December 15, 2015, and will require retrospective application. Early adoption is permitted. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of fiscal year 2018. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, we may adopt the standard in either the first quarter of fiscal year 2018 or 2019. We are currently evaluating the timing and method of adoption and the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.

   

NOTE 2 – Related Party Transactions

 

As president of Inner Four, Inc., John Swartz has taken a draw of $47,258 and $111,506 during the years ended December 31, 2014 and 2013, respectively.

 

NOTE 3 – SUBSEQUENT EVENTS

 

On September 3, 2015 the Company become a wholly owned subsidiary of TBC Global. In consideration 575 restricted shares of Series A preferred stock and 4,936,718 restricted shares of restricted common stock were issued.

 

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INNER FOUR, INC.

BALANCE SHEETS 

 

   June 30, 2015   December 31, 2014 
   (Unaudited)     
         
ASSETS          
           
Current assets:          
Cash  $16,617   $8,957 
Accounts receivable   4,141    2,389 
           
Total current assets   20,758    11,346 
           
Total assets  $20,758   $11,346 
           
LIABILITIES & STOCKHOLDERS' EQUITY          
           
Short term liabilities:          
Accounts payable  $   $ 
Total short term liabilities        
           
Total liabilities        
           
Stockholders’ Equity          
Draw   (314,509)   (314,509)
Retained earnings   335,267    325,855 
           
Total stockholders’ equity   20,758    11,346 
           
Total liabilities and stockholders’ equity  $20,758   $11,346 

 

The accompanying notes are an integral part of these unaudited financial statements

 

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INNER FOUR, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

 

   Six Months
Ended
June 30,
   Six Months
Ended
June 30,
 
   2015   2014 
         
Revenues:          
Gross sales  $11,674   $7,147 
Cost of sales        
           
Gross profit   11,674    7,147 
           
Costs and expenses:          
General and administrative   2,264    150 
           
Total expenses   2,264    150 
           
Income from operations   9,410    6,997 
           
Other income and expenses:          
Other income   2    8 
           
Total other income   2    8 
           
Net Income  $9,412   $7,005 

 

The accompanying notes are an integral part of these unaudited financial statements

 

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INNER FOUR, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six Months
Ended
June 30,
   Six Months
Ended
June 30,
 
   2015   2014 
         
Cash flows from operating activities:          
Net income  $9,412   $7,005 
Changes in operating assets and liabilities:          
Change in accounts receivable   (1,752)   1,095 
           
Net cash provided by operating activities   7,660    8,100 
           
Cash flows from financing activities:          
Distribution       (47,258)
           
Net cash used in financing activities       (47,258)
           
Net increase (decrease) in cash   7,660    (39,158)
           
Cash at beginning of year   8,957    41,528 
           
Cash at end of period  $16,617   $2,370 
           
Supplemental disclosures of cash flow:          
Non-cash activities  $   $ 

 

The accompanying notes are an integral part of these unaudited financial statements

 

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INNER FOUR, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014

(Unaudited)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization.

 

Inner Four, Inc. (“Company”) was incorporated on June 14, 2007 under the laws of the State of Florida.  .  On September 3, 2015 100% of the Company was purchased by TBC Global News Network, Inc., a Nevada corporation (“TBC Global”), along with Stimulating Software, LLC, a Florida limited liability company (“Stimulating Software”), and Play Celebrity Games, Inc., a Delaware corporation (“Play Celebrity”), all as wholly owned subsidiaries of TBC Global.

 

Basis of Presentation.

 

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).   

 

Nature of Business.

 

The Company has a library of Apps on I-tunes and Google store that generates revenues through App purchases, In App purchases and per click advertising.

  

Use of Estimates.

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

 

Cash.

 

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.  The Company had cash balances of $16,617 and $8,957 at the end of the periods ended June 30, 2015 and December 31, 2014 respectively.

 

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Revenue Recognition.

 

The Company generates revenue from three sources: sale of game applications, sale of advertising provided with games, internet marketing sales with games on per click basis ($0.01 or $0.02 per click) by users. The Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured, which is typically after receipt of payment and delivery. The Company has service agreements with Apple and Google, and the Company receives revenue on net basis, which is 70% and 60% of the revenue from sale of game applications and sale of advertising provided with games.

 

Income Taxes.

 

The Company accounts for income taxes using the asset and liability method.  Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

 

Impairment of Long-Lived Assets.

 

In accordance with Accounting Standards Codification (“ASC”) Topic 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” long-lived assets such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.  Recoverability of assets groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group.  If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

 

Recent Pronouncements.

 

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40).” The amendments of this ASU will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) ending after December 15, 2015. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. Early adoption is permitted. We expect to adopt this new standard in the first quarter of fiscal year 2017. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

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In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835-30)”, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) beginning after December 15, 2015, and will require retrospective application. Early adoption is permitted. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of fiscal year 2018. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, we may adopt the standard in either the first quarter of fiscal year 2018 or 2019. We are currently evaluating the timing and method of adoption and the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.

 

NOTE 2 – Related Party Transactions

 

As president of Inner Four, John Swartz has taken a draw of $0 and $47,258 during the periods ended June 30, 2015 and December 31, 2014 respectively. The balance of his draw from the Company was $314,509 and $314,509 at June 30, 2015 and December 31, 2014, respectively.

 

NOTE 3 – SUBSEQUENT EVENTS

 

On September 3, 2015 the Company become a wholly owned subsidiary of TBC Global. In consideration 575 restricted shares of Series A preferred stock and 4,936,718 restricted shares of restricted common stock were issued.

  

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Management and
Members of Stimulating Software, LLC

 

We have audited the accompanying balance sheet of Stimulating Software, LLC (“Company”) as of December 31, 2014, and the related statement of operations, statement of changes in members’ equity, and statement of cash flows for the period of November 5, 2014 (inception) to December 31, 2014. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. The audit also include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014, and the results of its operations and its cash flows for the period of November 5, 2014 (inception) to December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has had limited revenue and income since inception. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1, which includes the raising of additional funds through equity or debt financing, collaborative or other arrangements with corporate partners, licensees or others. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Anton & Chia, LLP  
Newport Beach, CA  
October 5, 2015  
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STIMULATING SOFTWARE, LLC

BALANCE SHEETS

  

   June 30, 2015   December 31, 2014 
   (Unaudited)     
         
ASSETS          
Current assets:          
Cash  $5,301   $4,838 
Accounts receivable   1,429     
Total current assets   6,730    4,838 
           
Total assets  $6,730   $4,838 
           
LIABILITIES & MEMBERS’ EQUITY          
           
Short term liabilities:          
Accounts payable  $   $ 
Total short term liabilities        
           
Total liabilities        
           
Members’ equity:          
Members’ contribution   5,226    5,125 
Retained earnings   1,504    (287)
           
Total members’ equity   6,730    4,838 
           
Total liabilities and members’ equity  $6,730   $4,838 

 

The accompanying notes are an integral part of these financial statements

 

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STIMULATING SOFTWARE, LLC

STATEMENTS OF OPERATIONS

 

   Six Months
Ended
   For the Period of
November 5, 2014
 
   June 30, 2015   (Inception) to 
   (Unaudited)   December 31, 2014 
         
Revenues:          
Gross sales  $2,037   $ 
Cost of sales        
           
Gross profit   2,037     
           
Costs and expenses          
General and administrative   246    287 
           
Total expenses   246    287 
           
Income (loss) from operations   1,791    (287)
           
Other income and expenses          
Other income        
           
Total other income        
           
Net income (loss)  $1,791   $(287)

 

The accompanying notes are an integral part of these financial statements

 

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STIMULATING SOFTWARE, LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE PERIOD OF NOVEMBER 5, 2014 (INCEPTION) TO DECEMBER 31, 2014

  

   Members'   Retained     
   Contribution   Earnings   Total 
             
Beginning balance  $   $   $ 
                
Members’ contribution   5,125        5,125 
                
Net income from December 31, 2014       (287)   (287)
                
Balance, December 31, 2014  $5,125   $(287)  $4,838 
                
Members’ contribution   101        101 
                
Net income from June 30, 2015       1,791    1,791 
                
Balance, June 30, 2015  $5,226   $1,504   $6,730 

 

The accompanying notes are an integral part of these financial statements

 

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STIMULATING SOFTWARE, LLC

STATEMENTS OF CASH FLOWS

 

   Six Months
Ended
   For the Period of
November 5, 2014
 
   June 30, 2015   (Inception) to 
   (Unaudited)   December 31, 2014 
         
Cash flows from operating activities:          
Net income (loss)  $1,791   $(287)
Changes in operating assets and liabilities:          
Change in accounts receivable   (1,429)    
           
Net cash provided by (used in) operating activities   362    (287)
           
Cash flows from financing activities:          
Members’ contribution   101    5,125 
           
Net cash provided by financing activities   101    5,125 
           
Net increase in cash   463    4,838 
           
Cash at beginning of year   4,838     
           
Cash at end of period  $5,301   $4,838 
           
Supplemental disclosures of cash flow:          
Non-cash activities  $   $ 

  

The accompanying notes are an integral part of these financial statements

 

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STIMULATING SOFTWARE, LLC

NOTES TO THE FINANCIAL STATEMENTS FOR

THE SIX MONTHS ENDED JUNE 30, 2015 (UNAUDITED) AND

FOR THE PERIOD OF NOVEMBER 5, 2014 (INCEPTION) TO DECEMBER 31, 2014

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization.

 

Stimulating Software, LLC (“Company”) was incorporated on November 5, 2014 under the laws of the State of Florida.  On September 3, 2015 100% of the Company was purchased by TBC Global News Network, Inc., a Nevada corporation (“TBC Global”), along with Inner Four, Inc., A Florida corporation (“Inner Four”), and Play Celebrity Games, Inc., a Delaware corporation (“Play Celebrity”), all as wholly owned subsidiaries of TBC Global.

 

Basis of Presentation.

 

The financial statements include the accounts of the Company.  The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The Financials are presented as of December 31, 2014.

 

Nature of Business.

 

The Company has a library of Apps on I-tunes and Google store that generates revenues through App purchases, In App purchases and per click advertising.

 

Use of Estimates.

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

 

Cash.

 

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.  The Company had cash balances of $4,838 and $5,301 at the end of the periods ended December 31, 2014 and June 30, 2015, respectively.

 

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Revenue Recognition

 

The Company generates revenue from two sources: sale of game applications, sale of advertising provided with games. The Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured, which is typically after receipt of payment and delivery. The Company has service agreements with Apple and Google, and the Company receives revenue on net basis, which is 70% and 60% of the revenue from sale of game applications and sale of advertising provided games, respectively.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method.  Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

 

Impairment of Long-Lived Assets

 

In accordance with Accounting Standards Codification (“ASC”) Topic 360, “Accounting for the Impairment or Disposal of Long-Lived Assets,” long-lived assets such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.  Recoverability of assets groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group.  If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the company will continue as a going concern. The Company has only limited revenue from inception to date. This raises substantial doubt about the Company's ability to continue as a going concern. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

 

The Company is currently building up its revenue stream. The Company has retained earnings of $1,504 as of June 30, 2015. Management’s plans include the raising of additional funds through equity or debt financing, collaborative or other arrangements with corporate partners, licensees or others.

 

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Recent Pronouncements.

 

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40).” The amendments of this ASU will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) ending after December 15, 2015. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. Early adoption is permitted. We expect to adopt this new standard in the first quarter of fiscal year 2017. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835-30)”, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) beginning after December 15, 2015, and will require retrospective application. Early adoption is permitted. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of fiscal year 2018. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, we may adopt the standard in either the first quarter of fiscal year 2018 or 2019. We are currently evaluating the timing and method of adoption and the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.

 

NOTE 2 – ASSETS

 

The Company currently does not have any asset on its books as the apps were expensed as they were developed by the parent company and assigned to the Company.  

 

NOTE 3 – Related Party Transactions

 

As the principal member of the Company, John Swartz has provided the Company with $5,125 and $101 during the periods ended December 31, 2014 and June 30, 2015, respectively.

 

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NOTE 4 – SUBSEQUENT EVENTS

 

On September 3, 2015 the Company became a wholly owned subsidiary of TBC Global. In consideration the members received 2,000 restricted shares of Series A preferred stock and 4,936,717 restricted shares of common stock.

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

To the Board of Directors and
Stockholders of Play Celebrity Games, Inc.

 

We have audited the accompanying balance sheet of Play Celebrity Games, Inc. (“Company”) as of June 30, 2015, and the related statement of operations, statement of changes in stockholders’ equity, and statement of cash flows for the period of June 5, 2015 (inception) to June 30, 2015. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. The audit also include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2015, and the results of its operations and its cash flows for the period of June 5, 2015 (inception) to June 30, 2015.in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has had no revenue and income since inception. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1, which includes the raising of additional funds through equity or debt financing, collaborative or other arrangements with corporate partners, licensees or others. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Anton & Chia, LLP  
Newport Beach, CA  
October 5, 2015  

 

 

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PLAY CELEBRITY GAMES, INC.

BALANCE SHEET

 

   June 30, 2015 
     
ASSETS     
Cash  $ 
      
Total assets  $ 
      
STOCKHOLDERS’ EQUITY     
    ` 
Stockholders’ equity:     
Subscription receivable  $(111)
Series A preferred stock,  $0.01 par value, (100 shares authorized; 100 shares issued and outstanding as of June 30, 2015)   1 
Series B preferred stock,  $0.01 par value, (10,000 shares authorized; 10,000 shares issued and outstanding as of June 30, 2015)   100 
Series C preferred stock, $0.01 par value, (10,000 shares authorized; no shares issued and outstanding as of June 30, 2015)    
Common stock,  $0.01 par value, (10,000 shares authorized; 1,000 shares issued and outstanding as of June 30, 2015)   10 
      
Total stockholders’ equity    
      
Total liabilities and stockholders’ equity  $ 

 

The accompanying notes are an integral part of these financial statements

 

 85 

 

 

PLAY CELEBRITY GAMES, INC.

STATEMENT OF OPERATIONS

 

   For the Period of 
   June 5, 2015 
   (Inception) to 
   June 30, 2015 
     
Revenues:     
Gross sales  $ 
Cost of sales    
      
Gross profit    
      
Expenses:     
General and administrative    
      
Total expenses    
      
Income (loss) from operations    
      
Other income and expenses     
Other income    
      
Total other income    
      
Net income (loss)  $ 

 

The accompanying notes are an integral part of these financial statements

 

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PLAY CELEBRITY GAMES, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ RQUITY

FOR THE PERIOD OF JUNE 5, 2015 (INCEPTION) TO JUNE 30, 2015

 

   Preferred Stock   Preferred Stock   Preferred Stock   Preferred Stock   Common   Common   Subscription     
   Series A   Series A   Series B   Series B   Stock   Stock   Receivable   Total 
                                 
Beginning balance      $       $       $   $   $ 
                                         
Share issuance   100    1    10,000    100    1,000    10    (111)    
                                         
Net income                                
                                         
Balance, June 30, 2015   100   $1    10,000   $100    1,000   $10   $(111)  $ 

 

The accompanying notes are an integral part of these financial statements

 

 87 

 

 

PLAY CELEBRITY GAMES, INC.

STATEMENT OF CASH FLOWS

 

   For the Period of 
   June 5, 2015 
   (Inception) to 
   June 30, 2015 
     
Net income (loss)  $ 
      
Cash flows from financing activities:     
Stock issuance   111 
Subscription receivable   (111)
Net cash provided by (used in) financing activities    
      
Net increase (decrease) in cash    
      
Cash at beginning of year    
      
Cash at end of period  $ 
      
Supplemental disclosures of cash flow:     
Non-cash activities  $ 

 

The accompanying notes are an integral part of these financial statements

 

 88 

 

 

PLAY CELEBRITY GAMES, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD FROM JUNE 5, 2015 (INCEPTION) TO JUNE 30, 2015

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization.

 

Play Celebrity Games, Inc. (“Company”) was incorporated on June 5, 2015, under the laws of the State of Delaware.   On September 3, 2015 100% of the Company was purchased by TBC Global News Network, Inc., a Nevada corporation (“TBC Global”), along with Inner Four, Inc., A Florida corporation (“Inner Four”), and Stimulating Software, LLC, a Florida limited liability company (“Stimulating Software”), all as wholly owned subsidiaries of TBC Global.

 

Basis of Presentation.

 

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).   

 

Nature of Business.

 

The Company is currently negotiating with various developers to develop new Apps under a revenue share model.

 

Use of Estimates.

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

 

Cash.

 

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.  The Company had no cash balance as of June 30, 2015. 

 

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Income Taxes.

 

The Company accounts for income taxes using the asset and liability method.  Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

 

Net Loss Per Share.

 

Basic net income per share is computed by dividing net income by the weighted-average number of outstanding shares of common stock during the period.

 

Going Concern.

 

The accompanying financial statements have been prepared assuming that the company will continue as a going concern. The Company has no established source of revenue. This raises substantial doubt about the Company's ability to continue as a going concern. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

 

The Company has not had any expenses or revenue for the period of June 5, 2015 (inception) to June 30, 2015. Management’s plans include the raising of additional funds through equity or debt financing, collaborative or other arrangements with corporate partners, licensees or others.

 

Recent Pronouncements.

 

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40).” The amendments of this ASU will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) ending after December 15, 2015. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. Early adoption is permitted. We expect to adopt this new standard in the first quarter of fiscal year 2017. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

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In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835-30)”, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. The disclosure requirements will be effective for annual periods (and interim periods within those annual periods) beginning after December 15, 2015, and will require retrospective application. Early adoption is permitted. The Company does not expect the adoption to have a material impact on our Consolidated Financial Statements.

 

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of fiscal year 2018. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, we may adopt the standard in either the first quarter of fiscal year 2018 or 2019. We are currently evaluating the timing and method of adoption and the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.

 

NOTE 2 – PREFERRED STOCK

 

On June 5, 2015, the Company, with the approval of its two founders, approved the filing of a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company’s Series A Preferred Stock, Series B Preferred Stock and Series C Preferred stock

 

The terms of the Certificate of Designation of the Series A Preferred Stock, has a mandatory 1:10 conversion at Midnight of December 31, 2015.

