10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the Quarterly Period Ending June 30, 2020

or

☐  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number:  000-52390

Advanced Voice Recognition Systems, Inc.

(Exact name of registrant as specified in its charter)  

Nevada	98-0511932
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7659 E. Wood Drive, Scottsdale, Arizona  85260

(Address of principal executive offices)

(480) 704-4183

(Registrant's telephone number, including area code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock par value $0.001 per share	AVOI	NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months.

Yes [X] No [_]

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

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

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

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

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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 5, 2020, 280,220,268 shares of common stock are issued and outstanding.

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Advanced Voice Recognition Systems, Inc.

Table of Contents

PART I - FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements
	Unaudited Condensed Balance Sheets as of June 30, 2020 and December 31, 2019.	4
	Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2020 and 2019.	6
	Unaudited Condensed Statement of Stockholders’ Deficit for the three and six months ended June 30, 2020 and 2019	7
	Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2020 and 2019.	9
	Notes to Unaudited Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4T.	Controls and Procedures	20
PART II - OTHER INFORMATION
Item 5.	Legal Proceedings	22
Item 6.	Exhibits	22
SIGNATURES		25

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Part I. Financial Information

Item 1. Financial Statements

Advanced Voice Recognition Systems, Inc.

Condensed Balance Sheets

(Unaudited)

		June 30, 2020		December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	5,531	$	6,241
Total Current Assets		5,531		6,241
Non-Current Assets
Patent, net		21,336		28,687
Total Non-Current Assets		21,336		28,687
Total Assets	$	26,867	$	34,928
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	62,449	$	46,083
Payroll		162,382		162,382
Note Payable  AIP		19,935		19,935
Accrued Interest		10,965		10,222
Total Current Liabilities		255,731		238,622
Total Liabilities	$	255,731	$	238,622
Commitments and Contingencies
Stockholders' Deficit
Common Stock $0.001par value; 547,500,000 shares authorized
280,220,268 and 278,220,268, issued and outstanding respectively	$	280,220	$	278,220
Additional paid-in capital		7,955,200		7,936,600
Accumulated Deficit		(8,464,284)		(8,418,514)
Total Stockholders' Deficit		(228,864)		(203,694)
Total Liabilities and Stockholders' Deficit	$	26,867	$	34,928

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

4

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Advanced Voice Recognition Systems, Inc.

Condensed Statements of Operations

(Unaudited)

		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
		June 30,		June 30,		June 30,		June 30,
		2020		2019		2020		2019
Sales	$	-	$	-	$	-	$	-
Cost of goods sold		-		-		-		-
Gross profit		-		-		-		-
Operating expenses:
General and administrative:
Compensation		16		25		7,810		94
Professional fees		3,285		1,665		24,630		23,610
Office		5,414		6,673		11,479		12,406
Travel		-		277		-		378
Other		432		1,057		789		1,614
Total operating expenses		9,147		9,697		44,708		38,102
Loss from operations		(9,147)		(9,697)		(44,708)		(38,102)
Other income and (expense):
Interest expense		(563)		(1,200)		(1,062)		(2,150)
Gain From Settlement		-		3,834		-		3,834
Net other expense		(563)		2,634		(1,062)		1,684
Loss before income taxes		(9,710)		(7,063)		(45,770)		(36,418)
Provision for income taxes		-		-		-		-
Net Loss	$	(9,710)	$	(7,063)	$	(45,770)	$	(36,418)
Basic and diluted loss per common share	$	(0)	$	(0)	$	(0)	$	(0)
Weighted average number of common shares		279,857,631		274,235,157		279,764,224		270,677,712

*less than $0.01 per share

The accompanying notes are an integral part of these financial statements

6

Advanced Voice Recognition Systems, Inc.

Condensed Statement of Stockholders’ Deficit

(Unaudited)

For the period ending June 30, 2019
	Common Stock				Additional		Accumulated
	Shares		Par Value		Paid-in Capital		Deficit		Total
Balance at December 31, 2018	267,020,268	$	267,020	$	7,878,798	$	(8,350,212)	$	(204,394)
Sales of Common Stock	1,800,000		1,800		7,200				9,000
Net Loss	-		-		-		(29,355)		(29,355)
Balance at March 31, 2019	268,820,268	$	268,820	$	7,885,998	$	(8,379,567)	$	(224,749)
Sales of Common Stock	6,200,000		6,200		26,802				33,002
Net Loss	-		-		-		(7,063)		(7,063)
Balance at June 30, 2019	275,020,268	$	275,020	$	7,912,800	$	(8,386,630)	$	(198,810)

For the period ending June 30, 2020
	Common Stock				Additional		Accumulated
	Shares		Par Value		Paid-in Capital		Deficit		Total
Balance at December 31, 2019	278,220,268	$	278,220	$	7,936,600	$	(8,418,514)	$	(203,694)
Sales of Common Stock	1,500,000		1,500		13,500				15,000
Net Loss	-		-		-		(36,060)		(36,060)
Balance at March 31, 2020	279,720,268	$	279,720	$	7,950,100	$	(8,454,574)	$	(224,754)
Sales of Common Stock	500,000		500		5,100				5,600
Net Loss	-		-		-		(9,710)		(9,710)

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Balance at June 30, 2020 280,220,268    $ 280,220    $ 7,955,200    $ (8,464,284)   $ (228,864)  

The accompanying notes are an integral part of these financial statements

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Advanced Voice Recognition Systems, Inc.

Condensed Statements of Cash Flows

(Unaudited)

		Six Months Ended		Six Months Ended
		June 30,		June 30,
		2020		2019
Cash Flows from Operating Activities:
Net loss	$	(45,770)	$	(36,418)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		7,352		7,352
Gain From Settlement		-		(3,834)
Changes in operating assets:
Changes in operating liabilities:
Accounts payable and accrued liabilities		17,108		(1,079)
Net cash used in operating activities		(21,310)		(33,979)
Cash Flows from Financing Activities:
Proceeds from sale of common stock		20,600		42,002
Payments on notes payable		-		(2,500)
Payments on notes payable		-		(17,600)
Net cash provided by financing activities		20,600		21,902
Net change in cash		(710)		(12,077)
Cash at Beginning of Period		6,241		17,583
Cash at End of Period	$	5,531	$	5,506
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	743	$	1,041
Income taxes	$	-	$	-

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

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Advanced Voice Recognition Systems, Inc.