 

The terms of the Certificate of Designation of the Series B Preferred Stock include the right to vote in aggregate, on all shareholder matters equal to 50% votes per share of Common Stock, Dividends equal to 10% of all dividends declared and distributed to holders of the Common Stock. Series B Preferred Stock is not eligible for any conversion and may act alone to amend any designation to the Preferred Series C Stock.

 

The terms of the Certificate of Designation of the Series C Preferred Stock include the right to vote in aggregate, on all shareholder matters equal to 50% votes per share of Common Stock, Dividends equal to all dividends declared and distributed to holders of the Common Stock. Series C Preferred Stock is not eligible for any conversion

 

On June 6, 2015 the Company issued 50 shares of Series A preferred stock at par value to Chassin, LLC.

 

On June 6, 2015 the Company issued 50 shares of Series A preferred stock at par value to Team AJ, LLC.

 

On June 6, 2015 the Company issued 5,000 shares of Series B preferred stock at par value to Chassin, LLC.

 

On June 6, 2015 the Company issued 5,000 shares of Series B preferred stock at par value to Team AJ, LLC.

 

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The Company has 100 shares of Series A preferred stock authorized and 100 outstanding as of June 30, 2015.

 

The Company has 10,000 shares of Series B preferred stock authorized and 10,000 outstanding as of June 30, 2015.

 

The Company has 10,000 shares of Series C preferred stock authorized and none outstanding as of June 30, 2015.

 

NOTE 4– COMMON STOCK

 

On June 6, 2015 the Company issued 500 shares of Common stock at par value to Chassin, LLC at par value as one of the founders.

 

On June 6, 2015 the Company issued 500 shares of Common stock at par value to Team AJ, LLC at par value as one of the founders.

 

The Company has 10,000 shares of common stock authorized and 1,000 outstanding as of June 30, 2015

 

NOTE 5 – SUBSEQUENT EVENTS

 

On September 3, 2015 the Company became a wholly owned subsidiary of TBC Global. In consideration the stockholders received 1,470 restricted shares of Series A preferred stock and 29,624,825 restricted shares of common stock.

 

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UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS

 

On September 3, 2015, InCapta, Inc. (formerly known as TBC Global News Network, Inc.) (“Company”) completed an Acquisition Agreement under which the Company acquired all of the equity interests of Stimulating Software, LLC, a Florida limited liability company formed on November 5, 2014 (“Stimulating Software”), the acquisition of all the common stock of Inner Four, Inc., a Florida corporation formed on June 19, 2007 (“Inner Four”), and all of the common and preferred stock of Play Celebrity Games, Inc., a Delaware corporation formed on June 5, 2015 (“Play Celebrity”). This acquisition was accomplished through a payment by the Company of common stock and preferred stock.

 

The following unaudited condensed combined pro forma balance sheet has been developed by applying pro forma adjustments to the separate unaudited balance sheet of the Company at June 30, 2015 included in Company’s interim financial statements included in this Form 10, and the separate unaudited balance sheets of Inner Four, Stimulating Software and Play Celebrity at June 30, 2015.

 

The following unaudited condensed combined pro forma statement of operations has been developed by applying pro forma adjustments to the separate audited statements of operations of the Company included in Company’s audited financial statements included in this Form 10, the separate unaudited interim statement of operations of the Company for the six months ended June 30, 2015 included in this Form 10, the separate unaudited statements of operations of Inner Four and Stimulating Software for the year ended December 31, 2014, and the separate unaudited statements of operations of Inner Four and Stimulating Software for the six months ended June 30, 2015.

 

The historical financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) expected to have a continuing impact on the operating results of the combined company.

 

The following unaudited condensed combined pro forma balance sheet as of June 30, 2015 presents the combined results of the Company’s balance sheet and those of Inner Four, Stimulating Software and Play Celebrity as if the acquisition had occurred prior to that date.

 

The following unaudited condensed combined pro forma statement of operations for the year ended December 31, 2014 and for the six months ended June 30, 2015 present the combined results of the Company’s operations and the results of operations of Inner Four and Stimulating Software as if the acquisition had occurred at December 31, 2014.

 

The unaudited pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. The unaudited condensed combined pro forma financial information is presented for informational purposes only. The unaudited condensed combined pro forma financial information does not purport to represent what the Company’s results of operations would have been had the acquisition actually occurred on the date indicated and it does not purport to project the Company’s results of operations for any future period. There were no material transactions between the Company, on the one hand, and Inner Four, Stimulating Software and Play Celebrity, on the other hand, during the periods presented in the unaudited condensed combined pro forma balance sheet and statement of operations that would need to be eliminated.

 

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The unaudited condensed combined pro forma balance sheet and statement of operations should be read in conjunction with the accompanying Notes to the Unaudited Condensed Combined Pro Forma Financial Statements. All pro forma adjustments and their underlying assumptions are described more fully in the accompanying Notes to the Unaudited Condensed Combined Pro Forma Financial Statements.

 

The unaudited condensed combined pro forma financial information has been prepared using the acquisition method of accounting under accounting principles generally accepted in the United States of America (“U.S. GAAP”). The acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited condensed combined pro forma financial information. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a significant impact on the accompanying unaudited condensed combined pro forma balance sheet and statement of operations, and the combined Company’s future results of operations and financial position.

 

The unaudited condensed combined pro forma financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the acquisition or the costs to combine or associated with the combination of the operations of the Company, and Inner Four and Stimulating Software or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements.

 

In addition, future results may vary significantly from the results reflected in the unaudited condensed combined pro forma financial information set forth herein due to certain factors beyond the Company’s control.

 

 94 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)

  

   InCapta, Inc.   Inner Four, Inc.
Stimulating Software, LLC
and Celebrity Games, Inc.
   Pro Forma
Adjustments
   Pro Forma
Combined
 
   June 30, 2015   June 30, 2015   (Note 3)     
                 
ASSETS                    
                     
Current aasets:                    
Cash  $   $21,918   $   $21,918 
Accounts receivable       5,570        5,570 
                     
Total current assets       27,488        27,488 
                     
Other assets:                  
Furniture and equipment   5,285            5,285 
Apps   1,855,000            1,855,000 
Goodwill   6,139,826            6,139,826 
                    
Total other assets   8,000,111            8,000,111 
                     
Total assets  $8,000,111   $27,488       $8,027,599 

 

 95 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)

(continued)

 

    InCapta, Inc.     Inner Four, Inc.
Stimulating Software, LLC
and Celebrity Games, Inc.
    Pro Forma
Adjustments
    Pro Forma
Combined
 
    June 30, 2015     June 30, 2015     (Note 3)        
                         
LIABILITIES AND STOCKHOLDER’S  DEFICIT                                
                                 
Short term liabilities                                
Accounts payable   $ 211,955     $     $     $ 211,955  
Due to officers     6,950                   6,950  
Loans payable     30,833                   30,833  
                                 
Total short term liabilities     249,738                   249,738  
                                 
Total liabilities     249,738                   249,738  
                                 
Stockholders’ equity                                
Draw           (309,283 )     309,283  1      
Stockholder receivable      (111)                     (111 )
Common stock,  $0.001 par value     40,510       10       (10 ) 2     40,510  
Series B common Stock; $0.001 par value                        
Series A preferred Stock; $0.001 par value     4       1       (1 ) 2     4  
Series B preferred stock; $0.001 par value           100       (100 ) 2      
Series C preferred stock; $0.001 par value                        

 

 

 96 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

AND SUBSIDIARIES

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)

(continued)

 

   InCapta, Inc.   Inner Four, Inc.
Stimulating Software, LLC
and Celebrity Games, Inc.
   Pro Forma
Adjustments
   Pro Forma
Combined
 
   June 30, 2015   June 30, 2015   (Note 3)     
                 
Additional paid-in capital   82,158,647        27,599

 1

 2

 3

   82,186,246 
Accumulated deficit   (74,448,788)   336,771    (336,771) 3   (74,448,788)
                     
Total stockholders’ equity   7,750,373    27,488        7,777,861 
                     
Total liabilities and stockholders’ equity  $8,000,111   $27,488       $8,027,599 

 

(1)Adjust to eliminate draw.

 

(2)To eliminate subsidiaries stock issuances.

 

(3)To eliminate prior retained earnings.

 

See accompanying notes to unaudited condensed combined pro forma financial statements

 

 97 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)

 

       Inner Four, Inc.
and
         
   InCapta, Inc.   Stimulating
Software, LLC
   Pro Forma   Pro Forma 
   Six Months Ended   Six Months Ended   Adjustments   Combined 
   June 30, 2015   June 30, 2015   (Note 3)     
                 
Sales  $   $13,711   $   $13,711 
                     
Costs and expenses:                    
Selling and general corporate expenses   73,862    2,509        76,371 
                     
Operating income (loss)   (73,862)   11,202        (62,660)
                     
Interest income       2        2 
Other income                
                     
Income (loss) before income taxes   (73,862)   11,204        (62,658)
                     
Net income (loss)  $(73,862)  $11,204   $   $(62,658)

 

See accompanying notes to unaudited condensed combined pro forma financial statements

 

 98 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)

 

       Inner Four, Inc.
and
         
   InCapta, Inc.   Stimulating
Software, LLC
   Pro Forma   Pro Forma 
   Year Ended   Year Ended   Adjustments   Combined 
   December 31, 2014   December 31, 2014   (Note 3)     
                 
Sales  $   $15,230   $   $15,230 
                     
Costs and expenses:                    
Selling and general corporate expenses   3,629    1,019        4,648 
                     
 Operating income (loss)   (3,629)   14,211        10,582)
                     
 Interest income       8        8 
 Other income   3,100,290            3,100,290 
                     
 Income (loss) before income taxes   3,096,661    14,219        3,110,880 
                     
Net income (loss)  $3,096,661   $14,219   $   $3,110,880 

  

See accompanying notes to unaudited condensed combined pro forma financial statements

 

 99 

 

 

INCAPTA, INC.

(formerly known as TBC Global News Network, Inc.)

NOTES TO CONDENSED COMBINED

PRO FORMA FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1—DESCRIPTION OF TRANSACTION

 

On September 3, 2015, InCapta, Inc. (formerly known as TBC Global News Network, Inc.) (“Company”) completed an Acquisition Agreement under which the Company acquired all of the equity interests of Stimulating Software, LLC, a Florida limited liability company formed on November 5, 2014 (“Stimulating Software”), the acquisition of all the common stock of Inner Four, Inc., a Florida corporation formed on June 19, 2007 (“Inner Four”), and all of the common and preferred stock of Play Celebrity Games, Inc., a Delaware corporation formed on June 5, 2015 (“Play Celebrity”). This acquisition was accomplished through a payment by the Company of common stock and preferred stock.

 

NOTE 2—BASIS OF PRESENTATION

 

The unaudited condensed combined pro forma balance sheet and statement of operations have been prepared using the acquisition method of accounting under accounting principles generally accepted in the United States of America (“U.S. GAAP”). The acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing the unaudited condensed combined pro forma balance sheet and statement of operations. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a significant impact on the unaudited condensed combined pro forma balance sheet and statement of operations and the combined company’s future results of operations and financial position.

 

The unaudited condensed combined pro forma balance sheet for the six months ended June 30, 2015, and the statements of operations for the fiscal year ended December 31, 2014 and for the six months ended June 30, 2015 assumes that the acquisition of Inner Four and Stimulating Software took place on December 31, 2014. The unaudited condensed consolidated pro forma balance sheet as of June 30, 2015 combines the Company’s unaudited interim balance sheet at June 30, 2015 with the Inner Four, Stimulating Software and Play Celebrity unaudited balance sheets at June 30, 2015.

 

The unaudited condensed combined pro forma statement of operations for the year ended December 31, 2014 combines the Company’s audited consolidated statement of operations for the fiscal year ended December 31, 2014 with the Inner Four and Stimulating Software unaudited statements of operations for the year ended December 31, 2014. The unaudited condensed combined pro forma statement of operations for the six months ended June 30, 2015 combines the Company’s unaudited interim statement of operations for the six months ended June 30, 2015 with the Inner Four and Stimulating Software unaudited statements of operations for the six months ended June 30, 2015.

 

 100 

 

 

The condensed combined pro forma balance sheet and statement of operations have been prepared for informational purposes only and do not purport to be indicative of the actual results that would have been achieved by the Company or the combined Company for the periods presented or that will be achieved by the Company or the combined Company in the future.

 

The unaudited condensed combined pro forma balance sheet and statement of operations included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and certain note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations; however, management believes that the disclosures are adequate to make the information presented not misleading.

 

NOTE 3—UNAUDITED PRO FORMA ADJUSTMENTS TO CONDENSED COMBINED FINANCIAL STATEMENTS

 

The Company made following adjustments to its interim balance sheet statement as of June 30, 2015:

 

1.Eliminated draws of $309,283 to additional paid in capital.

 

2.Re-classed outstanding common stock, Series A preferred stock and Series B preferred stock to additional paid in capital of $(111).

 

3.Eliminated retained earnings of $(336,711) to additional paid in capital.

  

 101 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Company has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  InCapta, Inc.
     
Dated: November 3, 2015 By: /s/ John Fleming
  John Fleming, President  

 

Special Power of Attorney

 

The undersigned constitute and appoint John Fleming their true and lawful attorney-in-fact and agent with full power of substitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Form 10 registration statement, and to file the same with all exhibits thereto, and all documents in connection therewith, with the U.S. Securities and Exchange Commission, granting such attorney-in-fact the full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that such attorney-in-fact may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:

  

Signature   Title   Date
         
/s/ John Fleming   President/Chief Executive Officer/   November 3, 2015
John Fleming   Secretary/Treasurer/Director    
         
 102 

 

 

EXHIBIT INDEX

 

Number   Description
     
2.1   Agreement and Plan of Merger between the Company and Syconet.com, Inc., a Delaware corporation, dated December 1, 2001 (incorporated by reference to Exhibit 2.1 of the Form 10 filed on October 7, 2015).
     
2.2   Purchase and Sale Agreement between the Company, on the one hand, and Sterling Yacht Sales, Inc., Glenn W. McMachen, Sr., and Arlene McMachen, on the other hand, dated March 19, 2010 (incorporated by reference to Exhibit 2.2 of the Form 10 filed on October 7, 2015).
     
2.3   Acquisition Agreement between the Company, on the one hand, and John Fleming, John Swartz, Team AJ, LLC, and Chasin, LLC, on the other hand, dated September 3, 2015 (including Exhibit A (Option); Exhibit B-1 (Stock Option Agreement); Exhibit B-2 (Stock Option Agreement); Exhibit C (Amended Certificate of Designation); Exhibit D (Design and License Agreement); Exhibit E (Registration Rights Agreement); Schedule 1.3 (Excluded Assets); Schedule 2.1 (Excluded Applications); Schedule 4.6 (Capitalization of GameCo. Companies); Schedule 4.10 (Assets of GameCo. Companies); Schedule 4.13 (Material Contracts of GameCo. Companies); Schedule 4.16 (Employees and Compensation Plans); Schedule 5.6 (Capitalization of Play Celebrity); Schedule 5.10 (All Assets, Tangible and Intangible, of Play Celebrity); Schedule 5.13 (Material Contracts); Schedule 5.16 (Employees and Compensation Plans); Schedule 6.8(a); Schedule 6.8(b); Schedule 6.8(c); Schedule 6.11 (All Assets, Tangible and Intangible, of InCapta); Schedule 6.13 (Material Contracts); Schedule 6.16 (Employees and Compensation Plans) (incorporated by reference to Exhibit 2.3 of the Form 10 filed on October 7, 2015).
     
3.1   Articles of Incorporation, dated December 19, 2001 (incorporated by reference to Exhibit 3.1 of the Form 10 filed on October 7, 2015).
     
3.2   Certificate of Amendment to Articles of Incorporation, dated November 21, 2002 (incorporated by reference to Exhibit 3.2 of the Form 10 filed on October 7, 2015).
     
3.3   Certificate of Amendment to Articles of Incorporation, dated March 5, 2003 (incorporated by reference to Exhibit 3.3 of the Form 10 filed on October 7, 2015).
     
3.4   Certificate of Amendment to Articles of Incorporation, dated July 11, 2003 (incorporated by reference to Exhibit 3.4 of the Form 10 filed on October 7, 2015).

 

 103 

 

 

3.5   Certificate of Amendment to Articles of Incorporation, dated January 26, 2004(incorporated by reference to Exhibit 3.5 of the Form 10 filed on October 7, 2015).
     
3.6   Certificate of Amendment to Articles of Incorporation, dated December 16, 2004 (incorporated by reference to Exhibit 3.6 of the Form 10 filed on October 7, 2015).
     
3.7   Certificate of Amendment to Articles of Incorporation, dated July 19, 2005 (incorporated by reference to Exhibit 3.7 of the Form 10 filed on October 7, 2015).
     
3.8   Certificate of Amendment to Articles of Incorporation, dated March 21, 2006 (incorporated by reference to Exhibit 3.8 of the Form 10 filed on October 7, 2015).
     
3.9   Certificate of Amendment to Articles of Incorporation, dated December 10, 2007 (incorporated by reference to Exhibit 3.9 of the Form 10 filed on October 7, 2015).
     
3.10   Certificate of Amendment to Articles of Incorporation, dated May 7, 2009 (incorporated by reference to Exhibit 3.10 of the Form 10 filed on October 7, 2015).
     
3.11   Certificate of Amendment to Articles of Incorporation, dated October 21, 2015 (filed herewith).
     
3.12   Bylaws (incorporated by reference to Exhibit 3.11 of the Form 10 filed on October 7, 2015).
     
4.1   Certificate of Designation (Series A Convertible Preferred Stock), dated April 23, 2008 (incorporated by reference to Exhibit 4.1 of the Form 10 filed on October 7, 2015).
     
4.2   Amended Certificate of Designation (Series A Convertible Preferred Stock), dated September 9, 2015 (incorporated by reference to Exhibit C of Exhibit 2.3 of the Form 10 filed on October 7, 2015).
     
10.1   Promissory Note issued by the Company to Peter Lambert, dated March 17, 2015 (incorporated by reference to Exhibit 10.1 of the Form 10 filed on October 7, 2015).
     
10.2   First Amendment to Promissory Note issued by the Company to Peter Lambert, dated June 12, 2015 (incorporated by reference to Exhibit 10.2 of the Form 10 filed on October 7, 2015).

 

 104 

 

 

10.3   Developer Agreement between Inner Four, Inc., Stimulating Software, LLC and Play Celebrity, Inc., and Apple, Inc., dated December 15, 2008 (Inner Four), November 7, 2014 (Stimulating Software), and October 12, 2015 (Play Celebrity) (filed herewith).
     
10.4   Developer Distribution Agreement between Inner Four, Inc. and Stimulating Software, LLC, and Google, Inc., dated December 15, 2008 (Inner Four) and November 7, 2014 (Stimulating Software) (filed herewith).
     
10.5   App Distribution and Services Agreement between Inner Four, Inc.  and Stimulating Software, LLC, and Amazon Digital Services, Inc., Amazon Media EU S.a.r.l., Amazon Services International, Inc., Amazon Servicos de Varejo do Brasil Ltda., Amazon.com Int’l Sales, Inc., and Amazon Australia Services, Inc., dated December 15, 2008 (Inner Four) and November 7, 2014 (Stimulating Software) (filed herewith).

 

 105 

EX-3.11 2 v423719_ex3-11.htm EXHIBIT 3.11

 

Exhibit 3.11

 

CERTIFICATE OF AMENDMENT TO

ARTICLES OF INCORPORATION

FOR NEVADA PROFIT CORPORATION

(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)

  

1. Name of corporation: TBC Global News Network, Inc.

 

2. The articles have been amended as follows (provide article numbers, if available):

 

Article 1:

 

“The name of this corporation is: “InCapta, Inc.”

 

3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is: 31,969,665.

 

4.  Effective date of filing (optional): October 22, 2015.  
  (must not be later than 90 days after the certificate is filed)

 

5.  Officer Signature (required):  /s/  John Fleming  
  John Fleming, CEO

 

October 21, 2015.

 

 

EX-10.3 3 v423719_ex10-3.htm EXHIBIT 10.3

 

Exhibit 10.3

 

THIS IS A LEGAL AGREEMENT BETWEEN YOU AND APPLE INC. (“APPLE”) STATING THE TERMS THAT GOVERN YOUR PARTICIPATION AS AN APPLE DEVELOPER. PLEASE READ THIS APPLE DEVELOPER AGREEMENT (“AGREEMENT”) BEFORE PRESSING THE “AGREE” BUTTON AND CHECKING THE BOX AT THE BOTTOM OF THIS PAGE. BY PRESSING “AGREE,” YOU ARE AGREEING TO BE BOUND BY THE TERMS OF THIS AGREEMENT. IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, PRESS “CANCEL”.

 

APPLE DEVELOPER AGREEMENT

 

1.         Relationship With Apple; Apple ID and Password. You understand and agree that by registering with Apple to become an Apple Developer (“Apple Developer”), no legal partnership or agency relationship is created between you and Apple. You agree not to represent otherwise. You also certify that you are at least thirteen years of age and you represent that you are legally permitted to register as an Apple Developer. This Agreement is void where prohibited by law and the right to register as an Apple Developer is not granted in such jurisdictions. Unless otherwise agreed or permitted by Apple in writing, you cannot share or transfer any benefits you receive from Apple in connection with being an Apple Developer. The Apple ID and password you use to log into your Apple Developer account cannot be shared in any way or with anyone. You are responsible for maintaining the confidentiality of your Apple ID and password and for any activity in connection with your account.

 

2.         Developer Benefits. As an Apple Developer, you may have the opportunity to attend certain Apple developer conferences, technical talks, and other events (including online or electronic broadcasts of such events) (“Apple Events”). In addition, Apple may offer to provide you with certain services (“Services”), as described more fully herein and on the Apple Developer web pages (“Site”), solely for your own use in connection with your participation as an Apple Developer. Services may include, but not be limited to, any services Apple offers at Apple Events or on the Site as well as the offering of any content or materials displayed on the Site (“Content”). Apple may change, suspend or discontinue providing the Services, Site and Content to you at any time, and may impose limits on certain features and materials offered or restrict your access to parts or all of such materials without notice or liability.

 

 1 

 

 

3.         Restrictions. You agree not to exploit the Site, or any Services, Apple Events or Content provided to you by Apple as an Apple Developer, in any unauthorized way, including but not limited to, by trespass, burdening network capacity or using the Services, Site or Content other than for authorized purposes. Copyright and other intellectual property laws protect the Site and Content provided to you, and you agree to abide by and maintain all notices, license information, and restrictions contained therein. Unless expressly permitted herein or otherwise permitted in a separate agreement with Apple, you may not modify, publish, network, rent, lease, loan, transmit, sell, participate in the transfer or sale of, reproduce, create derivative works based on, redistribute, perform, display, or in any way exploit any of the Site, Content or Services. You may not decompile, reverse engineer, disassemble, or attempt to derive the source code of any software or security components of the Services, Site, or Content (except as and only to the extent any foregoing restriction is prohibited by applicable law or to the extent as may be permitted by any licensing terms accompanying the foregoing). Use of the Site, Content or Services to violate, tamper with, or circumvent the security of any computer network, software, passwords, encryption codes, technological protection measures, or to otherwise engage in any kind of illegal activity, or to enable others to do so, is expressly prohibited. Apple retains ownership of all its rights in the Site, Content, Apple Events and Services, and except as expressly set forth herein, no other rights or licenses are granted or to be implied under any Apple intellectual property.

 

4.         Confidentiality. Except as otherwise set forth herein, you agree that any Apple prerelease software, services, and/or hardware (including related documentation and materials) provided to you as an Apple Developer (“Pre-Release Materials”) and any information disclosed by Apple to you in connection with Apple Events will be considered and referred to as “Apple Confidential Information”.

 

Notwithstanding the foregoing, Apple Confidential Information will not include: (a) information that is generally and legitimately available to the public through no fault or breach of yours; (b) information that is generally made available to the public by Apple; (c) information that is independently developed by you without the use of any Apple Confidential Information; (d) information that was rightfully obtained from a third party who had the right to transfer or disclose it to you without limitation; or (e) any third party software and/or documentation provided to you by Apple and accompanied by licensing terms that do not impose confidentiality obligations on the use or disclosure of such software and/or documentation. Further, Apple agrees that you will not be bound by the foregoing confidentiality terms with regard to technical information about Apple prerelease software, services and/or hardware disclosed by Apple at WWDC (Apple’s Worldwide Developers Conference), except that you may not post screen shots of, write public reviews of, or redistribute any such materials.

 

 2 

 

 

5.         Nondisclosure and Nonuse of Apple Confidential Information. Unless otherwise expressly agreed or permitted in writing by Apple, you agree not to disclose, publish, or disseminate any Apple Confidential Information to anyone other than to other Apple Developers who are employees and contractors working for the same entity as you and then only to the extent that Apple does not otherwise prohibit such disclosure. Except for your authorized purposes as an Apple Developer or as otherwise expressly agreed or permitted by Apple in writing, you agree not to use Apple Confidential Information in any way, including, without limitation, for your own or any third party’s benefit without the prior written approval of an authorized representative of Apple in each instance. You further agree to take reasonable precautions to prevent any unauthorized use, disclosure, publication, or dissemination of Apple Confidential Information. You acknowledge that unauthorized disclosure or use of Apple Confidential Information could cause irreparable harm and significant injury to Apple that may be difficult to ascertain. Accordingly, you agree that Apple will have the right to seek immediate injunctive relief to enforce your obligations under this Agreement in addition to any other rights and remedies it may have. If you are required by law, regulation or pursuant to the valid binding order of a court of competent jurisdiction to disclose Apple

 

Confidential Information, you may make such disclosure, but only if you have notified Apple before making such disclosure and have used commercially reasonable efforts to limit the disclosure and to seek confidential, protective treatment of such information. A disclosure pursuant to the previous sentence will not relieve you of your obligations to hold such information as Apple Confidential Information.

 

6.         Confidential Pre-Release Materials License and Restrictions. If Apple provides you with Pre-Release Materials, then subject to your compliance with the terms and conditions of this Agreement, Apple hereby grants you a nonexclusive, nontransferable, right and license to use the Pre-Release Materials only for the limited purposes set forth in this Section 6; provided however that if such Pre-Release Materials are subject to a separate license agreement, you agree that the license agreement accompanying such materials in addition to Sections 4 and 5 of this Agreement shall also govern your use of the Pre-Release Materials. You further agree that in the event of any inconsistency between Section 4 and 5 of this Agreement and the confidentiality restrictions in the license agreement, the license agreement shall govern. You agree not to use the Pre-Release Materials for any purpose other than testing and/or development by you of a product designed to operate in combination with the same operating system for which the Pre-Release Materials are designed. This Agreement does not grant you any right or license to incorporate or make use of any Apple intellectual property (including for example and without limitation, trade secrets, patents, copyrights, trademarks and industrial designs) in any product. Except as expressly set forth herein, no other rights or licenses are granted or to be implied under any Apple intellectual property. You agree not to decompile, reverse engineer, disassemble, or otherwise reduce the Pre-Release Materials to a human-perceivable form, and you will not modify, network, rent, lease, transmit, sell, or loan the Pre-Release Materials in whole or in part.

 

7.         Developer Content License and Restrictions. As an Apple Developer, you may have access to certain proprietary content (including, without limitation, video presentations and audio recordings) that Apple may make available to you from time to time (“Content”). Content shall be considered Apple Confidential Information, unless otherwise agreed or permitted in writing by Apple. You may not share the Content with anyone, including, without limitation, employees and contractors working for the same entity as you, regardless of whether they are Apple Developers, unless otherwise expressly permitted by Apple. Subject to these terms and conditions, Apple grants you a personal and nontransferable license to access and use the Content for authorized purposes as an Apple Developer; provided that you may only download one (1) copy of the Content and such download must be completed within the time period specified by Apple for such download. Except as expressly permitted by Apple, you shall not modify, translate, reproduce, distribute, or create derivative works of the Content or any part thereof. You shall not rent, lease, loan, sell, sublicense, assign or otherwise transfer any rights in the Content. Apple and/or Apple’s licensor(s) retain ownership of the Content itself and any copies or portions thereof. The Content is licensed, not sold, to you by Apple for use only under this Agreement, and Apple reserves all rights not expressly granted to you. Your rights under this license to use and access the Content will terminate automatically without notice from Apple if you fail to comply with any of these provisions.

 

 3 

 

 

8.         Compatibility Labs; Developer Technical Support (DTS). As an Apple Developer, you may have access to Apple’s software and/or hardware compatibility testing and development labs (“Labs”) and/or developer technical support incidents (“DTS Services”) that Apple may make available to you from time to time as an Apple developer benefit or for a separate fee. You agree that all use of such Labs and DTS Services will be in accordance with Apple’s usage policies for such services, which are subject to change from time to time, with or without prior notice to you. Without limiting the foregoing, Apple may post on the Site and/or send an email to you with notices of such changes. It is your responsibility to review the Site and/or check your email address registered with Apple for any such notices. You agree that Apple shall not be liable to you or any third party for any modification or cessation of such services. As part of the DTS Services, Apple may supply you with certain code snippets, sample code, software, and other materials (“Materials”). You agree that any Materials that Apple provides as part of the DTS Services are licensed to you and shall be used by you only in accordance with the terms and conditions accompanying the Materials. Apple retains ownership of all of its right, title and interest in such Materials and no other rights or licenses are granted or to be implied under any Apple intellectual property. You have no right to copy, decompile, reverse engineer, sublicense or otherwise distribute such Materials, except as may be expressly provided in the terms and conditions accompanying the Materials.

 

YOU AGREE THAT WHEN REQUESTING AND RECEIVING TECHNICAL SUPPORT FROM DTS SERVICES, YOU WILL NOT PROVIDE APPLE WITH ANY INFORMATION, INCLUDING THAT INCORPORATED IN YOUR SOFTWARE, THAT IS CONFIDENTIAL TO YOU OR ANY THIRD PARTY. YOU AGREE THAT ANY NOTICE, LEGEND, OR LABEL TO THE CONTRARY CONTAINED IN ANY SUCH MATERIALS PROVIDED BY YOU TO APPLE SHALL BE WITHOUT EFFECT. APPLE SHALL BE FREE TO USE ALL SUCH INFORMATION IT RECEIVES FROM YOU IN ANY MANNER IT DEEMS APPROPRIATE, SUBJECT TO ANY APPLICABLE PATENTS OR COPYRIGHTS.

 

Apple reserves the right to reject a request for access to Labs or for DTS Services at any time and for any reason, in which event Apple may credit you for the rejected lab or support request. You shall be solely responsible for any restoration of lost or altered files, data, programs or other materials provided.

 

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9.         Amendment; Communication. Apple reserves the right, at its discretion, to modify this Agreement, including any rules and policies at any time. You will be responsible for reviewing and becoming familiar with any such modifications (including new terms, updates, revisions, supplements, modifications, and additional rules, policies, terms and conditions)(“Additional Terms”) communicated to you by Apple. All Additional Terms are hereby incorporated into this Agreement by this reference and your continued use of the Site will indicate your acceptance of any Additional Terms. In addition, Apple may be sending communications to you from time to time. Such communications may be in the form of phone calls and/or emails and may include, but not be limited to, membership information, marketing materials, technical information, and updates and/or changes regarding your participation as an Apple Developer. By agreeing to this Agreement, you consent that Apple may provide you with such communications.

 

10.         Term and Termination. Apple may terminate or suspend you as a registered Apple Developer at any time in Apple’s sole discretion. If Apple terminates you as a registered Apple Developer, Apple reserves the right to deny your reapplication at any time in Apple’s sole discretion. You may terminate your participation as a registered Apple Developer at any time, for any reason, by notifying Apple in writing of your intent to do so. Upon any termination or, at Apple’s discretion, suspension, all rights and licenses granted to you by Apple will cease, including your right to access the Site, and you agree to destroy any and all Apple Confidential Information that is in your possession or control. At Apple’s request, you agree to provide certification of such destruction to Apple. No refund or partial refund of any fees paid hereunder or any other fees will be made for any reason. Following termination of this Agreement, Sections 1, 3-5, 7 (but only for so long as the duration specified by Apple for such usage), 10-19 shall continue to bind the parties.

 

11.         Apple Independent Development. Nothing in this Agreement will impair Apple’s right to develop, acquire, license, market, promote or distribute products, software or technologies that perform the same or similar functions as, or otherwise compete with, any other products, software or technologies that you may develop, produce, market, or distribute. In the absence of a separate written agreement to the contrary, Apple will be free to use any information, suggestions or recommendations you provide to Apple pursuant to this Agreement for any purpose, subject to any applicable patents or copyrights.

 

12.         Use Of Apple Trademarks, Logos, etc. You agree to follow Apple’s trademark and copyright guidelines as published at: www.apple.com/legal/guidelinesfor3rdparties.html (“Guidelines”) and as may be modified from time to time. You agree not to use the marks “Apple,” the Apple Logo, “Mac”, “iPhone,” “iPod touch” or any other marks belonging or licensed to Apple in any way except as expressly authorized in writing by Apple in each instance or as permitted in Apple’s Guidelines. You agree that all goodwill arising out of your authorized use of Apple’s marks shall inure to the benefit of and belong to Apple.

 

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13.         No Warranty. APPLE AND ITS AFFILIATES, SUBSIDIARIES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, PARTNERS, AND LICENSORS (COLLECTIVELY, “APPLE” FOR PURPOSES OF THIS SECTION 13 AND 14) DO NOT PROMISE THAT THE SITE, CONTENT, SERVICES (INCLUDING, FUNCTIONALITY OR FEATURES OF THE FOREGOING), LABS, DTS SERVICES, OR ANY OTHER INFORMATION OR MATERIALS THAT YOU RECEIVE HEREUNDER AS AN APPLE DEVELOPER (COLLECTIVELY, THE “SERVICE” FOR PURPOSES OF THIS SECTION 13 AND 14) WILL BE ACCURATE, RELIABLE, TIMELY, SECURE, ERRORFREE OR UNINTERRUPTED, OR THAT ANY DEFECTS WILL BE CORRECTED. THE SERVICE IS PROVIDED ON AN “AS-IS” AND “AS-AVAILABLE” BASIS AND THE SERVICE IS SUBJECT TO CHANGE WITHOUT NOTICE. APPLE CANNOT ENSURE THAT ANY CONTENT (INCLUDING FILES, INFORMATION OR OTHER DATA) YOU ACCESS OR DOWNLOAD FROM THE SERVICE WILL BE FREE OF VIRUSES, CONTAMINATION OR DESTRUCTIVE FEATURES. FURTHER, APPLE DOES NOT GUARANTEE ANY RESULTS OR IDENTIFICATION OR CORRECTION OF PROBLEMS AS PART OF THE SERVICE AND APPLE DISCLAIMS ANY LIABILITY RELATED THERETO. APPLE DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF ACCURACY, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. APPLE DISCLAIMS ANY AND ALL LIABILITY FOR THE ACTS, OMISSIONS AND CONDUCT OF ANY THIRD PARTIES IN CONNECTION WITH OR RELATED TO YOUR USE OF THE SERVICE. YOU ASSUME TOTAL RESPONSIBILITY AND ALL RISKS FOR YOUR USE OF THE SERVICE, INCLUDING, BUT NOT LIMITED TO, ANY INFORMATION OBTAINED THEREON. YOUR SOLE REMEDY AGAINST APPLE FOR DISSATISFACTION WITH THE SERVICE IS TO STOP USING THE SERVICE. THIS LIMITATION OF RELIEF IS A PART OF THE BARGAIN BETWEEN THE PARTIES. TO THE EXTENT THAT APPLE MAKES ANY PRE-RELEASE SOFTWARE, HARDWARE OR OTHER PRODUCTS, SERVICES OR INFORMATION RELATED THERETO AVAILABLE TO YOU AS AN APPLE DEVELOPER, YOU UNDERSTAND THAT APPLE IS UNDER NO OBLIGATION TO PROVIDE UPDATES, ENHANCEMENTS, OR CORRECTIONS, OR TO NOTIFY YOU OF ANY PRODUCT OR SERVICES CHANGES THAT APPLE MAY MAKE, OR TO PUBLICLY ANNOUNCE OR INTRODUCE THE PRODUCT(S) OR SERVICE AT ANY TIME IN THE FUTURE.