Notes to Unaudited Condensed Financial Statements

Note 1.     Nature of Operations

Company Overview

The operations of Advanced Voice Recognition Systems, Inc. (“AVRS” or the “Company”), http://www.avrsys.com, commenced in 1994 with a predecessor entity called NCC, Inc. NCC, Inc. was incorporated on March 15, 1994 in the State of Ohio. NCC, Inc. operated as a software and hardware development company that marketed voice recognition and transcription products for commercial applications.

In May 2000, WG Investments, LLC acquired the assets of NCC, Inc. and subsequently changed its name to NCC, LLC. NCC, LLC (also a predecessor to AVRS) continued the operations of NCC, Inc. until approximately December 31, 2001, when shifts in the industry’s markets caused NCC, LLC to suspend its operations.

AVRS was incorporated in the State of Colorado on July 7, 2005. In September 2005, the members of NCC, LLC transferred all of their membership interests in NCC, LLC to AVRS in exchange for 93,333,333 shares (post-recapitalization) of AVRS common stock. In December 2005, the Board of Directors approved a 1.5-to-1 stock split issuing 46,666,667 common shares (post-recapitalization), which increased the number of common shares outstanding to 140 million shares (post-capitalization). Following the incorporation of AVRS, the Company initiated a new business plan and intends to continue its operations in the voice recognition and transcription industry.

AVRS is a software development company specializing in speech recognition technologies. AVRS has successfully obtained patent protection of its proprietary technology (refer to Note 3, Intangible Assets).   The Company has currently engaged a firm to investigate and assert claims relating to certain patents including negotiating licensing agreements and the filing and prosecution of lawsuits.

Stock Purchase Agreements

During the year ended December 31, 2019 the Company entered into Stock Purchase Agreements for the private sale to six persons or entities of an aggregate of 11,200,000 shares of the common stock for aggregate proceeds of $69,002, full payment of which was received in the period. During the six months ended June 30, 2020, the Company entered into Stock Purchase Agreements for the private sale of an aggregate of 2,000,000 shares of the common stock for aggregate proceeds of $20,600 full payment of which was received in the period.

Commitments and Contingencies

On April 20, 2015 Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Material Letter Agreement with an unrelated third party  (“AIP”) in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS.  AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP.  Interest was accrued and reported at June 30, 2020.

On November 1, 2016, Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Contingent Fee Agreement (the “Agreement”) with Legal Representation pursuant to which they will represent AVRS in connection with investigating and asserting claims relating to certain patents, including the negotiation of license agreements and the filing and prosecution of lawsuits, against any potential infringers of rights associated with such patents (the “Patent Rights”).  Legal representation will handle licensing and litigation activities under the Agreement on a contingent fee basis.  The fee will depend upon whether AVRS recovers any sums by way of licensing, settlement, trial or otherwise with respect to the Patent Rights.  On June 6, 2017 AVRS and Legal Representation revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Letter Agreement which was to provide advisory services, court filing fees, discovery and other litigation costs.  The revised Contingent Fee Agreement assumed the responsibility for the costs and expenses in the Terminated August 20, 2015 Letter Agreement and provides for the payment of twenty percent (20%) of all gross Licensing Agreement Proceeds and thirty percent (30%) of all Litigation Proceeds received by AVRS.  In addition if the Litigation Proceeds agreed to or received by AVRS at any time are $100,000 or less then Legal Representative shall receive forty percent (40%) of the Litigation Proceeds.

On June 21, 2018, Advanced Voice Recognition Systems, Inc. (“AVRS”) and Buether Joe & Carpenter, LLC (“BJC) entered into a Letter of Engagement for Legal Services Limited Scope Agreement  (“Agreement”) with Schmeiser, Olsen & Watts LLP (“the Firm”) pursuant to which the Firm will serve as local counsel in the United States District Court, District of Arizona.  The Firm has been hired to represent AVRS as local counsel in connection with forthcoming litigation in the U.S. District Court, District of Arizona.    AVRS may terminate the Agreement at any time.

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On July 22, 2019 Apple, Inc. submitted a petition for Inter Partes Review (IPR) of the AVRS patent.  It was ordered in the case of AVRS, Inc. v. Apple Inc (Case No. 2-18-cv-2083) that the parties’ stipulation was granted and the case is stayed pending the resolution of the IPR proceeding.  Buether Joe and Carpenter, LLC (BJC), our representation in the AVRS v. Apple litigation will represent AVRS in the IPR. The IPR response to the Patent Trial and Appeal Board (PTAB) is due November 8, 2019.

Note 2.     Significant Accounting Policies

Unaudited Financial Information

The accompanying financial information at June 30, 2020 and for the six months ended June 30, 2020 and 2019 is unaudited.  In the opinion of management, all normal and recurring adjustments which are necessary to provide a fair presentation of the Company’s financial position at June 30, 2020 and its operating results for the six months ended June 30, 2020 and 2019 have been made.  Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2019.  The results of operations for the six months ended June 30, 2020 are not necessarily an indication of operating results to be expected for the year ending December 31, 2020.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Liabilities exceed assets and there is a capital deficiency of $228,864 and no significant revenues.  The Company may be unable to continue as a going concern for a reasonable period of time.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability.   During the twelve months ended December 31, 2019 the Company received an aggregate of $69,002 from the sale of shares in private offerings of its common stock.  During the six months ended June 30, 2020 the Company received an aggregate of $20,600 from the sale of shares in private offerings of its common stock.

The Company’s current operations are related to patent monetization and filing of additional patents.  The Company has entered into a letter agreement with Dominion Harbor Group, LLC to provide strategic advisory services to AVRS.  Dominion has agreed to advanced costs up to an aggregate of $10,000,000. On June 28, 2017 the Company and Dominion agreed to terminate the August 20, 2015 Letter Agreement.  The Company did not incur any material early termination penalties.  In addition the Company has revised the Contingent Fee Agreement with Buether Joe & Carpenter, LLC which will represent AVRS in connection with investigating and asserting claims to the AVRS patents including licensing and litigation activities. Any and all advanced costs will only become liabilities if successful.  On June 6, 2017 AVRS and BJC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement.  There is no guarantee that AVRS will be able to provide the capital required for the Company to continue as a going concern.