 

14.          Disclaimer of Liability. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, IN NO EVENT WILL APPLE BE LIABLE FOR PERSONAL INJURY, OR ANY INCIDENTAL, SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, INCLUDING, WITHOUT LIMITATION, DAMAGES RESULTING FROM DELAY OF DELIVERY, FOR LOSS OF PROFITS, DATA, BUSINESS OR GOODWILL, FOR BUSINESS INTERRUPTION OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR YOUR USE OR INABILITY TO USE THE SERVICE, HOWEVER CAUSED, WHETHER UNDER A THEORY OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCTS LIABILITY, OR OTHERWISE, EVEN IF APPLE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY. IN NO EVENT SHALL APPLE’S TOTAL LIABILITY TO YOU UNDER THIS AGREEMENT FOR ALL DAMAGES (OTHER THAN AS MAY BE REQUIRED BY APPLICABLE LAW IN CASES INVOLVING PERSONAL INJURY) EXCEED THE AMOUNT OF FIFTY DOLLARS ($50.00).

 

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15.         Third-Party Notices and Products. Third-party software provided by Apple to you as an Apple Developer may be accompanied by its own licensing terms, in which case such licensing terms will govern your use of that particular third-party software. Mention of third parties and third party products in any materials, documentation, advertising, or promotions provided to you as an Apple Developer is for informational purposes only and constitutes neither an endorsement nor a recommendation. All third-party product specifications and descriptions are supplied by the respective vendor or supplier, and Apple shall have no responsibility with regard to the selection, performance, or use of these vendors or products. All understandings, agreements, or warranties, if any, take place directly between the vendors and the prospective users.

 

16.         Export Control. You may not use or otherwise export or re-export any Apple Confidential Information received from Apple except as authorized by United States law and the laws of the jurisdiction in which the Apple Confidential Information was obtained. In particular, but without limitation, the Apple Confidential Information may not be exported or re-exported (a) into any U.S. embargoed countries or (b) to anyone on the U.S. Treasury Department's list of Specially Designated Nationals or the U.S. Department of Commerce Denied Person's List or Entity List or any other restricted party lists. By becoming an Apple Developer or using any Apple Confidential Information, you represent and warrant that you are not located in any such country or on any such list. You also agree that you will not use any Apple Confidential Information for any purposes prohibited by United States law, including, without limitation, the development, design, manufacture or production of nuclear, chemical or biological weapons.

 

17.         Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, excluding its conflict of law provisions. The parties further submit to and waive any objections to personal jurisdiction of and venue in any of the following forums: U.S. District Court for the Northern District of California, California Superior Court for Santa Clara County, Santa Clara County Municipal Court, or any other forum in Santa Clara County, for any disputes arising out of this Agreement.

 

18.         Government End Users. Certain Apple Confidential Information may be considered “Commercial Items”, as that term is defined at 48 C.F.R. §2.101, consisting of “Commercial Computer Software” and “Commercial Computer Software Documentation”, as such terms are used in 48 C.F.R. §12.212 or 48 C.F.R. §227.7202, as applicable. Consistent with 48 C.F.R. §12.212 or 48 C.F.R. §227.7202-1 through 227.7202-4, as applicable, the Commercial Computer Software and Commercial Computer Software Documentation are being licensed to U.S. Government end users (a) only as Commercial Items and (b) with only those rights as are granted to all other end users pursuant to the terms and conditions herein. Unpublished-rights reserved under the copyright laws of the United States.

 

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19.         Miscellaneous. No delay or failure to take action under this Agreement will constitute a waiver unless expressly waived in writing, signed by a duly authorized representative of Apple, and no single waiver will constitute a continuing or subsequent waiver. This Agreement will bind your successors but may not be assigned, in whole or part, by you without the written approval of an authorized representative of Apple. Any non-conforming assignment shall be null and void. If any provision is found to be unenforceable or invalid, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous understandings regarding such subject matter. No addition to or removal or modification of any of the provisions of this Agreement will be binding upon Apple unless made in writing and signed by an authorized representative of Apple. The parties hereto confirm that they have requested that this Agreement and all attachments and related documents be drafted in English.

 

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EX-10.4 4 v423719_ex10-4.htm EXHIBIT 10.4

 

Exhibit 10.4

 

GOOGLE PLAY DEVELOPER DISTRIBUTION AGREEMENT

 

Last modified: May 5, 2015

 

Definitions

 

Authorized Carrier: A mobile network operator who is authorized to receive a distribution fee for Products that are sold to users of Devices on its network.

 

Brand Features: the trade names, trademarks, service marks, logos, domain names, and other distinctive brand features of each party, respectively, as owned (or licensed) by such party from time to time.

 

Developer or You: Any person or company who is registered and approved by the Store to distribute Products in accordance with the terms of this Agreement.

 

Developer Account: A publishing account issued to Developers that enables the distribution of Products via the Store.

 

Developer Console: The console or other online tool provided by Google to developers to manage the distribution of Products and related administrative functions.

 

Device: Any device that can access the Store, as defined herein.

 

Google: Google Inc., a Delaware corporation with principal place of business at 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States; Google Ireland Limited, a company incorporated in Ireland with principal place of business at Gordon House, Barrow Street, Dublin 4, Ireland; Google Commerce Limited, a company incorporated in Ireland with principal place of business at Gordon House, Barrow Street, Dublin 4, Ireland; and Google Asia Pacific Pte. Limited, a company incorporated in Singapore with principal place of business at 8 Marina View, Asia Square 1 #30-01, Singapore 018960.

 

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Payment Account: A financial account issued by a Payment Processor to a Developer that authorizes the Payment Processor to collect and remit payments on the Developer's behalf for Products sold via the Store. Developers must be approved by a Payment Processor for a Payment Account and maintain their account in good standing to charge for Products distributed in the Store.

 

Payment Processor(s): As specified and designated in, a party authorized by Google to provide services that enable Developers with Payment Accounts to charge users for Products distributed via the Store.

 

Products: Software, content and digital materials distributed via the Store.

 

Store: The marketplace Google has created and operates which allows registered Developers in certain countries to distribute Products directly to users of Devices.

 

1.Introduction

 

1.1           The Store is a publicly available site where Developers can distribute Products for Devices. In order to distribute Products on the Store, you must acquire and maintain a valid Developer Account.

 

1.2           If you want to charge a fee for your Products, you must also acquire and maintain a valid Payment Account from an authorized Payment Processor.

 

2.Accepting this Agreement

 

2.1           This agreement ("Agreement") forms a legally binding contract between you and Google in relation to your use of the Store to distribute Products. You acknowledge that Google will, solely on your behalf, and not on Google’s behalf, display and make Products available for download and purchase by users. In order to use the Store to distribute Products, you must accept this Agreement and provide complete and accurate information in the Developer Console. You may not distribute Products on the Store if you do not accept this Agreement.

 

2.2           You may not use the Store to distribute Products and may not accept the Agreement unless you are verified as a Developer in good standing. This Agreement will automatically terminate if you are (a) not a Developer in good standing, or (b) a person or entity barred from using Android software under the laws of the United States or other countries including the country in which you are resident or from which you use the Android software.

 

2.3           If you are agreeing to be bound by this Agreement on behalf of your employer or other entity, you represent and warrant that you have full legal authority to bind your employer or such entity to this Agreement. If you do not have the requisite authority, you may not accept the Agreement or use the Store on behalf of your employer or other entity.

 

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3.Pricing and Payments.

 

3.1           This Agreement covers both Products you choose to distribute for free and Products for which you charge a fee. In order to charge a fee for your Products, you must have a valid Payment Account under a separate agreement with a Payment Processor. If you have an existing Payment Account with a Payment Processor before signing up for the Store, then the terms of that agreement will apply except in the event of a conflict with this Agreement (in which case the terms of this Agreement shall apply).

 

3.2           Products are displayed to users on your behalf, at prices you establish in your sole discretion. Google may include applicable taxes in the price charged to users on the Store. You may set the price for your Products in the currencies permitted by the Payment Processor. Google may display the price of Products to users in their native currency, but it is not responsible for the accuracy of currency rates or currency conversion

 

3.3           You are the merchant of record for Products you sell through the Store. For a given transaction, you are contracting with the applicable Google entity based on where you have selected to distribute your Product. The price you set for Products will determine the amount of payment you will receive. A Transaction Fee, as defined below, will be charged on the sales price and apportioned to the Payment Processor and, if one exists, the Authorized Carrier. Where either Google, the Payment Processor or the Authorized Carrier are required by applicable (local) legislation to withhold any taxes ("Withholding Taxes") on payments made or received by anyone of them, Google will also deduct an amount equal to such Withholding Taxes from the sales price. For the avoidance of doubt, Withholding Taxes include, but are not limited to, withholding tax obligations on cross-border payments or imposed by telecommunications taxes. The remainder (sales price less Transaction Fee, and less the amount equal to any Withholding Taxes) will be remitted to you. The "Transaction Fee" is set forth and may be revised by Google from time to time. You are responsible for providing any applicable tax residency certificates to Google. If Google or its service provider does not receive such documentation, Google will withhold at the domestic withholding tax rate.

 

3.4           Developer is responsible for determining if a Product is taxable and the applicable tax rate for the Payment Processor to collect for each taxing jurisdiction where Products are sold. Developer is responsible for remitting taxes to the appropriate taxing authority. Where Google, the Payment Processor or the Authorized Carrier is required by applicable (local) legislation to determine, apply and pay the applicable tax rate, Google, the Payment Processor or the Authorized Carrier (and not Developer) will be responsible for applying and collecting and remitting the taxes to the appropriate taxing authority. If Google collects and remits value added taxes on customer payments (where required of Google by applicable local law) and this remittance fulfils the applicable requirements for value added taxes on those customer payments, such taxes will not be passed on to Developer by Google. Where Google is required to collect and remit taxes as described in this section, Developer and Google will recognize a supply from Developer to Google for tax purposes, and developer will comply with the relevant tax obligations arising from this additional supply.

 

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3.5           You may also choose to distribute Products for free. If the Product is free, you will not be charged a Transaction Fee. You may not start charging a user for a Product that was initially free unless the charge correlates with an alternative version of the Product. The Payment Processor must process all fees a Developer receives for any version of a Product distributed via the Store.

 

3.6           You Support Your Product. Buyers are instructed to contact the developer concerning any defects or performance issues in applications downloaded and installed from Google Play. You will be solely responsible for, and Google will have no responsibility to undertake or handle support and maintenance of your Products and any complaints about your Products. You must supply and maintain valid and accurate contact information that will be displayed in each application detail page on the Store and made available to users for customer support and legal purposes. For paid Products or in-app transactions, you must respond to customer support inquiries within three (3) business days, and within 24 hours to any support or Product concerns stated to be urgent by Google. Failure to provide adequate information or support for your Products may result in low Product ratings, less prominent product exposure, low sales, billing disputes, or removal from the Store.

 

3.7           Authority to Refund. You authorize Google to give the buyer a full refund of the price of a Product or in-app transaction on your behalf if the buyer requests the refund at any time within 48 hours after purchase. In all other respects, the Payment Processor’s standard terms and conditions regarding refunds will apply. User refunds may be exclusive of taxes previously charged to users for Product purchases. Except in cases when multiple disputes are initiated by a user, billing disputes for Products sold for less than $10, and any handling fees charged by the Payment Processor, may be automatically charged back to the Developer except in cases when Google determines in its sole discretion that the user initiating the dispute has an abnormal dispute history. Chargeback requests for Products $10 or more will be handled in accordance with the Payment Processor's standard policy.

 

3.8           Reinstalls. Users are allowed unlimited reinstalls of each Product distributed via the Store, provided however that if you remove a Product(s) from the Store pursuant to clauses (i), (ii), (iii) or (iv) of Section 7.1, such Product(s) shall be removed from all portions of the Store and users shall no longer have a right or ability to reinstall the affected Products.

 

4.Use of the Store by You.

 

4.1           Except for the license rights granted by you in Section 5 below, Google agrees that it obtains no right, title or interest from you (or your licensors) under this Agreement in or to any of Products, including any intellectual property rights which subsist in those Products.

 

4.2           You agree to use the Store only for purposes that are permitted by (a) this Agreement and (b) any applicable law, regulation or generally accepted practices or guidelines in the relevant jurisdictions (including any laws regarding the export of data or software to and from the United States or other relevant countries).

 

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4.3           You agree that if you use the Store to distribute Products, you will protect the privacy and legal rights of users. If the users provide you with, or your Product accesses or uses, user names, passwords, or other login information or personal information, you must make the users aware that the information will be available to your Product, and you must provide legally adequate privacy notice and protection for those users. Further, your Product may only use that information for the limited purposes for which the user has given you permission to do so. If your Product stores personal or sensitive information provided by users, it must do so securely and only for as long as it is needed. But if the user has opted into a separate agreement with you that allows you or your Product to store or use personal or sensitive information directly related to your Product (not including other products or applications) then the terms of that separate agreement will govern your use of such information. If the user provides your Product with Google Account information, your Product may only use that information to access the user's Google Account when, and for the limited purposes for which, the user has given you permission to do so.

 

4.4           Prohibited Actions. You agree that you will not engage in any activity with the Store, including the development or distribution of Products, that interferes with, disrupts, damages, or accesses in an unauthorized manner the devices, servers, networks, or other properties or services of any third party including, but not limited to, Android users, Google or any mobile network operator. You may not use customer information obtained from the Store to sell or distribute Products outside of the Store.

 

4.5           Alternative Stores. You may not use the Store to distribute or make available any Product which has a purpose that facilitates the distribution of software applications and games for use on Android devices outside of the Store.

 

4.6           You agree that you are solely responsible for (and that Google has no responsibility to you or to any third party for) any Products you distribute through the Store including use of any Google Play APIs and for the consequences of your actions (including any loss or damage which Google may suffer) by doing so. These consequences include, but are not limited to, product liability, consumer protection, and/or intellectual property claims relating to your products.

 

4.7           You agree that you are solely responsible for (and that Google has no responsibility to you or to any third party for) any breach of your obligations under this Agreement, any applicable third party contract or terms of service, or any applicable law or regulation, and for the consequences (including any loss or damage which Google or any third party may suffer) of any such breach.

 

4.8           Product Ratings. The Store will allow users to rate and review Products. Only users who download the applicable Product will be able to rate and review it on the Store. Product ratings may be used to determine the placement of Products on the Store, subject to Google's ability to change placement at Google's sole discretion. The Store may also assign you a composite score for any Product that has not received user ratings. A Developer Composite Score will be a representation of the quality of your Product based on your history and will be determined at Google's sole discretion. For new Developers without Product history, Google may use or publish performance measurements such as uninstall and/or refund rates to identify or remove Products that are not meeting acceptable standards, as determined by Google. Google reserves the right to display Products to users in a manner that will be determined at Google's sole discretion.

 

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Your Products may be subject to user ratings to which you may not agree.

 

4.9           Marketing Your Product. You will be responsible for uploading your Products to the Store, providing required Product information and support to users, and accurately disclosing the security permissions necessary for the Product to function on user Devices. Products that are not uploaded in accordance with this clause will not be published in the Store.

 

4.10         Restricted Content. Any Product you distribute on the Store must adhere to

 

5.License Grants.

 

5.1           You grant to Google a nonexclusive, worldwide, and royalty-free license to: reproduce, perform, display, and use the Products for administrative and demonstration purposes in connection with (i) the operation and marketing of the Store; (ii) the marketing of devices and services that support the use of the Products, and (iii) making improvements to the Android platform.

 

5.2           You grant to Google a non-exclusive, and royalty-free license to distribute the Products in the manner indicated in the Developer Console.

 

5.3           Google may use consultants and other contractors in connection with the performance of obligations and exercise of rights under this agreement, provided that such consultants and contractors will be subject to the same obligations as Google. After termination of this Agreement, Google will not distribute your Product, but may retain and use copies of the Product for support of the Store and the Android platform.

 

5.4           You grant to the user a non-exclusive, worldwide, and perpetual license to perform, display, and use the Product on the Device. If you choose, you may include a separate end user license agreement (EULA) in your Product that will govern the user's rights to the Product in lieu of the previous sentence.

 

5.5           You represent and warrant that you have all intellectual property rights, including all necessary patent, trademark, trade secret, copyright or other proprietary rights, in and to the Product. If You use third-party materials, You represent and warrant that you have the right to distribute the third-party material in the Product. You agree that you will not submit material to Store that is copyrighted, protected by trade secret or otherwise subject to third party proprietary rights, including patent, privacy and publicity rights, unless you are the owner of such rights or have permission from their rightful owner to submit the material.

 

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6.Brand Features and Publicity.

 

6.1           Each party shall own all right, title and interest, including without limitation all intellectual property rights, relating to its Brand Features. Except to the limited extent expressly provided in this Agreement, neither party grants, nor shall the other party acquire, any right, title or interest (including, without limitation, any implied license) in or to any Brand Features of the other party. Subject to the terms and conditions of this Agreement, Developer grants to Google and its affiliates a limited, non-exclusive, royalty-free license during the term of this Agreement to display Developer Brand Features, submitted by Developer to Google, for use solely online or on mobile devices and in either case solely in connection with the distribution and sale of Developer's Product through the Store, or to otherwise fulfill its obligations under this Agreement. If Developer discontinues the distribution of specific Products on the Store, Google will cease use of the discontinued Products' Brand Features pursuant to this Section 6.1, except as necessary to allow Google to effectuate Section 3.8. Nothing in this Agreement gives Developer a right to use any of Google's trade names, trademarks, service marks, logos, domain names, or other distinctive brand features.

 

6.2           Publicity. In addition to the license granted in 6.1 above, for purposes of marketing the presence, distribution and sale of the Developer's Product in the Store and its availability for use on devices and through other Google services, Google and its affiliates may include Developer Brand Features, submitted by Developer to Google: (i) within the Store and in any Google-owned online or mobile properties; (ii) in online, mobile, television, out of home (e.g. billboard), and print advertising formats outside the Store when mentioned along with other Store Products; (iii) when making announcements of the availability of the Product; (iv) in presentations; and (v) in customer lists which appear either online or on mobile devices (which includes, without limitation, customer lists posted on Google websites). If Developer discontinues the distribution of specific Products on the Store, Google will cease further use of the discontinued Products' Brand Features for such marketing purposes. Google grants to Developer a limited, non-exclusive, worldwide, royalty-free license to use the Android Brand Features for the term of this Agreement solely for marketing purposes and only in accordance with .

 

7.Product Takedowns.

 

7.1           Your Takedowns. You may remove your Products from future distribution via the Store at any time, but you must comply with this Agreement and the Payment Processor's Payment Account terms of service for any Products distributed through the Store, including but not limited to refund requirements.

 

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Removing your Products from future distribution via the Store does not (a) affect the license rights of users who have previously purchased or downloaded your Products, (b) remove your Products from Devices or from any part of the Store where previously purchased or downloaded applications are stored on behalf of users, or (c) change your obligation to deliver or support Products or services that have been previously purchased or downloaded by users. Notwithstanding the foregoing, in no event will Google maintain on any portion of the Store (including, without limitation, the part of the Store where previously purchased or downloaded applications are stored on behalf of users) any Product that you have removed from the Store and provided written notice to Google that such removal was due to (i) an allegation of infringement, or actual infringement, of any copyright, trademark, trade secret, trade dress, patent or other intellectual property right of any person, (ii) an allegation of defamation or actual defamation, (iii) an allegation of violation, or actual violation, of any third party's right of publicity or privacy, or (iv) an allegation or determination that such Product does not comply with applicable law.

 

If you remove a Product from the Store pursuant to clauses (i), (ii), (iii) or (iv) of this Section 7.1, and an end user purchased such Product within a year before the date of takedown, at Google's request, you must refund to the affected end user all amounts paid by such end user for such affected Product, less the portion of the Transaction Fee specifically allocated to the credit card/payment processing for the associated transaction.

 

7.2           Google Takedowns. While Google does not undertake an obligation to monitor the Products or their content, if Google is notified by you or otherwise becomes aware and determines in its sole discretion that a Product or any portion thereof or your Brand Features; (a) violates the intellectual property rights or any other rights of any third party; (b) violates any applicable law or is subject to an injunction; (c) is pornographic, obscene or otherwise violates Google's hosting policies or other terms of service as may be updated by Google from time to time in its sole discretion; (d) is being distributed by you improperly; (e) may create liability for Google or Authorized Carriers; (f) is deemed by Google to have a virus or is deemed to be malware, spyware or have an adverse impact on Google's or an Authorized Carrier's network; (g) violates the terms of this Agreement or the Developer Program Policies for Developers; or (h) the display of the Product is impacting the integrity of Google servers (i.e., users are unable to access such content or otherwise experience difficulty), Google may remove the Product from the Store or reclassify the Product at its sole discretion. Google reserves the right to suspend and/or bar any

 

Developer from the Store at its sole discretion. If your Product contains elements that could cause serious harm to user devices or data, Google may at its discretion disable the Product or remove it from devices on which it has been installed. Google may suspend or terminate distribution of your Products if you materially breach the terms of any non-disclosure agreement or other agreement relating to the Store or the Android platform.

 

Google enters into distribution agreements with device manufacturers and Authorized Carriers to place the Store software client application for the Store on Devices. These distribution agreements may require the involuntary removal of Products in violation of the Device manufacturer's or Authorized Carrier's terms of service.

 

In the event that your Product is involuntarily removed because it is defective, malicious, infringes intellectual property rights of another person, defames, violates a third party's right of publicity or privacy, or does not comply with applicable law, and an end user purchased such Product within a year before the date of takedown,: (i) you must refund to Google, all amounts received, plus any associated fees (i.e. chargebacks and payment transaction fees), and (ii) Google may, at its sole discretion, withhold from your future sales the amount in subsection (i) above.

 

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8.Your Developer Credentials.

 

8.1 You agree that you are responsible for maintaining the confidentiality of any developer credentials that Google may issue to you or which you may choose yourself and that you will be solely responsible for all Products that are developed under your developer credentials. Google may limit the number of Developer Accounts issued to you or to the company or organization you work for.

 

9.Privacy and Information.

 

9.1 In order to continually innovate and improve the Store, Google may collect certain usage statistics from the Store and Devices, including but not limited to, information on how the Store and Devices are being used.

 

9.2 The data collected is examined in the aggregate to improve the Store for users and Developers and is maintained in accordance with. To ensure the improvement of Products, limited aggregate data may be available to you upon written request.

 

10.Terminating this Agreement.

 

10.1         This Agreement will continue to apply until terminated by either you or Google as set out below.

 

10.2         If you want to terminate this Agreement, you must provide Google with thirty (30) days prior written notice (unless this Agreement terminates under Section 14.1) and cease your use of any relevant developer credentials.

 

10.3         Google may at any time, terminate this Agreement with you if:

 

(A)         you have breached any provision of this Agreement; or

 

(B)         Google is required to do so by law; or

 

(C)         you cease being an authorized Developer; or

 

(D)         Google decides to no longer provide the Store.

 

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11.DISCLAIMER OF WARRANTIES.

 

11.1         YOU EXPRESSLY UNDERSTAND AND AGREE THAT YOUR USE OF THE STORE IS AT YOUR SOLE RISK AND THAT THE STORE IS PROVIDED "AS IS" AND "AS AVAILABLE" WITHOUT WARRANTY OF ANY KIND.

 

11.2         YOUR USE OF THE STORE AND ANY MATERIAL DOWNLOADED OR OTHERWISE OBTAINED THROUGH THE USE OF THE STORE IS AT YOUR OWN DISCRETION AND RISK AND YOU ARE SOLELY RESPONSIBLE FOR ANY DAMAGE TO YOUR COMPUTER SYSTEM OR OTHER DEVICE OR LOSS OF DATA THAT RESULTS FROM SUCH USE.

 

11.3         GOOGLE FURTHER EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

 

12.LIMITATION OF LIABILITY.

 

12.1 YOU EXPRESSLY UNDERSTAND AND AGREE THAT GOOGLE, ITS SUBSIDIARIES AND AFFILIATES, AND ITS LICENSORS SHALL NOT BE LIABLE TO YOU UNDER ANY THEORY OF LIABILITY FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL CONSEQUENTIAL OR EXEMPLARY DAMAGES THAT MAY BE INCURRED BY YOU, INCLUDING ANY LOSS OF DATA, WHETHER OR NOT GOOGLE OR ITS REPRESENTATIVES HAVE BEEN ADVISED OF OR SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ANY SUCH LOSSES ARISING.

 

13.Indemnification.

 

13.1         To the maximum extent permitted by law, you agree to defend, indemnify and hold harmless Google, its affiliates and their respective directors, officers, employees and agents, and Authorized Carriers from and against any and all third party claims, actions, suits or proceedings, as well as any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys fees) arising out of or accruing from (a) your use of the Store in violation of this Agreement, and (b) your Product that infringes any copyright, trademark, trade secret, trade dress, patent or other intellectual property right of any person or defames any person or violates their rights of publicity or privacy.

 

13.2         To the maximum extent permitted by law, you agree to defend, indemnify and hold harmless the applicable Payment Processors (which may include Google and/or third parties) and the Payment Processors' affiliates, directors, officers, employees and agents from and against any and all third party claims, actions, suits or proceedings, as well as any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys fees) arising out of or accruing from taxes related to Your distribution of Products distributed via the Store.

 

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14.Changes to the Agreement.

 

14.1         Google may make changes to this Agreement at any time by sending the Developer notice by email describing the modifications made. Google will also post a notification on this page and/or on the Developer Console describing the modifications made. You should look at the Agreement, and check for notice of any changes, regularly. Changes will not be retroactive. They will become effective, and will be deemed accepted by Developer, (a) immediately for those who become Developers after the notification is posted, or (b) for pre-existing Developers, on the date specified in the notice, which will be no sooner than 30 days after the changes are posted (except changes required by law which will be effective immediately). If you do not agree with the modifications to the Agreement, you must terminate your use of the Store, which will be your sole and exclusive remedy. You agree that your continued use of the Store constitutes your agreement to the modified terms of this Agreement.

 

15.General Legal Terms.

 

15.1         This Agreement constitutes the whole legal agreement between you and Google and governs your use of the Store, and completely replaces any prior agreements between you and Google in relation to the Store.

 

15.2         You agree that if Google does not exercise or enforce any legal right or remedy which is contained in this Agreement (or which Google has the benefit of under any applicable law), this will not be taken to be a formal waiver of Google's rights and that those rights or remedies will still be available to Google.

 

15.3         If any court of law, having the jurisdiction to decide on this matter, rules that any provision of this Agreement is invalid, then that provision will be removed from this Agreement without affecting the rest of this Agreement. The remaining provisions of this Agreement will continue to be valid and enforceable.

 

15.4         You acknowledge and agree that each member of the group of companies of which Google is the parent shall be third party beneficiaries to this Agreement and that such other companies shall be entitled to directly enforce, and rely upon, any provision of this Agreement that confers a benefit on (or rights in favor of) them. Other than this, no other person or company shall be third party beneficiaries to this Agreement.

 

15.5         EXPORT RESTRICTIONS. PRODUCTS ON THE STORE MAY BE SUBJECT TO UNITED STATES EXPORT LAWS AND REGULATIONS. YOU MUST COMPLY WITH ALL DOMESTIC AND INTERNATIONAL EXPORT LAWS AND REGULATIONS THAT APPLY TO YOUR DISTRIBUTION OR USE OF PRODUCTS. THESE LAWS INCLUDE RESTRICTIONS ON DESTINATIONS, USERS AND END USE.

 

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15.6         The rights granted in this Agreement may not be assigned or transferred by either you or Google without the prior written approval of the other party. Neither you nor Google shall be permitted to delegate their responsibilities or obligations under this Agreement without the prior written approval of the other party. Any other attempt to assign is void. If you experience a change of control (for example, through a stock purchase or sale, merger, or other form of corporate transaction): (a) you will give written notice to Google within 30 days after the change of control; and (b) Google may immediately terminate this Agreement any time between the change of control and 30 days after it receives that written notice.

 

15.7         All claims arising out of or relating to this Agreement or your relationship with Google under this Agreement, shall be governed by the laws of the State of California excluding California’s conflict of laws provisions. You and Google further agree to submit to the exclusive jurisdiction of the federal or state courts located within the county of Santa Clara, California to resolve any legal matter arising from or relating to this Agreement or your relationship with Google under this Agreement, except that you agree that Google shall be allowed to apply for injunctive relief in any jurisdiction.

 

15.8         The obligations in Sections 5, 6.1 (solely as necessary to permit Google to effectuate Section 3.8), 7, 11, 12, 13, and 15 will survive any expiration or termination of this Agreement.

 

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EX-10.5 5 v423719_ex10-5.htm EXHIBIT 10.5

 

Exhibit 10.5

 

APP DISTRIBUTION AND SERVICES AGREEMENT

 

This is an agreement between Amazon Digital Services, Inc., Amazon Media EU S.a.r.l., Amazon Services International, Inc., Amazon Servicos de Varejo do Brasil Ltda., Amazon.com Int’l Sales, Inc., and Amazon Australia Services, Inc. (each, individually, an “Amazon Party” and, together with their affiliates, “Amazon,” “we” or “us”) and you (if registering as an individual) or the entity you represent (if registering as a business) (“Developer” or “you”). Any other Amazon affiliate that we designate is also an Amazon Party.

 

1.          Structure of Agreement. This agreement (the “Agreement”) includes the body of the agreement below, all schedules to this agreement (“Schedules”), and all terms, rules and policies that we make available for participating in this program, including on our developer portal (together, the “Program Policies”). However, the terms in each Schedule only apply to you if you engage in the activity or use the Program Materials (defined in Section 3) to which the Schedule applies (for instance, the terms of the Distribution Schedule only apply to you if you submit a product to us to sell, distribute, or promote). Please carefully read the Agreement before clicking to accept it.

 

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2.          Our Program. Our program (the “Program”) allows end users to purchase, download, and access mobile and non-mobile software applications, games, and other digital products, and to use related services that we make available (for instance, Amazon GameCircle). “Apps” are software applications, games, and other digital products that you submit to us for sale, distribution, or promotion through the Program, or with which you use any Program Materials, together with their enhancements, upgrades, updates, bug fixes, new versions and other modifications and amendments. “Content” means your Apps, all content, ads, services, technology, data and other digital materials included in or made available through your Apps, and all Product Information (if applicable, defined in the Distribution Schedule).

 

3.          Program Materials. We may make available certain software, software development kits, libraries, application programing interfaces, services, documentation, sample code, and related materials and information for use in connection with the Program (collectively, the “Program Materials”). If you use any Program Materials, you are subject to and agree to comply with our Program Materials License Agreement (the "Program Materials License"), located at https://developer.amazon.com/sdk/pml.html. Your use of certain Program Materials is also subject to the additional terms in any Schedules that apply to those Program Materials (for instance, your use of the Program Materials that we make available for sale of In-App Products is subject to the terms of the Distribution Schedule and the In-App Product Schedule). You are solely responsible for ensuring your Content functions properly with any Program Materials you use, including any future updated or modified versions of those Program Materials. In the event of a conflict between this Agreement and the Program Materials License, the Program Materials License will govern with respect to your use of the Program Materials.

 

4.          Compliance with Laws; Privacy Obligations. You and your Content must comply with all applicable laws, rules, regulations, orders, and other requirements of governmental agencies (“Laws”). In addition, if you (or any third-party plug-in or service provider you use) have access to any name, password, other login information, or personally identifiable information or personal data of any end user based on any use of or interaction with your Content, you will (i) provide legally adequate privacy notices to such end user, (ii) obtain any necessary consent from the end user for the collection, use, transfer, and storage of the information, (iii) use and authorize others to access and use the information only for the purposes permitted by the end user, and (iv) ensure the information is collected, used, transferred, and stored in accordance with applicable privacy notice(s) and applicable Laws.

 

5.          Prohibited Actions. You may not reverse engineer, disassemble or decompile any binary code used in connection with the Program, including any Program Materials we provide you. You will not take any action related to the Program that interferes with, damages, or accesses or uses in any unauthorized manner the hardware, software, networks, technologies or other properties or services of ours or of any end user, mobile operator or other third party.

 

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6.          Our Operations. We have sole discretion to determine all features and operations of the Program and to change the Program from time to time. You acknowledge that we have no obligation to promote, distribute, or offer for sale any App, to permit you or your Content to use any Program Materials, or to continue any of the foregoing once begun. We are responsible for and have sole discretion related to processing payments, collecting payments, addressing requests for refunds, and providing customer service related to our obligations, and we will have sole ownership and control of all sales and other data we obtain from end users in connection with the Program.

 

7.          Term and Termination; Suspension. The term of this Agreement (the “Term”) will begin on the date you click to accept it and will continue until you or we terminate it. We are entitled to terminate this Agreement and access to your Program account at our discretion with or without advance notice to you. You are entitled to terminate this Agreement at any time by giving us at least 10 days advance written notice. We may also suspend your participation in our Program at our discretion with or without notice to you. We are not obligated to return copies of any Content or other materials that you provide. The following provisions of this Agreement will survive termination of this Agreement: Sections 3 through 5, 8 through 13, all Developer representations and warranties in this Agreement, and any other provisions that, by their nature, are intended to survive.

 

8.          Representations and Warranties. You represent, warrant and covenant that:

 

a.          You are at least the legal age of majority and that you are able to form a legally binding contract. If Developer is a business or other legal entity and not an individual, then the individual entering into this Agreement on Developer’s behalf represents that he or she has all necessary legal authority to bind Developer to this Agreement;

 

b.          You have the full right, power, and authority to enter into and fully perform this Agreement;

 

c.          Before providing us or any end user any Content, you will have obtained the rights necessary for the exercise of all rights granted under this Agreement, and you will be solely responsible for and will pay any licensors or co-owners any royalties or other monies due to them related to such Content;

 

d.          None of the following will violate any Law; require us to obtain any license, authorization, or other permission from any governmental agency or other third party; contain any defamatory material; or violate or infringe any intellectual property, proprietary, or other rights of any person or entity (including contractual rights, copyrights, trademarks, patents, trade dress, trade secret, common law rights, rights of publicity, or privacy, or moral rights): (i) the exercise of any rights granted under this Agreement; (ii) any materials (including advertising) embodied in the Content; (iii) the sale, distribution, or promotion of the Content as authorized in this Agreement; or (iv) any notices, instructions or advertising by you for or in connection with any Content;

 

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e.          Your Content may be imported to, exported from, and lawfully used in the United States, all countries in which we operate the Program, and all countries in which you’ve authorized sales to end users (without the need for us to obtain any license or clearance or take any other action) and your Content is in full compliance with all applicable Laws governing imports, exports, and use, including those applicable to software that incorporates or makes use of information security technology, including but not limited to encryption technology;

 

f.           Your Content will not contain any viruses, spyware, “Trojan horses,” or other “malware” or harmful code, and will not cause injury to any person or damage to any property; and

 

g.          You will include any attributions, copyright information and other notices, terms and conditions that may be required to be provided to end users based on your use of third party “open source” software or other third party intellectual property in any of your Content. You will also promptly make available to us, end users and any other third party that is entitled to it, the source code corresponding to any Content or portion thereof if and in the manner required by applicable third party terms and conditions (e.g., open source software licenses).

 

9.          Indemnity. You will indemnify, defend and hold us (including any respective officers, directors, employees, contractors and assigns) harmless from and against any loss, claim, liability, damage, action or cause of action (including reasonable attorneys’ fees) that arises from any claim relating to any Content, or from any breach of your representations, warranties or obligations set forth in this Agreement (individually, a “Claim,” and collectively, the “Claims”). You will not consent to the entry of a judgment or settle a Claim without our prior written consent, which may not be unreasonably withheld. You will use counsel reasonably satisfactory to us to defend each Claim. If we reasonably determine that a Claim might adversely affect us, we may take control of the defense at our expense (and without limiting your indemnification obligations). Your obligations under this Section 9 are independent of your other obligations under the Agreement.