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at June 30, 2020 of $5,531, $6,241 at December 31, 2019.  No amounts resulted from cash equivalents.

Note 3.     Intangible and Fixed Assets

Intangible Assets

The Company monitors the anticipated outcome of legal actions, and if it determines that the success of the defense of a patent is probable, and so long as the Company believes that the future economic benefit of the patent will be increased, the Company

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capitalizes external legal costs incurred in the defense of the patent. Upon successful defense of litigation, the amounts previously capitalized are amortized over the remaining life of the patent.

On July 7, 2009, U.S. Patent # 7,558,730, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 7, 2009 and ending 20 years from the application date of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2009 and the Company began amortization.  AVRS filed a Complaint in the United States District Court Northern District for Arizona (Case No. 2-18-cv-2083) on July 3, 2018, and alleges that Apple products infringe U.S. Patent No. 7,558,730 entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” (the “‘730 Patent”).

On May 24, 2011, U.S. Patent #7,949,534, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning May 24, 2011 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended June 30, 2011 and the Company began amortization.

On March 6, 2012, U.S. Patent #8,131,557, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning March 6, 2012 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended March 31, 2012 and the Company began amortization.

On July 30, 2013, U.S. Patent #8,498,871, entitled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 30, 2013 and ending 20 years from the application date of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2013 and the Company began amortization.

On September 22, 2015, U.S. Patent #9,142,217, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning September 22, 2015 and ending 20 years from the application date of the parent application (US Patent No. 7,558,730) of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2015 and the Company began amortization.

On April 3, 2018, U.S. Patent #9,934,786, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning April 3, 2018 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001 or November 27, 2021.  The deferred costs were capitalized during the quarter ended June 30, 2018 and the Company began amortization.

Amortization at December 31, 2019 is as follows:

SCHEDULE OF INTANGIBLE ASSETS

Ended December 31, 2019
U.S. Patent #		Carrying Value		Amortization		Balance
7,558,730	$	58,277		49,266		9,011
7,949,534		3,365		2,739		626
8,131,557		5,092		4,090		1,002
8,498,871		21,114		16,247		4,867
9,142,217		35,068		24,278		10,790
9,934,786		4,575		2,184		2391
	$	127,491	$	98,804	$	28,687

Amortization at June 30, 2020 is as follows:

Ended June 30, 2020
U.S. Patent #		Carrying Value	Amortization	Balance
7,558,730	$	58,277	51,612	6,665

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7,949,534		3,365		2,895		470
8,131,557		5,092		4,352		740
8,498,871		21,114		17,512		3,602
9,142,217		35,068		26,976		8,092
9,934,786		4,575		2,808		1,767
	$	127,491	$	106,155	$	21,336

Amortization expense totaled $7,351 and $7,352 for each of the six months ended June 30, 2020 and 2019 respectively.  Estimated aggregate amortization expense for each of the next three years is as follows:

SCHEDULE OF FUTURE AMORTIZATION

Year ending June 30,
2020		7,351
2021		13,985
	$	21,336

Note 4.     Related Party Transactions

Related Parties Transactions and Indebtedness

The Company owed the officers aggregate of $162,382 at June 30, 2020 and December 31, 2019 for accrued payroll.  During the period of six months ending June 30, 2020, and June 30, 2019 the Company paid gross payroll of $7,810 and $94 to the CEO and for payroll expenses.

Note 5.Note Payable & Accounts Payable 

On April 20, 2015, the Company entered into a Material Letter Agreement with an unrelated third party AIP” in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS.  AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP. Interest was accrued and reported at June 30, 2020.

On September 24, 2018, the Company, entered into Promissory Note with Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer, and who serves as a member of our Board of Directors.  The Promissory Note is effective as of September 24, 2018 in the principal amount of $9,000 with a maturity date of the Promissory Note September 24, 2019.  Interest at 4% per annum was charged and accrued at December 31, 2018.  The Company repaid $2,500 of the note on December 10, 2018.  During 2019 the Company repaid $6,500, paying the note in full on December 27, 2019.  Interest at 4% per annum was charged and accrued at December 31, 2019.  Accrued interest of $254 was paid on February 28, 2020.

Note 6.Stockholder Equity / (Deficit) 

The Company has issued shares of its common stock pursuant to certain agreements as described in Note 1.

Note 7.    Subsequent Events

The Company does not expect to be materially impacted by COVID-19.

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

The statements contained in this Quarterly Report that are not historical are “forward-looking statements”, which can be identified by use of terms such as “may”, “could”, “should”, “expect”, “plan”, “project”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “pursue”, “target” or “continue”, the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.

The forward-looking statements contained in this 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this 10-Q are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to various factors listed in this Quarterly Report. All forward-looking statements speak only as of the date of this 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

Overview

We are a software development company headquartered in Scottsdale, Arizona. We specialize in creating interface and application solutions for speech recognition technologies. Our speech recognition software and related firmware was first introduced in 1994 at an industry trade show.  We currently have limited capital resources.  We are not currently engaged in marketing any products.  Our principal assets are our patents.  Our business strategy will be to attempt to interest other companies in entering into license agreements or other strategic relationships and to support and defend our patents through infringement and interference proceedings, as appropriate. We are currently engaged in discussions with firms that could assist us in commercialization of our intellectual assets.

Results of Operations

We completed a stock exchange on May 19, 2008 and changed our business model. We have not generated any revenue since the stock exchange and do not have any cash generating product or licensing sales.

At June 30, 2020, we had current assets of $5,531 and current liabilities of $255,731, as compared to $6,241 current assets and $238,622 in current liabilities at December 31, 2019. Our decrease in current assets is attributed to payments made to compensation. Our increase in current liabilities primarily is due to increase in Accounts Payable.