 

10.        Publicity and Confidentiality. You will: (a) protect and not disclose information made available by us that is identified as confidential or that reasonably should be considered confidential; (b) use this information only to fulfill your obligations under this Agreement; and (c) either destroy or return all such information to us promptly when the Agreement terminates (and, upon request, confirm such destruction in writing). This paragraph covers all confidential information regardless of when you receive it. Under our Trademark, Brand, and Marketing Guidelines (“Trademark Guidelines”), we may make certain trademarks and logos available for you to use to promote the availability of your Apps through the Program. You must comply with the Trademark Guidelines and all other Program Policies in your use of those trademarks and logos. Unless you have received our express written permission, you will not otherwise use any trademark, service mark, commercial symbol, or other proprietary right of ours, issue press releases or other publicity relating to us or this Agreement, or refer to us in promotional materials.

 

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11.        Disclaimers and Limitations of Liability. THE PROGRAM AND ANY PROGRAM MATERIALS ARE PROVIDED “AS IS.” WE WILL IN NO EVENT BE LIABLE FOR ANY LOSS OF DATA OR CONTENT, LOSS OF PROFITS, COST OF COVER OR OTHER SPECIAL, INCIDENTAL, CONSEQUENTIAL, INDIRECT, EXEMPLARY OR RELIANCE DAMAGES ARISING FROM OR IN RELATION TO THIS AGREEMENT, OR FOR ANY EQUITABLE REMEDY OF DISGORGEMENT OR OTHERWISE, HOWEVER CAUSED AND REGARDLESS OF THEORY OF LIABILITY. IN NO EVENT WILL OUR LIABILITY HEREUNDER EXCEED THE AMOUNT OF ROYALTIES DUE AND PAYABLE TO DEVELOPER UNDER THIS AGREEMENT FOR THE TWELVE-MONTH PERIOD PRECEDING SUCH CLAIM. WE SPECIFICALLY DISCLAIM, WITH RESPECT TO ALL SERVICES, SOFTWARE, CONTENT OR PRODUCTS PROVIDED BY OR ON BEHALF OF US IN CONNECTION WITH THIS AGREEMENT OR THE PROGRAM OR PROGRAM MATERIALS, ALL WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. YOU ACKNOWLEDGE AND AGREE THAT WE CANNOT ENSURE THAT CONTENT SUBMITTED BY OR ON BEHALF OF YOU WILL BE PROTECTED FROM THEFT OR MISUSE, AND WE WILL HAVE NO LIABILITY ARISING FROM A FAILURE OF ANY SECURITY TECHNOLOGY OR PROCEDURE OR OF ANY END USER TO COMPLY WITH ANY TERMS OF USE REGARDING THE PROGRAM OR OTHERWISE.

 

12.        Agreement Changes. We reserve the right to change this Agreement at any time in our discretion. We will give you notice of the changes by posting an updated version of this Agreement online or by emailing you at an email address you have provided. Changes to the payment of Royalties will be effective 30 days after we post them or otherwise notify you of them. Any other changes to the Agreement will be effective as of the date we post them or otherwise notify you of them, unless we specify a different effective date when we make a particular change. You are responsible for checking for Agreement updates. Your continued participation in the Program after changes to this Agreement take effect will constitute your acceptance of the changes. If you do not agree to a change, you must stop participating in the Program and terminate this Agreement.

 

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13.        General. This Agreement may not be amended except in writing signed by both parties or as provided in Section 12 above. If any provision of this Agreement is held invalid by a court with jurisdiction over the parties to this Agreement, such provision will be deemed to be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law, and the remainder of this Agreement will remain in full force and effect. The word “including” will be interpreted without limitation when used in this Agreement. The parties to this Agreement are independent contractors. Each party will bear its own costs and expenses in performing this Agreement. We may use one or more subcontractors to exercise our rights and perform our obligations hereunder. We will be responsible for ensuring that our subcontractors comply with the applicable portions of this Agreement when performing for us or on our behalf. Our failure to enforce any provision of this Agreement will not constitute a waiver of our rights to subsequently enforce the provision. Each Amazon Party is severally liable for its own obligations under this Agreement and is not jointly liable for the obligations of other Amazon Parties. The rights granted to Amazon.com Int’l Sales, Inc. under this Agreement are only for sale, distribution, and promotion of Apps outside of the United States. You may not assign any of your rights or obligations under this Agreement, whether by operation of law or otherwise, without our prior written consent, except that you may assign all of your rights and obligations under this Agreement to any corporation or other entity without consent in connection with a merger or the sale of all or substantially all of your assets as long as you give us written notice of any such assignment no later than ten business days before such assignment. Subject to the foregoing limitation, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF WASHINGTON, WITHOUT REFERENCE TO RULES GOVERNING CHOICE OF LAWS OR THE U.N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS. YOU HEREBY IRREVOCABLY CONSENT TO AND WAIVE ANY OBJECTION TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE FEDERAL AND STATE COURTS LOCATED AT KING COUNTY, WASHINGTON WITH RESPECT TO ANY CLAIMS, SUITS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. This Agreement and the Program Materials License constitutes the entire agreement between the parties with respect to its subject matter, supersedes any and all prior or contemporaneous agreements between the parties with respect to its subject matter, and does not give any third party (except where specified) any rights or remedies hereunder. Any notice or other communication to be given hereunder will be in writing and given (i) by us via email, via a posting in the Program Policies, or via a message through your Program account, or (ii) by you via email to apps- notices@amazon.com with a cc via email to contracts-legal@amazon.com, or to such other email or physical addresses as we may specify from time to time. The date of receipt will, in the case of email, be deemed the date on which such notice is transmitted.

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Distribution Schedule

 

The terms of this Schedule apply if you submit any App for sale, distribution, or promotion through the Program.

 

1.          Basic Terms.

 

a.          Types of Apps. Our Program supports the sale, distribution, and promotion of Apps for multiple platforms. A “Mobile App” is an App that is designed to operate on Android or another mobile operating system or in a mobile browser. An “Amazon Underground App” is a Mobile App that you submit for inclusion in Amazon Underground (defined in the Amazon Underground Schedule). A “PC Game” is a video game or video game related App that is designed to operate on Windows, OSX, or another personal computer operating system or in a desktop browser. “PC Software” is an App that is designed to operate on Windows, OSX, or another personal computer operating system or in a desktop browser and is not a PC Game. An “Alexa Skill” is an App that can be accessed through the Alexa Voice Services platform. An “In-App Product” is an App intended to be accessed or used within a software application or game (such as additional or enhanced functionality, in-app tools, data, subscriptions, or media content), but that is made available for sale through the Program as a separate item from the software application or game in which it is intended to be used. If you submit an App to us for sale, distribution, or promotion, you authorize us to sell, distribute, and promote that App and related Content as provided in this Schedule, including through regional Amazon marketplaces (each, an “Amazon Marketplace”) and via Amazon websites or any other web page real estate, online point of presence, application, mobile interface, service, or user interface that allows for the discovery, download or purchase of Apps from us, including the Amazon Associates program and similar programs.

 

b.          Royalty. For each sale of an App, the responsible Amazon Party will pay you a royalty (“Royalty”) calculated as follows (where List Price is defined in and subject to Section 5a of this Schedule):

 

 

App Type   Royalty
     
Mobile Apps (including Mobile App In-App Products and excluding Amazon UndergroundApps)   70% of the List Price for the applicable Amazon Marketplace as of the time of purchase
     
Amazon UndergroundApps    Underground Royalties described in the Amazon Underground Schedule.
PC Games (including PC Game In-App Products)   Alexa Skills
     

PC Software (including PC Software In-App Products) 70% of the List Price for the applicable country as of the time of purchase 

   

 

The lower of (i) 70% of the List Price or (ii) 90% of the wholesale price for the corresponding physical version of the App (if applicable), in each case, for the applicable country as of the time of purchase

 

Our Program does not currently support the sale of paid Alexa Skills or purchases within Alexa Skills. We do not currently pay any Royalty or other compensation related to Alexa Skills.

   

  

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No Royalty is payable for Apps with a List Price of $0.00. Royalties for certain In-App Products are subject to additional restrictions in the In-App Product Schedule. Taxes and any separately stated fees or charges are excluded from the List Price when calculating Royalties. A Royalty is due only for sales for which we have received final payment from or on behalf of an end user. If an App is purchased using a credit card or bank account deduction mechanism, final payment will be deemed to have occurred when the applicable credit card company or bank has fully settled the payment for the applicable purchase. The List Price used for purposes of calculating Royalties for PC Games and PC Software will be based on our determination of an end user’s country.

 

c.          Territory. Worldwide, subject to Section 3e of this Schedule.

 

2.          Submission of Apps and Information.

 

a.          Submission of Apps. You may choose to submit to us any Apps that meet the requirements of the Agreement. While an App is available for distribution, you will submit any bug fixes, patches, and other updates to the Apps, together with any related Required Product Information (defined in Section 2b of this Schedule), as soon as they are available. You will ensure that all of your Content complies with this Agreement, including all Program Policies. For any Content that requires a license key or other data element that an end user must use in order to use or access any feature of functionality of an App (a “License Key”), you will deliver License Keys to us upon request in a format we specify.

 

b.          Product Information. Together with delivery of each App, you will also provide the following information: App title, category, Developer name, publisher name (where applicable), List Price, product description, icon/image, and any other information related to the Apps that we require (together, “Required Product Information”). “Product Information” includes the Required Product Information and any other information and content related to your Content and/or to you, such as (a) all metadata, graphics, artwork, images, trademarks, trade names, logos and other descriptive or identifying information and materials associated with you or a particular App, (b) the excerpts created in accordance with Section 3b of this Schedule, and (c) any Developer’s EULA (defined in Section 4a of this Schedule). You are responsible for providing accurate Product Information, and will not make any false, inaccurate, or misleading claims or statements regarding any Content or otherwise mislead end users regarding any Content. If any Product Information is inaccurate or needs to be updated or modified, you will promptly provide us with corrections, updates, or modifications.

 

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3.          Grants of Rights

 

a.          Distribution. You hereby grant us the nonexclusive, irrevocable (subject to Sections 6 and 7 of this Schedule), royalty-free right to sell, distribute, and make available your Apps through the Program to end users in the Territory by all means of electronic distribution available now or in the future. You also hereby grant us the nonexclusive, irrevocable, royalty-free, worldwide rights to (i) use, evaluate and test your Content; (ii) reproduce and store your Apps in digital form on one or more computer facilities for the purpose of promoting, selling and distributing the Apps and in connection with the Program; (iii) modify and add to your Apps so that we can collect analytics relating to the Apps, evaluate and enforce our Program policies, and share aggregated information with you and others regarding the Program; (iv) modify and add to your Mobile Apps so we can (at your option) enforce digital rights management (“DRM”); (v) add metadata to your Mobile Apps so we can improve their compatibility with Amazon devices; and (vi) retain, after the Term, one or more electronic copies of each App and associated Content and allow access to and downloads and re-downloads of Apps by end users as provided in this Agreement. For Alexa Skills, the distribution rights set forth in the Alexa Skills Schedule apply in lieu of the rights set forth in this Section 3a. You acknowledge that we may allow end users who have purchased an App to download unlimited copies of that App. For avoidance of doubt, if end users download or access an App that is free of charge, that App will be deemed to be “purchased” by the end user for purposes of this Agreement.

 

b.          Promotion. You hereby grant us the nonexclusive, irrevocable, royalty-free, worldwide rights to use, reproduce, distribute, reformat, modify, create excerpts from, promote, advertise, transmit, and publicly display and perform in any and all digital and other formats (i) the Product Information for promotional purposes in connection with the Program (except that we will not use any trademarks you provide for purposes of us selling an App after the withdrawal of that App as described in Section 6 of this Schedule or after the Term) and (ii) your Apps and other Content in order to create limited promotional excerpts and in order to allow end users to try your Apps for a limited time without downloading or installing them.

 

c.          Additional Rights. In addition, we may exercise any ancillary rights relating to your Content that are reasonably necessary to effect the intent of the grants of rights contained in this Agreement, such as the rights to encode and to publically perform. We may also sublicense our rights in Product Information under this Agreement to third parties operating the websites or online or mobile points of presence described in Section 1a of this Schedule. Nothing in this Agreement restricts us from exercising any right available to us under applicable law or any separate license.

 

d.          Reservations of Rights. Subject to the rights granted in this Agreement and our ownership of the Program Materials, as between you and us, you retain all right, title and interest in and to Content that you submit to us. Subject to your rights in such Content, we retain all right, title and interest in and to the Program and all technology, content, information, services, trademarks and other intellectual property used in connection with it. Without limiting the foregoing, each of us recognizes that any uses of the other’s (or its affiliates’) brand features in connection with this Agreement, and goodwill associated with such uses, will inure solely to the party owning such brand features. If you provide suggestions, ideas, or other feedback to us about the Program, we will be free to exercise all rights in such feedback without restriction and without compensating you.

 

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e.          Geographic Filtering. Through our developer portal, you may designate countries where you do not want us to sell your Apps. We will implement measures intended to identify an end user’s country and to not offer your Apps for sale to end users from any countries you designate. We may rely on our determination of an end user’s country for all purposes under this Agreement.

 

4.          Additional Distribution Terms

 

a.          EULA. You may provide a EULA (“Developer’s EULA”) with any App if it complies with the requirements of, and is not inconsistent with, this Agreement. For any Mobile Apps you submit to the Program, you agree that the provisions of our customer terms of use for the Amazon Appstore that we designate as default end user license terms (“Default EULA Terms”) will apply to end users’ use of your Mobile Apps and associated Content. The Default EULA Terms will specify, among other things, that you are the licensor of the Mobile Apps and that we are not parties to your EULA. If there are any conflicts between the Default EULA Terms and Developer’s EULA, then to the extent of such conflict the Default EULA Terms will control. We do not have any responsibility or liability related to compliance or non-compliance by you or any end user under a Developer’s EULA or the Default EULA Terms.

 

b.          Embedded Advertising. You will ensure that any advertising presented to end users of the Content complies with all requirements of this Agreement. For example, (i) your access to and use of information related to end users’ use of embedded advertising must comply with our privacy-related requirements; (ii) embedded advertising must comply with the Program Policies at the time such advertising is accessed by any end user; and (iii) embedded advertising must not contain any “spyware,” “malware” or harmful code and must not cause injury to any person or damage to any property. In addition, for Mobile Apps, you may not display advertising, marketing, or promotional messaging to end users through the device notification bar or any other device-level notification system.

 

c.          Prohibited Actions. You have not and will not submit any Content that contains any software or other materials that are subject to licenses or restrictions (e.g., open source software licenses) that, when combined with additional software or other materials (collectively "additional items"), would require us to disclose, license, distribute or otherwise make all or any part of such additional items available to anyone.

 

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d.          Support. You will provide reasonable technical and product support for your Content as requested by end users or us or as described in our Program Policies. Your technical support will include levels of availability, response times and technical skills that are at least equivalent to those for the support you provide to end users of Similar Services. Without limiting the previous sentence, at a minimum you will respond within 24 hours to any support request that we identify as critical, and in all other cases within five business days of request from an end user or us. A “Similar Service” is any online service that makes digital products similar to those sold, distributed or promoted through the Program available to end users using a mode of distribution similar to those used by the Program, including any mobile or Internet-based application marketing, sales and distribution service.

 

e.          For Mobile Apps Only – Family Library. Our Family Library feature allows end users to link their Amazon accounts together to create a shared library of digital content for their household. Each member of a Family Library may download and use Mobile Apps purchased by the other members of that Family Library, and references in this Agreement to the end user who purchased an App will also include the members of that end user's Family Library.

 

f.           For Mobile Apps Only – DRM; Usage Policy. For your Mobile Apps, you may choose whether to enforce our DRM. If you decide not to enforce DRM for a Mobile App, that means our systems will not restrict end users who have purchased the Mobile App from downloading and/or making unlimited copies of the Mobile App. If you decide to enforce DRM for a Mobile App, that means you will allow end users who have purchased the Mobile App to download unlimited free copies of the Mobile App only to devices that are authenticated to their Amazon customer accounts. You will not incorporate any digital rights management technologies into Mobile Apps, other than any digital rights management technologies that only restrict end users’ access to media content distributed through a Mobile App (and not access to, or use of, the Mobile App itself).

 

g.          For Mobile Apps Only – Live App Testing Service. We may provide you access to a service (the “Live App Testing Service”) that allows you to invite end users you designate (“Testers”) to download a Mobile App (or a version of a Mobile App) before you make it available to the general public (a “Test App”). Testers will not be charged, and we will not pay you a Royalty, for the purchase of Test Apps or any In-App Products made available in Test Apps. If, after distributing a Test App through the Live App Testing Service, you make a version of that Test App available to the general public (including through any Similar Service), (i) you will submit that Mobile App for distribution through the Program and (ii) we may give to each Tester, without charge and without paying you a Royalty, that Mobile App and any In-App Products the Tester purchased in the Test App (or alternate In-App Products of equal or lesser value). You are responsible for selecting all Testers and ensuring you have obtained any consents necessary to share the Testers’ contact information with us and for us to invite the Testers to participate in the Live App Testing Service.

 

h.          For PC Software Only - Marketing Development Funds/Coop. For your PC Software, if you or any of your affiliates are, from time to time, a party to any agreement with Amazon pursuant to which you (or your affiliate) has agreed to pay marketing development funds, coop, rebates, or similar payments (collectively, “MDF”) for the physical version of any PC Software, then you will also pay equivalent MDF to us for the PC Software distributed under this Agreement. We may offset against payments due to you the amount of any MDF payable to us from you.