We had a net loss of $45,770 and $36,418 for the six months ended June 30, 2020 and 2019 respectively. The increase in net loss is attributable to compensation paid in the six months ended June 30, 2020.

Liquidity and Capital Resources

For the six months ended June 30, 2020, we used $21,310 of cash in operating activities and -0- in investing activities, and we received $20,600 cash from sales of our common stock. As a result, for the six months ended June 30, 2020, we recognized a $710 decrease in cash on hand. For the six months ended June 30, 2019, $33,979 cash was used in operating activities, $-0- cash in investing activities, and we received $42,002 cash from the sale of our common stock, resulting in a $12,077 decrease in cash on hand for the period.

Historically, our President has loaned or advanced to us funds for working capital on an “as needed” basis. There is no assurance that these loans or advances will continue in the future. At June 30, 2020 and December 31, 2018, we owed our officers an aggregate of $162,382 for accrued payroll.  On September 24, 2018, the Company entered into Promissory Note with Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer, and who serves as a member of our Board of Directors.  The Promissory Note is effective as of September 24, 2018 in the principal amount of $9,000 with a maturity date of the Promissory Note September 24, 2019.  Interest at 4% per annum was charged and accrued at December 31, 2018.  The Company repaid $2,500 of the note on December 10, 2018.  During 2019 the Company repaid $6,500, paying the note in full on December 27, 2019.  Interest at 4% per annum was charged and accrued at December 31, 2019.  Accrued interest of $254 was paid on February 28, 2020.  On February 1, 2019 Walter Geldenhuys advanced the Company $5,000.  On April 5, 2019 the Company repaid the advance. On August 13, 2019 Mr. Geldenhuys advanced the Company $4,000 which was repaid on August 30, 2019. On January 31, 2020 the Company advanced Walter Geldenhuys $1,000.  Mr. Geldenhuys repaid the advance on February 28, 2020.

On March 16, 2015 we entered into a letter agreement with Adapt IP Ventures, LLC (Adapt IP) confirming the retention of Adapt IP to assist us in identifying companies that might be interested in acquiring and / or licensing our patents, to attempt to negotiate

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financial terms and conditions for acquisition and / or licensing and to assist with collection of compensation from such entities.  Adapt IP will receive a success fee of 15% of net compensation received from such entities based upon Adapt IP’s efforts.  We or Adapt IP may terminate the agreement upon 30 days’ notice to the other party.

On April 20, 2015 we made a Promissory Note to Adapt IP for up to $20,000, and Adapt IP agreed to pay to our patent counsel $19,935 for patent work on our behalf.  The Note matures one year from the date of the Note.  We are obligated to repay the funds advanced by Adapt IP plus a premium of 10% of the principal amount and a percentage of proceeds received by us from any monetization event involving the patents.  If we repay the Note within the six months of the date of the Note, the percentage will be 1%, and it will be 2% after six months.  As of June 30, 2020 $10,965 interest has accrued.

On August 20, 2015, AVRS entered into a letter agreement with Dominion Harbor Group, LLC pursuant to which Dominion will provide strategic advisory services to AVRS to support the common goal of the acquisition, sale, licensing, prosecution, enforcement, and settlement with respect to AVRS’s intellectual property, including patents held by AVRS. On June 28, 2017 AVRS and Dominion agreed to terminate the August 20, 2015 Letter Agreement.  AVRS did not incur any material early termination penalties in connection of the early termination of the agreement.

On November 1, 2016, AVRS entered into a Contingent Fee Agreement with Buether Joe and Carpenter, LLC to represent AVRS in connection with investigating and asserting claims including negotiating license agreements and the filing and prosecution of lawsuits against any potential infringers of the Patent rights. On June 6, 2017 AVRS and Buether Joe and Carpenter, LLC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement.

On June 21, 2018, Advanced Voice Recognition Systems, Inc. (“AVRS”) and Buether Joe & Carpenter, LLC (“BJC) entered into a Letter of Engagement for Legal Services Limited Scope Agreement  (“Agreement”) with Schmeiser, Olsen & Watts LLP (“the Firm”) pursuant to which the Firm will serve as local counsel in the United States District Court, District of Arizona.   AVRS may terminate the Agreement at any time.

In carrying out our business strategy, we will likely continue to incur expenses in defending our patents and pursuing license agreements.  We plan to raise additional funds through future sales of our securities or other means, until such time as our revenues are sufficient to meet our cost structure, and ultimately achieve profitable operations. There is no assurance we will be successful in raising additional capital or achieving profitable operations. Our board of directors may attempt to use non-cash consideration to satisfy obligations that may consist of restricted shares of our common stock. These actions would result in dilution of the ownership interests of existing shareholders and may further dilute our common stock book value.

To obtain sufficient funds to meet our future needs for capital, we will from time to time, evaluate opportunities to raise financing through sales of our securities. However, future equity or debt financing may not be available to us at all, or if available, may not be on terms acceptable to us. We do not intend to pay dividends to shareholders in the foreseeable future.

U.S. Patent #7,558,730 expands an extremely broad base of features in speech recognition and transcription across heterogeneous protocols.  Costs totaling $58,277 have been capitalized and amortization began in the third quarter 2009.

U.S. Patent #7,949,534 is an expansion of the coverage of our second patent and incorporates speech recognition and transcription among transcription engines employing incompatible protocols.  Costs totaling $3,365 have been capitalized and amortization began in the second quarter 2011.

U.S. Patent #8,131,557 is an expansion of our second and third patent.  Costs totaling $5,092 have been capitalized and amortization began in the first quarter 2012.

U.S. Patent #8,498,871 titled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” was issued July 30, 2013 by the U.S. Patent and Trademark Office. Costs totaling $21,114 have been capitalized and amortization began in the third quarter 2013.

On September 22, 2015, Patent #9,142,217 titled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” (an expansion of our fourth patent) was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning September 22, 2015 and ending 20 years from the application date of the parent application (U.S. Patent No 7,558,730) of November 27, 2001, or November 27, 2021.  Costs totaling $35,068 have been capitalized and amortization began in the third quarter 2015.