 

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5.          List Price; Royalty Payments and Reporting; Taxes

 

a.          List Price. The “List Price” for an App for an Amazon Marketplace or a country is an amount that does not exceed, at any time, the lowest list price, suggested retail price, or actual price you set for that App (including any similar edition, version or release) for any Similar Service in a country served by that Amazon Marketplace (for Mobile Apps) or country (for PC Games and PC Software). If you do not provide us a List Price for an App in all currencies in which we make that App available for sale, we may generate List Prices for any currencies you have not provided based on a List Price you have provided for that App, and we may update any List Prices we generate from time to time as currency conversion rates change. List Prices are inclusive of any VAT or similar taxes included in the purchase price displayed to end users, but those taxes are excluded from the List Price for Royalty calculation purposes. For example, if the List Price for your App for an Amazon Marketplace is 1.15 Euro and we display prices to an end user of that Amazon Marketplace inclusive of 15% VAT, the List Price for Royalty calculation purposes for a sale to that end user is 1.00 Euro. You will update the List Price for each App as necessary to ensure that it meets the requirements of this section. We have sole discretion to set the retail price and other terms on which we sell Apps.

 

b.          Payment Terms. Subject to the terms of this paragraph, we will pay you Royalties (i) for Mobile Apps (including Mobile App In-App Products), approximately 30 days after the end of the calendar month in which the applicable sale is made and (ii) for PC Games and PC Software (including PC Game and PC Software In-App Products), approximately 45 days after the end of the calendar month in which the applicable sale is made. At the time of payment, we will make available to you a report detailing sales of Apps and corresponding Royalties. All payments will be made via check, Electronic Funds Transfer (“EFT”) or other methods we designate in the Program Policies, in the currency in which the Apps were sold or other payment currency as set forth in the Program Policies. If we pay you for a sale in a currency other than the currency in which the sale was made, we will convert the Royalties from the currency in which the sale was made to the payment currency at an exchange rate that we or our bank determine, which may include fees and charges for the conversion. We are entitled to accrue and withhold payments, without interest, until the total amounts due to you (net of any tax withholding or deduction, as further described below) exceed the minimum payment thresholds set forth in the Program Policies. Depending on the country where you are located, we may require you to provide us with information for a valid bank account in your name for receiving EFT payments and, if you do not provide that information, we may withhold payments, without interest, until you do so and/or pay you via check and deduct a payment processing fee. You may not maintain any action or proceeding against us with respect to any report or payment unless you commence that action or suit within 6 months after the date the report or payment was due. If we pay you a Royalty on a sale and later issue a refund or credit to the end user for such sale (or receive a chargeback related to the sale), we may offset the amount of the Royalty we previously paid you against future Royalties or other amounts that would otherwise be payable to you under this Agreement, or require you to remit that amount to us. We may also withhold and offset any sums you owe to us against amounts that are payable to you. If a third party asserts that you did not have all rights required to make available an App to us, if we determine that you may be in breach of this Agreement, or if we have other claims against you, we are entitled to hold all Royalties pending resolution of such issue. When this Agreement terminates, we may withhold all Royalties due for a period of three months from the date they would otherwise be payable, in order to ensure our ability to offset any end user refunds or other offsets to which we are entitled.

 

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c.          Taxes. Any Amazon Party selling Apps is responsible for collecting and remitting any taxes imposed on its sales of those Apps to end users. You are responsible for any income or other taxes due and payable resulting from any Amazon Party’s payments to you. Accordingly, unless otherwise stated, the amounts due to you hereunder are inclusive of any taxes that may apply to such payments. The Amazon Parties maintain the right, however, to deduct or withhold any applicable taxes that we may be legally obligated to deduct or withhold from amounts due from the Amazon Parties, and the amounts due, as reduced by such deductions or withholdings, will constitute full payment to you. If you fulfill any of your Content to end users, and if any relevant taxing authority considers that Content to be taxable and your fulfillment of that Content to be a sale to us that is subject to any sales, use, value added or similar taxes (“Fulfillment Transaction Taxes”), Amazon may provide you with an exemption certificate or equivalent information acceptable to the relevant taxing authority, in which case you will not charge or collect the Fulfillment Transaction Taxes covered by such certificate. You will be solely liable for, and will indemnify and hold us and our affiliates harmless against, all Fulfillment Transaction Taxes, if any, and against all interest, penalties, costs and expenses (including attorney’s fees) related to any such Fulfillment Transaction Taxes. If any taxing authority assesses or claims any tax liability on or against us or our affiliates with respect to any Fulfillment Transaction Taxes, we or our affiliates will control the defense against such assessment or claim (without limiting your obligation to indemnify and hold us and our affiliates harmless pursuant to this Section 5c). You will provide Amazon with any forms, documents or other certifications as may be requested by Amazon to satisfy any information reporting or tax obligations with respect to this Agreement.

 

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6.          App Availability; Withdrawal. We may determine in our discretion to make any App available through our Program. We may stop any transaction, or take other actions as needed to restrict access to or availability of any Content that does not comply with this Agreement or that otherwise might adversely affect end users. Any withdrawal of an App does not relieve you of responsibility to ensure the App complies with this Agreement or to perform other obligations under this Agreement. Subject to other terms of this Agreement, you may withdraw an App from further sale through our Program as of a specified date by giving us notice. We will use commercially reasonable efforts to stop selling the App within 10 business days after we receive such notice, and within 5 business days after such receipt in connection with a withdrawal request which you’ve designated as necessary because of an unexpected loss of (or third party claim related to) the rights required under this Agreement. You will immediately notify us if you unexpectedly lose such rights or become aware of a third party claim related to these rights. Any withdrawal by you will apply only to future end user purchases after the withdrawal date and not to purchases that have already occurred, unless we otherwise determine in our discretion.

 

7.          Termination; Survival. If the Agreement is terminated, we will stop selling your Apps as of the date the termination takes effect. Also, unless we otherwise determine in our discretion, any termination or suspension of your participation in the Program will not affect further access, use, downloads or re-downloads of Apps by end users who have purchased the App before the termination or suspension takes effect. Sections 3 through 5 and 7 of this Schedule and any other provisions that, by their nature, are intended to survive, will survive any termination of the Agreement. All rights to Apps acquired by end users will survive termination.

 

In-App Products Schedule

 

The terms of this Schedule apply if you submit any In-App Product for sale, distribution, or promotion through the Program.

 

1.          Product Information. Your product descriptions for In-App Products must disclose how the In-App Product is used and any restrictions on end users’ use or access to the In-App Product. At the time you submit an In-App Product for inclusion in the Program, you must identify if it (a) makes content or services available to end users on a subscription basis (a “Subscription In-App Product”) or (b) is limited to a specific number of uses or is otherwise intended to be used up or consumed in the course of using the applicable software application or game (e.g., single use items or virtual coins in a game) (a “Consumable In-App Product”). Your product descriptions for Subscription In-App Products must disclose the content and services included in the subscription, the frequency with which new content will be delivered during the subscription period (if applicable), and whether or not content delivered during the subscription will continue to be accessible by the end user following the termination or expiration of the subscription (if applicable). Your product descriptions for Consumable In-App Products must disclose that the product is consumable and how the product is used and consumed in the App.

 

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2.          Fulfillment of In-App Products. You are responsible for fulfilling to end users all purchases of In-App Products. We may provide a hosting and delivery service to facilitate the fulfillment of certain types of In-App Products; however, you are responsible for providing all other hosting, delivery, and related services necessary to deliver and enable your In-App Products. Upon an end user’s purchase of an In-App Product, you will promptly deliver (if applicable) and enable the In-App Product for that end user. You must fulfill Subscription In-App Products throughout the entire subscription period purchased by the applicable end user. You will ensure that all In-App Products match the applicable product description and other Product Information, function as intended, and otherwise comply with the Agreement, including all Program Policies. You agree that the Royalties payable to you under this Agreement constitute full and complete compensation for all hosting, delivery, and other services you perform or provide in connection with the sale and fulfillment of In-App Products.

 

3.          Royalties for In-App Products. Royalties for In-App Products will be calculated and paid as provided in the Distribution Schedule. However, no Royalty is due for (a) Subscription In-App Products that we make available to end users at no charge as part of free trial subscriptions or other promotional offers that you approve or (b) Subscription In-App Products that are intended to be accessed or used within Mobile Apps listed in our News or Magazine categories (or similar or successor categories) that we make available to end users at no charge as part of free trial subscriptions or other promotional offers of up to 30 days (or any longer period you approve). We may auto-renew end users’ purchases of Subscription In-App Products, and for sales of Subscription In-App Products to renewing subscribers, your Royalty will be calculated based on the lower of the then current List Price and (ii) the List Price in effect at the time the applicable end user first subscribed.

 

4.          No sale of physical goods; Prohibited products. You will only submit as In-App Products digital products, content, and services intended to be accessed or used within your software applications and games. You will not submit as an In-App Product any physical good or any other product, content, or service intended to be delivered or fulfilled outside of the applicable software application or game (though the sale of digital content accessible both inside and outside your software application or game is permissible), or that otherwise violates our Program Policies (including any list of prohibited in-app products we establish). The restrictions in this section do not limit your use of the Amazon Mobile Associates API (defined in the Amazon Mobile Associates Schedule).

 

5.          Additional Requirements – Mobile App In-App Products Only. You may not fulfill Mobile App In-App Products by delivering additional executable code to the applicable software application or game (and you will not submit for inclusion in the Program any Mobile App In-App Product that requires the delivery of additional executable code). You will ensure that all Mobile App In-App Products (other than Consumable In-App Products) purchased by an end user are delivered to and usable on all copies of the applicable Mobile App installed by that end user on any device (including all copies of the Mobile App installed or reinstalled in the future); however, for Subscription In-App Products, if your product description clearly discloses (at the time of an end user’s initial purchase) that the subscription content and/or services will be available only while the end user has an active subscription, you are not required to deliver and enable the use of the subscription content and services for that end user after the end user’s subscription has ended.

 

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6.          Survival. Following any termination of the Agreement, we may continue to auto-renew existing subscribers’ purchases of Subscription In-App Products for up to 90 days (the “Subscription Sell-Off Period”). Sections 2, 5 and 6 of this Schedule and any other provisions that, by their nature, are intended to survive, will survive any termination of the Agreement and you will continue to fulfill all purchases of (a) In-App Products made prior to such termination and (b) Subscription In-App Products made prior to the end of the Subscription Sell-Off Period.

 

Amazon Underground Schedule

 

The terms of this Schedule apply if you submit any Mobile App for inclusion in Amazon Underground. “Amazon Underground” is a program that allows the purchase of certain Mobile Apps, and all In-App Products offered in those Mobile Apps, for free. Amazon Europe Core S.a.r.l. is an Amazon Party for purposes of this Schedule.

 

1.          Amazon Underground Apps. You may submit for inclusion in Amazon Underground any of your Mobile Apps that meet the Eligibility Requirements below. We retain sole discretion over which Amazon Underground Apps we make available through Amazon Underground. Amazon Underground Apps and In-App Products end users purchase through Amazon Underground will be deemed to have been “purchased” for purposes of this Agreement (other than for purposes of calculating Royalties).

 

2.          Eligibility Requirements. You must ensure any Amazon Underground App meets the following requirements, both at the time you submit it for inclusion in Amazon Underground and throughout any period we make it available for purchase through Amazon Underground (the “Eligibility Requirements”):

 

a.          The Amazon Underground App must be available through at least one Similar Service;

 

b.          The Amazon Underground App must (i) be available for purchase for a fee on all Similar Services on which it is available or (ii) contain in-app products that are available for purchase for a fee on all Similar Services on which it is available;

 

c.          The Amazon Underground App must not contain any Subscription In-App Products;

 

d.          The Content made available through the Amazon Underground App must be substantially similar to or better than that offered to end users of the Amazon Underground App on all Similar Services on which it is available; and

 

e.          The Amazon Underground App must be available for distribution through Amazon Underground on non-Amazon devices.

 

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You will promptly notify us if, at any time, any Amazon Underground App no longer meets the Eligibility Requirements.

 

3.          Royalties.

 

a.          Subject to your compliance with the terms of this Agreement and this Schedule, the responsible Amazon Party will pay you Royalties for each Amazon Underground App calculated as follows (in lieu of the Royalties that would otherwise be payable under the Distribution Schedule): (i) the number of minutes that Amazon Underground App is used by end users (determined in accordance with Section 4 of this Schedule) while it is available for purchase through Amazon Underground and during the Wind-Down Period multiplied by (ii) the applicable Per-Minute Rate (“Underground Royalties”). The “Wind-Down Period” for an Amazon Underground App is the six-month period beginning on the date that Amazon Underground App ceases to be available for purchase through Amazon Underground.

 

b. The “Per-Minute Rate” applicable to each Amazon Marketplace is:

 

Amazon.com  $0.0020 
Amazon.co.uk  £0.0013 
Amazon.de  0.0018 
Amazon.fr  0.0018 

 

We reserve the right to change the Per-Minute Rate at any time in our discretion. Changes to the Per-Minute Rate will be effective 15 days after we post them or otherwise notify you of them.

 

c.          Subject to the payment terms of this Agreement, we will pay you Underground Royalties approximately 30 days after the end of each calendar month in which you earn Underground Royalties. If we pay you Underground Royalties and later determine any portion of those Royalties was not due to legitimate use by end users, we may offset that portion of the previously paid Underground Royalties against future Royalties or other amounts that would otherwise be payable to you, or require you to remit that amount to us.

 

d.          Underground Royalties constitute full and complete compensation for all purchases of Amazon Underground Apps and all purchases of In-App Products within Amazon Underground Apps. You are not entitled to any other Royalties or compensation for those purchases or for the usage of Amazon Underground Apps by end users.

 

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4.          Amazon Underground App Usage Measurement. Underground Royalties will be calculated based solely on usage analytics we collect and will be net of any usage we determine resulted from sources other than legitimate use by end users (such as from bots or automated software). For purposes of calculating Underground Royalties, an Amazon Underground App is “used” only while it is in the foreground and the device is actively being used by an end user (and not, for instance, while the Amazon Underground App is running in the background or the device is locked). Our determination of the usage of your Amazon Underground App will be the sole measurement of usage for purposes of calculating Underground Royalties, even if it differs from usage data you may collect. In addition, Underground Royalties are due only on usage by customers in countries where Amazon Underground is available and on devices where Amazon Underground is available.

 

5.          Additional Terms

 

a.          You authorize us to modify and add to your Amazon Underground Apps so that we can present advertisements or other notifications to end users at the time they open or close Amazon Underground Apps. We will retain all revenue associated with any such advertising or other notifications we present to end users.

 

b.          You authorize us to add an indicator (such as a “badge” or “sash”) to the logos of Amazon Underground Apps to indicate their availability through Amazon Underground.

 

c.          You will not engage in behavior intended to artificially increase usage of Amazon Underground Apps, interfere with or alter any usage or other analytics we collect from Amazon Underground Apps, or interfere or alter any advertising or other notifications we present to end users of Amazon Underground Apps.

 

d.          Other than through our In-App Purchasing API, you may not make any digital products, content, or services intended to be accessed or used within the Amazon Underground App available for purchase in your Amazon Underground App or include in your Amazon Underground App any Content that facilitates charging end users a fee in connection with your Amazon Underground App. If your Amazon Underground App contains In-App Products, those In-App Products will be available for free to end users and you will not receive any Royalties for the purchase of those In-App Products by end users.

 

6.          Withdrawal from Amazon Underground.

 

a.          Withdrawal Process. You may withdraw an Amazon Underground App from inclusion in Amazon Underground as of a specified date by giving us at least 10 business days’ prior notice. However, you may not withdraw an Amazon Underground App, materially reduce the number of countries or devices on which it is available, or terminate this Agreement during the first three months the Amazon Underground App is included in Amazon Underground, unless we decrease the Per-Minute Rate during that time period (in which case you may withdraw the Amazon Underground App as of the date the lower Per-Minute Rate goes into effect by giving us at least 5 business days’ prior notice) or (b) you withdraw the Amazon Underground App (and any similar version of the Amazon Underground App) from distribution through all Similar Services.

 

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b.          Effect of Withdrawal. We may continue to provide existing end users with access to all Amazon Underground Apps they purchased through Amazon Underground, along with any In-App Products they purchased through those Amazon Underground Apps, after those Amazon Underground Apps cease to be available for purchase through Amazon Underground. You must (i) continue providing all services and support (including server-based features) necessary to enable an Amazon Underground App’s intended functionality to end users during the Wind-Down Period (unless you discontinue providing such services and support for all versions of that Amazon Underground App that are made available on all Similar Services) and (ii) not remove or disable functionality from any Amazon Underground App or take any other action to prevent end users from accessing or using an Amazon Underground App or any In-App Products they purchased through that Amazon Underground App.

 

7.          Survival. Sections 1 and 3 through 6 of this Schedule will survive any termination of this Agreement.

 

Developer-Hosted PC Game/Software Schedule

 

The terms of this Schedule apply if you submit for sale, distribution, or promotion though the Program any PC Game or PC Software that relies on remotely-hosted services to operate (i.e., does not exclusively operate on an end user’s local device) (a “Developer- Hosted PC Game/Software”).

 

1.          Product Information; Registration Form. Your product description for any Developer-Hosted PC Game/Software must disclose any restrictions on end users’ use or access to the Developer-Hosted PC Game/Software, including if end users are required to complete a registration form (a “Registration Form”) before playing or using the Developer-Hosted PC Game/Software. If you require end users to complete a Registration Form, you must provide that Registration Form to us at the time you submit the Developer-Hosted PC Game/Software to us. The Registration Form (i) may only require registration information from the end user for the Developer-Hosted PC Game/Software and link to the Developer-Hosted PC Game/Software, (ii) must include a link to a legally sufficient privacy notice, (iii) may not contain any advertising or request any payment information from end users, and (iv) must comply with all applicable Program Policies. The Registration Form will be subject to our testing and approval, and you may not modify it following our approval without our review and approval of the modifications. You may not require end users to complete a Registration Form for any Developer-Hosted PC Game/Software with a List Price greater than $0.00.