On April 3, 2018, U.S. Patent #9,934,786 titled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning April 3, 2018 and ending 20 years from the application date of the parent application (U.S. Patent No 7,558,730) of

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November 27, 2001, or November 27, 2021.  Costs totaling $4575 have been capitalized and amortization began in the second quarter 2018.

In order for our operations to continue, we will need to generate revenues from our intended operations sufficient to meet our anticipated cost structure.

Off-Balance Sheet Arrangements

On March 16, 2015 Advanced Voice Recognition Systems, Inc. (AVRS) entered into a material Letter Agreement  with Adapt IP Ventures, LLC  (Adapt IP) in which it retained Adapt IP on an exclusive basis.  Adapt IP will assist AVRS in identifying companies that might be interested in acquiring and / or licensing the Patents, attempt to negotiate financial terms and conditions for the acquisition and /or licensing of the Patents with such Entity(ies) and assist with collection of compensation from such entities.  In connection with services provided under this Agreement, AVRS shall pay Adapt IP a success fee.

On August 20, 2015, Advanced Voice Recognition Systems, Inc. (AVRS) entered into a letter agreement with Dominion Harbor Group, LLC (Dominion) pursuant to which Dominion will provide strategic advisory services to AVRS to support the common goal of the acquisition, sale, licensing, prosecution, enforcement, and settlement with respect to AVRS’s intellectual property, including patents held by AVRS. Dominion has agreed to advance costs recommended by it, including court filing fees, discovery and other litigation costs, and patent prosecution costs, up to an aggregate of $10,000,000.   AVRS will be responsible for costs not recommended by Dominion, as well as travel and ordinary business expenses incurred by AVRS.  Except for the advanced costs by Dominion, AVRS will be responsible for any contingency payments to law firms.  On June 28, 2017 AVRS and Dominion agreed to terminate the August 20, 2015 Letter Agreement.  AVRS did not incur any material early termination penalties in connection of the early termination of the agreement.

On November 1, 2016, Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Contingent Fee Agreement (the “Agreement”) with Buether Joe & Carpenter, LLC (“BJC”) pursuant to which BJC will represent AVRS in connection with investigating and asserting claims relating to certain patents, including the negotiation of license agreements and the filing and prosecution of lawsuits, against any potential infringers of rights associated with such patents (the “Patent Rights”)  BJC will handle licensing and litigation activities under the Agreement on a contingent fee basis.  BJC’s fee will depend upon whether AVRS recovers any sums by way of licensing, settlement, trial or otherwise with respect to the Patent Rights.  On June 6, 2017 AVRS and BJC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 4.   Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer, who also is our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2019. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and is communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

We have identified, as of December 31, 2019 and 2018, a lack of segregation of duties in accounting and financial reporting activities, which we do not believe is a material weakness.  The size of our business necessarily imposes practical limitations on the effectiveness of those internal control practices and procedures that rely on the segregation of duties.  Our chief executive officer and chief financial officer work closely and review all day to day transactional activities with the secretary Treasurer.  The volume of the transactions of the Company is limited.

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Management believes this lack of segregation of duties in accounting and financial reporting did not result in material inaccuracies or omissions of material fact and, to the best of its knowledge, believes that the financial statements for the years ended December 31, 2019 and 2018 fairly present in all material respects the financial condition and results of operations for the Company in conformity with GAAP.  There is, however, a reasonable possibility that a material misstatement of the annual or interim financial statements would not have been prevented or detected as a result of this weakness.

Based on our evaluation, our chief executive officer, who also is our chief financial officer, concluded that our disclosure controls and procedures are designed at a reasonable assurance level and were fully effective as of June 30, 2020 in providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated  to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal controls over financial reporting that occurred during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 5. Legal Proceedings

On November 6, 2017 Advanced Voice Recognition Systems, Inc (AVRS) received notice that Meyers & Associates, LLC (M&A) filed Complaint number 2017CV32482 in Arapahoe County District Court on October 30, 2017. The Complaint relates to purported legal fees owed by AVRS.  On January 31, 2018 AVRS entered into a Settlement Agreement and Promissory Note with Meyers & Associates, LLC (M&A).  AVRS promises to pay the principal sum of Fifty-Two Thousand Three Hundred Eighty-Five Dollars and Forty-Six Cents ($52,385.46) as well as accrued interest. AVRS shall pay $1,000 per month on the first day of each month beginning February 1, 2018 and continuing through July 1, 2018 and pay all remaining unpaid principal and accrued interest on August 1, 2018.  All payments have been paid.

On August 1, 2018 AVRS and M&A entered into an Agreement to Amend Promissory Note. AVRS shall pay $6,000 on or before August 1, 2018, shall pay $1,500 on the first day of each month beginning September 1, 2018 and continuing through November 1, 2018 and shall pay all remaining unpaid principal and accrued interest on December 1, 2018.  All payments have been paid.

On November 21, 2018 AVRS and Meyers & Associates entered into a Second Agreement to Amend Promissory Note.  AVRS shall pay $20,000 on or before November 21, 2018, shall pay $1,500 on the first day of each month beginning January 1, 2019 and continuing through June 1, 2019 and shall pay all remaining principle and interest on July 1, 2019.  On June 7, 2019 a balloon payment of $11,046.74 was paid and the note is paid in full.

AVRS filed a Complaint in the United States District Court Northern District for Arizona (Case No. 2-18-cv-2083) on July 3, 2018, and alleges that Apple products infringe U.S. Patent No. 7,558,730 entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” (the “‘730 Patent”).  AVRS is seeking, among other things, a Judgement of infringement, past damages no less than a reasonable royalty, attorneys’ fees, pre and post Judgement interest and costs including expenses and disbursements and any other relief deemed proper by the Court.

On July 22, 2019 Apple, Inc. submitted a petition for Inter Partes Review (IPR) of the AVRS patent.  It was ordered in the case of AVRS, Inc. v. Apple Inc (Case No. 2-18-cv-2083) that the parties’ stipulation was granted and the case is stayed pending the resolution of the IPR proceeding.  Buether Joe and Carpenter, LLC (BJC), our representation in the AVRS v. Apple litigation will represent AVRS in the IPR. The IPR response to the Patent Trial and Appeal Board (PTAB) was submitted November 8, 2019.  The PTAB has instituted the IPR on some of the grounds asserted by Apple and denied institution on other grounds asserted by Apple.  This means that the IPR will proceed but only on the grounds instituted by the PTAB.  The parties are in the process of submitting expert declarations and briefs to the PTAB in connection with that review. Due to the interruption from COVID-19 the next responses are due August 2020.

Item 6. Exhibits

ITEM 6. EXHIBITS

2.1	Stock Exchange Agreement dated April 14, 2008 between Samoyed Energy Corp. and Certain Shareholders of Advanced Voice Recognition Systems, Inc. (1)
2.2	Agreement and Plan of Merger between Samoyed Energy Corp. and Advanced Voice Recognition Systems, Inc. (2)
2.3	Agreement and Plan of Merger between Advanced Voice Recognition Systems, Inc. and NCC, LLC (7)
3.1	Articles of Incorporation (3)
3.2	Certificate of Change to Articles of Incorporation (4)
3.3	Bylaws (3)
10.1	Termination Agreement dated January 22, 2008 between Samoyed Energy Corp. and 313866 Alberta Ltd. (5)
10.2	Purchase and Sale Agreement dated May 15, 2008 between Samoyed Energy Corp. and Stone Canyon Resources, Inc. (6)
10.3	Purchase Agreement dated January 19, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (9)
10.4	Purchase Agreement dated February 19, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (10)
10.5	Departure of Directors or Certain Officers dated February 26, 2016. (11)
10.6	Purchase Agreement dated March 10, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (12)
10.7	Purchase Agreement dated March 10, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (13)
10.8	Purchase Agreement dated March 22, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (14)
10.9	Purchase Agreement dated July 14, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (15)
10.10	Purchase Agreement dated September 19, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (16)
10.11	Purchase Agreement dated October 11, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (17)
10.12	Purchase Agreement dated October 21, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (18)
10.13	Letter Agreement dated November 1, 2016 between Advanced Voice Recognition Systems, Inc. and BJC. (19)
10.14	Purchase Agreement dated November 16, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (20)

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10.15	Purchase Agreement dated December 14, 2016 between Advanced Voice Recognition Systems, Inc. and an Investor. (21)
10.16	Purchase Agreement dated January 12, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (22)
10.17	Purchase Agreement dated February 3, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (23)
10.18	Purchase Agreement dated February 21, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (24)
10.19	Purchase Agreement dated February 27, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (25)
10.20	Purchase Agreement dated March 23, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (26)
10.21	Letter Agreement March 31, 2017 between Advanced Voice Recognition Systems, Inc. and Schmeiser (27)
10.22	Purchase Agreement dated April 14, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (28)
10.23	Purchase Agreement dated May 1, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (29)
10.24	Purchase Agreement dated May 1, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (30)
10.25	Purchase Agreement dated May 4, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (31)
10.26	Purchase Agreement dated June 5, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (32)
10.27	Purchase Agreement dated June 19, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (33)
10.28	Letter of Termination dated June 28, 2017 between Advanced Voice Recognition Systems, Inc. and Dominion (34)
10.29	Purchase Agreement dated October 26, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (35)
10.30	Purchase Agreement dated November 9, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (36)
10.31	Purchase Agreement dated December 20, 2017 between Advanced Voice Recognition Systems, Inc. and an Investor. (37)
10.32	Purchase Agreement dated January 21, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (38)
10.33	Purchase Agreement dated February 21, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (39)
10.34	Purchase Agreement dated March 6, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (40)
10.35	Purchase Agreement dated March 19, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (41)
10.36	Purchase Agreement dated April 5, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (42)
10.37	Purchase Agreement dated April 30, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (43)
10.38	Purchase Agreement dated April 30, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (44)
10.39	Purchase Agreement dated May 18, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (45)
10.40	Letter Agreement dated June 21, 2018 between Advanced Voice Recognition Systems, Inc. and Schmeiser (46)
10.41	Purchase Agreement dated July 17, 2018 between Advanced Voice Recognition Systems, Inc. and an Investor. (47)
10.42	Letter Agreement dated August 1, 2018 between Advanced Voice Recognition Systems, Inc. and Meyers & Associate. (48)
10.43	Letter Agreement dated September 24, 2018 between Advanced Voice Recognition Systems, Inc. and W. Geldenhuys. (49)
10.44	Purchase Agreement dated November 14, 2018 between Advanced Voice Recognition Systems, Inc and an Investor (50)
10.45	Letter Agreement dated December 10, 2018 between Advanced Voice Recognition Systems, Inc and Meyers & Associate (51)
10.46	Purchase Agreement dated March 27, 2019 between Advanced Voice Recognition Systems, Inc and an Investor (52)
10.47	Purchase Agreement dated March 27, 2019 between Advanced Voice Recognition Systems, Inc and an Investor (53)
10.48	Purchase Agreement dated March 27, 2019 between Advanced Voice Recognition Systems, Inc and an Investor (54)
10.49	Purchase Agreement dated April 5, 2019 between Advanced Voice Recognition Systems, Inc and an Investor (55)
10.50	Purchase Agreement dated May 1, 2019 between Advanced Voice Recognition Systems, Inc. and an Investor (56)
10.51	Purchase Agreement dated May 1, 2019 between Advanced Voice Recognition Systems, Inc. and an Investor (57)
10.52	Other Event dated July 22, 2019 (58)
10.53	Purchase Agreement dated August 29, 2019 between Advanced Voice Recognition Systems, Inc. and an Investor (59)
10.54	Purchase Agreement dated December 4, 2019 between Advanced Voice Recognition Systems, Inc and an Investor (60)
10.55	Purchase Agreement dated December 4, 2019 between Advanced Voice Recognition Systems, Inc and an Investor (61)
10.56	Purchase Agreement dated January 2, 2020 between Advanced Voice Recognition Systems, Inc and an Investor (62)
10.57	Purchase Agreement dated January 3, 2020 between Advanced Voice Recognition Systems, Inc. and an Investor (63)
10.58	Purchase Agreement dated June 5, 2020 between Advanced Voice Recognition Systems, Inc and an Investor (64)
14.1	Code of Ethics (7)
21.1	Subsidiaries of the Registrant (7)
31.1	Section 302 Certification – Principal Executive Officer (8)
31.2	Section 302 Certification – Principal Financial Officer (8)
32.1	Section 906 Certification (8)

(1)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 1, 2008.