 

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2.          Fulfillment and Support of Developer-Hosted PC Game/Software. You are responsible for all hosting, delivery, and related services necessary to deliver and enable your Developer-Hosted PC Game/Software. You will notify us at least 60 days prior to discontinuing any Developer-Hosted PC Game/Software. You agree the Royalties payable to you under the Agreement and any revenue you receive from purchases of Developer-Sold Items (defined in Section 3a of this Schedule) constitute full and complete compensation for all hosting, delivery, and other services you perform or provide in connection with the sale and fulfillment of your Developer-Hosted PC Game/Software.

 

3.          In-App Products. Any products, content, or services (including subscriptions) you make available through the Program for use in Developer-Hosted PC Game/Software is an In-App Product for purposes of this Agreement.

 

4.          Payments to Amazon for Developer-Sold Items

 

a.          Amazon Fees. If, in a Developer-Hosted PC Game/Software that has a List Price of $9.99 or less, you make any products, content, or services available for purchase other than as an In-App Product through the Program (“Developer-Sold Items”), you will pay us fees equal to 30% of the gross revenue you receive from the sale of those Developer Sold Items to end users who purchased or accessed the Developer-Hosted PC Game/Software through the Program (“Amazon Fees”). Such revenues exclude any sales or similar taxes paid by end users. Amazon Fees are due only for sales for which you have received final payment from or on behalf of an end user. If a Developer-Sold Item is purchased using a credit card or bank account deduction mechanism, final payment will be deemed to have occurred when the applicable credit card company or bank has fully settled the payment for the applicable purchase.

 

b.          Payment Terms. You will pay us Amazon Fees no later than 45 days after the end of the calendar month in which the applicable sales of Developer-Sold Items are made. At the time of payment, you will make available to us a report detailing, for each Developer-Hosted PC Game/Software, the number of end users for such Developer-Hosted PC Game/Software, the aggregate gross revenue you receive from Developer-Sold Items, and corresponding Amazon Fees. All payments will be made in the currency designated in the Program Policies. You will make payments to us via EFT or other methods we designate in the Program Policies. You are entitled to accrue and withhold payments, without interest, until the total amount due to us (net of any tax withholding, as further described in Section 3c of this Schedule) exceeds US$100.00 or the minimum payment thresholds set forth in the Program Policies.

 

c.          Taxes on Developer-Sold Items. You are responsible for collecting and remitting any taxes imposed on your sales of Developer-Sold Items to end users. We may charge and you will pay applicable Federal, state, or local sales or use taxes, consumption taxes, or value added taxes that we are legally obligated to charge for the services we provide, provided that such taxes are stated on the original invoice that we provide to you. However, you may provide us with an exemption certificate or equivalent information for those taxes acceptable to the relevant taxing authority, in which case, we shall not charge and/or collect the taxes covered by such certificate.

 

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d.          Audit. During the Term and for two years thereafter, we may examine and audit your books and records relating to any Amazon Fees payable hereunder to verify the accuracy of such payments. Any such audit must: (i) take place at a mutually agreed time during your normal business hours; (ii) not occur more than once during any 12-consecutive-month period; (iii) only cover statements rendered since the last audit conducted by us (if any); and (iv) take place on at least 30 days’ prior written notice. We will be responsible for all costs of any audit we conduct; however, if the audit reveals a deficiency greater than five percent (5%) in the amount of Amazon Fees paid to us, you will reimburse us for our audit costs.

 

5.          Survival. Sections 2 and 3 of this Schedule and any other provisions that, by their nature, are intended to survive, will survive any termination of the Agreement and you will continue to fulfill all purchases of Developer-Sold Items made prior to such termination.

 

Amazon GameCircle Schedule

 

The terms of this Schedule apply if you use the GameCircle API. “GameCircle API” means any of the Program Materials we make available to enable the use of GameCircle.

 

1.          Amazon GameCircle. “GameCircle” is our social gaming, game synchronization, and other game enhancement services that we make available for your use in connection with your Content, including without limitation leaderboards, achievements, friends, end user profiles and Sync. “Sync” is our game play synchronization service which allows for the cloud storage of game play data from Apps and the synchronizing of that data among multiple devices registered to the same Amazon customer account. If you submit an App that uses the GameCircle API, we may overlay messaging on the icon for that App to indicate the App uses GameCircle features.

 

2.          Limitations on Your Use of GameCircle. You will not (a) use GameCircle to advertise, market, or refer end users to a Similar Service, another social gaming service, or any other service that provides functionality similar to GameCircle or (b) charge end users to use any portion of GameCircle. You must ensure that any data stored using Sync does not exceed the storage capacity limits, if any, that we set for Sync. You may only use Sync to store data related to game play and game progress and must ensure that data stored by your Apps using Sync does not include any name, password, other login information, or personally identifiable information or personal data of any end user (though you may store user names, as long as you do not encourage end users to provide their actual names as their user names).

 

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3.          User Profile Pictures. You may provide us images for use by end users as profile pictures within GameCircle (“User Profile Images”). You grant us the nonexclusive, irrevocable, royalty-free, worldwide rights to use, reproduce, distribute, reformat, modify, create excerpts from, promote, advertise, transmit, make available, and publicly display and perform in any and all digital and other formats any User Profile Images you provide and to allow end users to use those User Profile Images in connection with GameCircle.

 

4.          Survival. Sections 2 and 3 and any other provisions of this Schedule that, by their nature, are intended to survive, will survive any termination of the Agreement.

 

Amazon Maps Schedule

 

The terms of this Schedule apply if you use the Maps API. “Maps API” means any of the Program Materials we make available to enable the use of mapping-related features within your Content.

 

Portions of the Maps API are provided by HERE North America, LLC or its affiliates (“HERE”) and your use of the Maps API is subject to the HERE Materials Terms and Conditions, which are available at http://developer.here.com/terms-conditions-base (the “HERE Terms”). If you access or use the Maps API (including through Amazon Maps redirection), you agree to and must comply with the HERE Terms (in addition to the terms of the Agreement), and HERE and its affiliates are third party beneficiaries of this Agreement solely for the purpose of enforcing the HERE Terms against you. Our provision of the Maps API to you constitutes a “Separate Offering” as defined in the HERE Terms. Solely with respect to HERE’s enforcement of the HERE Terms in connection with the Maps API, the HERE Terms shall govern in the event of a conflict between the HERE Terms and this Agreement.

 

Amazon Insights Schedule

 

The terms of this Schedule apply if you use the Amazon Insights API. “Amazon Insights API” means any of the Program Materials we make available to enable the use of Amazon Insights.

 

1.          Amazon Insights. “Amazon Insights” is a collection of services that we make available for you to enable you to perform A/B testing and collect and analyze data from your Content. You may only use Amazon Insights through the documented interfaces and other features we make available, and you will comply with any velocity, capacity, or other limits we establish for the use of Amazon Insights.

 

2.          Your Data. You are solely responsible for all information and data collected or stored from your Apps using Amazon Insights (“Your Data”). We may use, access, retain, and disclose Your Data in order to provide the Amazon Insights service to you, to enforce the terms of the Agreement, to comply with any request of a governmental or regulatory body (including subpoenas or court orders), and to collect, use, and share aggregated information about Amazon Insights. You give us all permissions we need to exercise these rights.

 

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3.          Privacy and Compliance with Laws. Without limiting your obligations under Section 4 of the Agreement, you must (a) ensure Your Data does not include any name, password, other login information, or personally identifiable information or personal data of any end user, (b) provide any necessary notice to, and obtain any necessary consent from, end users for the collection, use, transfer, and storage of Your Data (including by us under this Agreement), and (c) collect, use, transfer, and store Your Data in accordance with any privacy notice you provide and all applicable Laws.

 

4.          Survival. All sections of this Schedule will survive any termination of the Agreement.

 

Amazon Mobile Ads Schedule

 

The terms of this Schedule apply if you use the Amazon Mobile Ads API. “Amazon Mobile Ads API” means any of the Program Materials we make available to enable the use of our Amazon Mobile Ad Network within your Content. Your use of the Amazon Mobile Ad Network and the Amazon Mobile Ads API is governed by the Mobile Ad Network Publisher Agreement (the “Publisher Agreement”), which is available at https://developer.amazon.com/sdk/mobileads/publisher-agreement.html. In the event of a conflict between the Publisher Agreement and this Agreement with respect to the Amazon Mobile Ad Network or the Amazon Mobile Ads API, the Publisher Agreement will control.

 

Amazon Device Messaging Schedule

 

The terms of this Schedule apply if you use the Amazon Device Messaging API. “Amazon Device Messaging API” means any of the Program Materials we make available to enable the use of our Amazon Device Messaging services within your Content.

 

1.          API Keys; Credentials. You may not send messages through the Amazon Device Messaging API until we provide you an “API key” for your App. You may not share your API keys, client credentials, or access tokens (collectively, “Credentials”) with others and you are responsible for maintaining the security of your Credentials.

 

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2.          Your Responsibility for Messages. You are responsible for all messages sent using your Credentials. Those messages are “Content” and must comply with our Content Guidelines. You agree any messages sent through the Amazon Device Messaging API to end users of your App are sent by you, and not Amazon. The Amazon Device Messaging API is not intended for the transmission of sensitive customer information (e.g., social security numbers, passwords, financial account information). You are responsible for (a) any encryption or other protection necessary for the messages you send through the Amazon Device Messaging API and (b) providing any necessary notices to, or obtaining any necessary consents from, end users for the messages you send through the Amazon Device Messaging API.

 

3.          Usage Limits. We may establish size, frequency, and other limits on the messages you send using the Amazon Device Messaging API, and you will comply with those limits. We may monitor the size, frequency, and content of messages sent through the Amazon Device Messaging API.

 

4.          Survival. All sections of this Schedule will survive any termination of the Agreement.

 

Amazon Web App Resources Schedule

 

The terms of this Schedule apply if you submit Web App Content for distribution through the Program.

 

1.          Web App Content. Amazon may allow you to deliver to Amazon uniform resource locators (URLs), CSS files, HTML5 or Java Script code, or other materials that provide access to or otherwise enable web-based apps or games (“Web App Content”). You authorize us to wrap and package your Web App Content into Android-enabled APKs or other mobile app files (“Web Apps”) for distribution through the Program and to update those Web Apps from time to time as we modify the software we use to wrap and package your Web App Content. For purposes of the Agreement, (a) your Web App Content is “Content” and (b) any Web Apps we create from your Web App Content are “Mobile Apps,” except that any software we use to wrap or package your Web App Content will not be considered part of your “Mobile Apps.”

 

2.          Remote Services. For any Web App with a List Price above $0.00 or that offers any In-App Product, you must continue providing all services and support (including server-based features) necessary to enable the Web App’s intended functionality to end users (“Remote Services”) until the later of (a) the date you stop providing Remote Services to all substantially similar products you make available through any Similar Service, (b) the date one year after the last day the Web App or any In-App Product (excluding Subscription In-App Products) in the Web App was available for purchase through the Program, and (c) the date on which all Subscription In-App Products have expired. With respect to Web Apps, any online service that makes digital products (including web-based applications) similar to Web Apps available for purchase, access, or use by end users is a “Similar Service” for purposes of the Agreement.

 

3.          Survival. All sections this Schedule will survive any termination of the Agreement.

 

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Amazon Mobile Associates Schedule

 

The terms of this Schedule apply if you use the Amazon Mobile Associates API. “Amazon Mobile Associates API” means any of the Program Materials we make available to enable the use of the Amazon Services LLC Associates Program within your Content. Your use of the Amazon Services LLC Associates Program and the Amazon Mobile Associates API is governed by the Associates Program Operating Agreement (the “Operating Agreement”), which is available at https://affiliate- program.amazon.com/gp/associates/agreement/. In the event of a conflict between the Operating Agreement and this Agreement with respect to the Amazon Services LLC Associates Program or the Amazon Mobile Associates API, the Operating Agreement will control.

 

Login with Amazon Schedule

 

The terms of this Schedule apply if you use the Login with Amazon API. “Login with Amazon API” means any of the Program Materials we make available to enable the use of Login with Amazon within your Content (such materials, collectively, the “Login with Amazon API”). Your use of Login with Amazon and the Login with Amazon API is governed by the Login with Amazon Services Agreement (the “Login with Amazon Services Agreement”), which is available at https://login.amazon.com/services-agreement. In the event of a conflict between the Login with Amazon Services Agreement and this Agreement with respect to Login with Amazon or the Login with Amazon API, the Login with Amazon Services Agreement will control.

 

Firefly Schedule

 

The terms of this Schedule apply if you use the Firefly API. “Firefly API” means any of the Program Materials we make available to enable your Content to interact with or receive information from Firefly.

 

1.          Firefly. “Firefly” is our feature that allows end users to identify products, music, movies, TV shows, and other content from images and audio captured by their device. The Firefly API allows you to build Firefly-enabled Apps (“Plugins”) that access information about items identified through Firefly (“Identified Items”). Plugins also display labels in the Firefly interface (“Labels”) that allow end users to initiate actions in your App (for instance, launching your App to display upcoming concerts for the artist of a song identified through Firefly).

 

2.          Facets. The Firefly API categorizes each Identified Item and provides information about the item organized into one or more facets (“Facets”). Facets for an Identified Item indicate what type of item it is (for instance, a book, song, phone number, or Amazon product) and certain information about the item (for instance, a book Facet includes information like the book’s title, author, publisher, release date, and ISBN). Each Plugin must only access Facets directly related to functionality provided by the Plugin. You are responsible for configuring the Firefly API filters to limit the Facets your Plugins access.

 

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3.          Your Plugins. When your Plugin accesses a Facet for an Identified Item, your Plugin must display a Label for that Identified Item to the end user (even if the Label simply indicates no action is available in your Plugin for that item). Your Labels may only initiate actions that provide end users experiences that make direct use of the Facet information for the applicable Identified Item.

 

4.          Use of Firefly Information. Other than in response to an end user initiating an action for a particular Identified Item via your Label, you may not (a) use any information about Identified Items (including any Facet information) for any purpose other than to display your Label or (b) retain or transfer any information about Identified Items (including any Facet information). Without limiting your obligations under Section 4 of the Agreement, you are solely responsible for obtaining any necessary consents from end users regarding your collection, use, transfer, and storage of information provided through the Firefly API.

 

5.          Prohibited Uses. Without our prior written approval, you may not build Plugins that enable, or otherwise use the Firefly API in connection with, any marketing or sale of physical merchandise.

 

6.          Survival. All sections of this Schedule will survive any termination of the Agreement.

 

Alexa Skills Schedule

 

The terms of this Schedule apply if you submit any Alexa Skills to the Program.

 

1.          Grant of Rights. In lieu of the rights you grant to us in Section 3a of the Distribution Schedule, for each Alexa Skill, you hereby grant us the nonexclusive, irrevocable (subject to Sections 6 and 7 of the Distribution Schedule), royalty-free, worldwide right to (a) make available your Alexa Skills through the Program to end users in the Territory by all means of electronic distribution available now or in the future, (b) use, evaluate and test your Content, (c) allow end users to access and use the Alexa Skill through all devices and interfaces through which we make the Alexa Voice Services platform accessible, and (d) use, reproduce, distribute, make available, and publically perform all Content made available through the Alexa Skill. For purposes of the Agreement, providing end users access to Alexa Skills constitutes “distribution” through the Program.

 

2.          No Child-Directed Alexa Skills. Your Alexa Skills must not be directed to children under the age of 13 or interact with any user accounts or profiles you may maintain for children under the age of 13.

 

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3.          Invocation Name. We may allow end users to use particular words or sounds to initiate and interact with your Alexa Skill (an “Invocation Name”). We may allow you to suggest an Invocation Name for your Alexa Skill. Your suggestion and any ongoing use of an Invocation Name do not, on their own, grant you any right or interest in that Invocation Name, and we may change or disable the Invocation Name for your Alexa Skill at any time.

 

4.          Survival. All sections of this Schedule will survive any termination of this Agreement.

 

Changes to App Distribution and Services Agreement posted August 26, 2015

 

Developers can now submit Mobile Apps for inclusion in Amazon Underground. We’ve updated the App Distribution and Services Agreement to add terms related to Amazon Underground. Please review the full text of the updated Agreement carefully.

 

Changes to App Distribution and Services Agreement posted June 25, 2015

 

Developers can now create and submit skills for our Alexa Voice Services platform using the Alexa Skills Kit. We’ve updated the App Distribution and Services Agreement to add terms related to the distribution of Alexa Skills through our Program. Please review the full text of the updated Agreement carefully.

 

Changes to App Distribution and Services Agreement posted February 15, 2015

 

We’ve updated the App Distribution and Services Agreement to reflect the fact that developers of PC Games and PC Software can now provide List Prices on a per-country. In addition, due to the termination of the Appstore Developer Select program, we’ve deleted the provisions of the Agreement related to that program. Please review the full text of the updated Agreement carefully.

 

Changes to App Distribution and Services Agreement posted November 1, 2014

 

In order to allow end users to link their Amazon accounts together to create a shared library of digital content for their household, we’ve created the Family Library feature. We’ve updated the App Distribution and Services Agreement to add terms related to Family Library. In addition, we updated the Agreement to reflect the fact that, as of November 1, 2014, Amazon EU S.a.r.l. transferred its rights and obligations under the App Distribution and Services Agreement to Amazon Media EU S.a.r.l. Please review the full text of the updated Agreement carefully.

 

Changes to App Distribution and Services Agreement posted August 6, 2014

 

In order to allow developers to distribute test versions of their Mobile Apps to designated end users prior to making those Mobile Apps available to the general public, we've created the Live App Testing Service. We've updated the App Distribution and Services Agreement to add terms related to the Live App Testing Service. In addition, we've expanded the Agreement to cover Developer- Hosted PC Software, and made certain clarifications related to tax reporting obligations. Please review the full text of the updated Agreement carefully.

 

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Changes to App Distribution and Services Agreement posted June 18, 2014

 

In order to enable developers to build features in their Apps that use the new Firefly feature on Fire phone, we are making available the Firefly API in our portal. We’ve updated the App Distribution and Services Agreement to add terms related to the Firefly API, and to include an updated link to the HERE Materials Terms and Conditions, which apply to portions of the Amazon Maps API, in the Amazon Maps Schedule. Please review the full text of the updated Agreement carefully.

 

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