(2)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 10, 2008.

(3)     Incorporated by reference from the Company’s Registration Statement on Form SB-2 filed on October 31, 2005.

(4)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 18, 2007.

(5)     Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on February 14, 2008.

(6)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 21, 2008.

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(7)      Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 30, 2009 

(8)      Certifications 

(9)     Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 25, 2016

(10)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 23, 2016

(11)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 1, 2016

(12)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 14, 2016

(13)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 14, 2016

(14)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 22, 2016 

(15)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 19, 2016

(16)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 19, 2016 

(17)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 17, 2016 

(18)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 25, 2016 

(19)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 7, 2016 

(20)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 21, 2016 

(21)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 14, 2016 

(22)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 13, 2017 

(23)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 8, 2017 

(24)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 27, 2017 

(25)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 3, 2017 

(26)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 28, 2017 

(27)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 4, 2017 

(28)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 18, 2017

(29)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 4, 2017 

(30)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 4, 2017 

(31)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 8, 2017

(32)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 8, 2017  

(33)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 22, 2017

(34)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 28, 2017  

(35)    Incorporated by reference from the Company’s Current Report on Form 8-K filed on October 27, 2017

(36)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 13, 2017

(37)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 21, 2017

(38)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 23, 2018

(39)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on February 23, 2018

(40)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 9, 2018

(41)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on March 21, 2018

(42)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 9, 2018

(43)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 1, 2018

(44)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 1, 2018

(45)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 21, 2018

(46)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 28, 2018

(47)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 20, 2018

(48)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on August 6, 2018

(49)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 28, 2018

(50)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 20, 2018

(51)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 13, 2018

(52)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 2, 2019

(53)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 2, 2019

(54)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 2, 2019

(55)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 16, 2019

(56)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 7, 2019

(57)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on May 7, 2019

(58)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 29, 2019

(59)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on August 30, 2019

(60)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 10, 2019

(61)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on December 10, 2019

(62)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 7, 2020

(63)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 7, 2020

(64)   Incorporated by reference from the Company’s Current Report on Form 8-K filed on June 10, 2020

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ADVANCED VOICE RECOGNITION SYSTEMS, INC.
Dated August 6, 2020	By:	/s/ Walter Geldenhuys
		Walter Geldenhuys
		President, Chief Executive Officer, and Chief Financial Officer (Principal Executive Officer)
Dated August 6, 2020	By:	/s/ Diane Jakowchuk
		Diane Jakowchuk
		Secretary, Treasurer and Principal Accounting Officer (Principal Accounting Officer)

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EX-31

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EX-31

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EX-32

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 05, 2020
Details
Registrant CIK	0001342936
Fiscal Year End	--12-31
Registrant Name	Advanced Voice Recognition Systems, Inc.
SEC Form	10-Q
Period End date	Jun. 30, 2020
Trading Symbol	AVOI
Trading Exchange	NONE
Tax Identification Number (TIN)	98-0511932
Number of common stock shares outstanding		280,220,268
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	true
Small Business	true
Emerging Growth Company	true
Ex Transition Period	false
Document Transition Report	false
Entity File Number	000-52390
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	7659 E. Wood Drive,
Entity Address, City or Town	Scottsdale,
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85260
City Area Code	(480)
Local Phone Number	704-4183
Title of 12(b) Security	Common Stock par value $0.001 per share
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Document Quarterly Report	true

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Balance Sheets (June 30, 2020) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 5,531	$ 6,241
Total Current Assets	5,531	6,241
Non-Current Assets
Patent, net	21,336	28,687
Total Non-Current Assets	21,336	28,687
Total Assets	26,867	34,928
Current Liabilities
Accounts payable	62,449	46,083
Payroll	162,382	162,382
Note Payable AIP	19,935	19,935
Accrued Interest	10,965	10,222
Total Current Liabilities	255,731	238,622
Stockholders' Deficit
Common stock	280,220	278,220
Additional paid-in capital	7,955,200	7,936,600
Accumulated Deficit	(8,464,284)	(8,418,514)
Total Stockholders' Deficit	(228,864)	(203,694)
Total Liabilities and Stockholders' Deficit	26,867	34,928
Total Liabilities	$ 255,731	$ 238,622

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Balance Sheets (June 30, 2020) - Parenthetical - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Details
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	547,500,000	547,500,000
Common Stock, Shares, Issued	280,220,268	280,220,268
Common Stock, Shares, Outstanding	278,220,268	278,220,268

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Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Details
Sales	$ 0	$ 0	$ 0	$ 0
Cost of goods sold	0	0	0	0
Gross profit	0	0	0	0
Operating expenses:
Compensation	16	25	7,810	94
Professional fees	3,285	1,665	24,630	23,610
Office	5,414	6,673	11,479	12,406
Travel	0	277	0	378
Other	432	1,057	789	1,614
Total operating expenses	9,147	9,697	44,708	38,102
Loss from operations	(9,147)	(9,697)	(44,708)	(38,102)
Other income and (expense):
Interest expense	(563)	(1,200)	(1,062)	(2,150)
Gain From Settlement	0	3,834	0	3,834
Net other expense	(563)	2,634	(1,062)	1,684
Loss before income taxes	(9,710)	(7,063)	(45,770)	(36,418)
Provision for income taxes	0	0	0	0
Net Loss	$ (9,710)	$ (7,063)	$ (45,770)	$ (36,418)
Basic and diluted loss per common share	$ 0	$ 0	$ 0	$ 0
Weighted average number of common shares	279,857,631	274,235,157	279,764,224	270,677,712

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Statement of Stockholders' Deficit - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	$ 267,020	$ 7,878,798	$ (8,350,212)	$ (204,394)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	267,020,268
Stock Issued During Period, Value, Purchase of Assets	$ 1,800	7,200		9,000
Stock Issued During Period, Shares, Purchase of Assets	1,800,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(29,355)	(29,355)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2019	$ 268,820	7,885,998	(8,379,567)	(224,749)
Shares, Outstanding, Ending Balance at Mar. 31, 2019	268,820,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	$ 267,020	7,878,798	(8,350,212)	(204,394)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	267,020,268
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest				(36,418)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019	$ 275,020	7,912,800	(8,386,630)	(198,810)
Shares, Outstanding, Ending Balance at Jun. 30, 2019	275,020,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2019	$ 268,820	7,885,998	(8,379,567)	(224,749)
Shares, Outstanding, Beginning Balance at Mar. 31, 2019	268,820,268
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(7,063)	(7,063)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019	$ 275,020	7,912,800	(8,386,630)	(198,810)
Shares, Outstanding, Ending Balance at Jun. 30, 2019	275,020,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019	$ 278,220	7,936,600	(8,418,514)	(203,694)
Shares, Outstanding, Beginning Balance at Dec. 31, 2019	278,220,268
Stock Issued During Period, Value, Purchase of Assets	$ 1,500	13,500		15,000
Stock Issued During Period, Shares, Purchase of Assets	1,500,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(36,060)	(36,060)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2020	$ 279,720	7,950,100	(8,454,574)	(224,754)
Shares, Outstanding, Ending Balance at Mar. 31, 2020	279,720,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019	$ 278,220	7,936,600	(8,418,514)	(203,694)
Shares, Outstanding, Beginning Balance at Dec. 31, 2019	278,220,268
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest				(45,770)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020	$ 280,220	7,955,200	(8,464,284)	(228,864)
Shares, Outstanding, Ending Balance at Jun. 30, 2020	280,220,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2020	$ 279,720	7,950,100	(8,454,574)	(224,754)
Shares, Outstanding, Beginning Balance at Mar. 31, 2020	279,720,268
Stock Issued During Period, Value, Purchase of Assets	$ 500	5,100		5,600
Stock Issued During Period, Shares, Purchase of Assets	500,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(9,710)	(9,710)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020	$ 280,220	$ 7,955,200	$ (8,464,284)	$ (228,864)
Shares, Outstanding, Ending Balance at Jun. 30, 2020	280,220,268

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Statement of Stockholders Deficit (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	$ 267,020	$ 7,878,798	$ (8,350,212)	$ (204,394)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	267,020,268
Stock Issued During Period, Value, Purchase of Assets	$ 1,800	7,200		9,000
Stock Issued During Period, Shares, Purchase of Assets	1,800,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(29,355)	(29,355)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2019	$ 268,820	7,885,998	(8,379,567)	(224,749)
Shares, Outstanding, Ending Balance at Mar. 31, 2019	268,820,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	$ 267,020	7,878,798	(8,350,212)	(204,394)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	267,020,268
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest				(36,418)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019	$ 275,020	7,912,800	(8,386,630)	(198,810)
Shares, Outstanding, Ending Balance at Jun. 30, 2019	275,020,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2019	$ 268,820	7,885,998	(8,379,567)	(224,749)
Shares, Outstanding, Beginning Balance at Mar. 31, 2019	268,820,268
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(7,063)	(7,063)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019	$ 275,020	7,912,800	(8,386,630)	(198,810)
Shares, Outstanding, Ending Balance at Jun. 30, 2019	275,020,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019	$ 278,220	7,936,600	(8,418,514)	(203,694)
Shares, Outstanding, Beginning Balance at Dec. 31, 2019	278,220,268
Stock Issued During Period, Value, Purchase of Assets	$ 1,500	13,500		15,000
Stock Issued During Period, Shares, Purchase of Assets	1,500,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(36,060)	(36,060)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2020	$ 279,720	7,950,100	(8,454,574)	(224,754)
Shares, Outstanding, Ending Balance at Mar. 31, 2020	279,720,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019	$ 278,220	7,936,600	(8,418,514)	(203,694)
Shares, Outstanding, Beginning Balance at Dec. 31, 2019	278,220,268
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest				(45,770)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020	$ 280,220	7,955,200	(8,464,284)	(228,864)
Shares, Outstanding, Ending Balance at Jun. 30, 2020	280,220,268
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2020	$ 279,720	7,950,100	(8,454,574)	(224,754)
Shares, Outstanding, Beginning Balance at Mar. 31, 2020	279,720,268
Stock Issued During Period, Value, Purchase of Assets	$ 500	5,100		5,600
Stock Issued During Period, Shares, Purchase of Assets	500,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 0	0	(9,710)	(9,710)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020	$ 280,220	$ 7,955,200	$ (8,464,284)	$ (228,864)
Shares, Outstanding, Ending Balance at Jun. 30, 2020	280,220,268

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Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities:
Net loss	$ (45,770)	$ (36,418)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation	7,352	7,352
Changes in operating liabilities:
Accounts payable and accrued liabilities	17,108	(1,079)
Gain From Settlement	0	(3,834)
Net cash used in operating activities	(21,310)	(33,979)
Cash Flows from Financing Activities:
Proceeds from sale of common stock	20,600	42,002
Payments on notes payable	0	(2,500)
Payments on notes payable	0	(17,600)
Net cash provided by financing activities	20,600	21,902
Net change in cash	(710)	(12,077)
Cash and Cash Equivalents, at Carrying Value, Beginning Balance	6,241	17,583
Cash and Cash Equivalents, at Carrying Value, Ending Balance	5,531	5,506
Supplemental Disclosure of Cash Flow Information:
Interest	743	1,041
Income taxes	$ 0	$ 0

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Note 1. Nature of Operations

6 Months Ended

Jun. 30, 2020

Notes

Note 1. Nature of Operations

Note 1.     Nature of Operations

Company Overview

The operations of Advanced Voice Recognition Systems, Inc. (“AVRS” or the “Company”), http://www.avrsys.com, commenced in 1994 with a predecessor entity called NCC, Inc. NCC, Inc. was incorporated on March 15, 1994 in the State of Ohio. NCC, Inc. operated as a software and hardware development company that marketed voice recognition and transcription products for commercial applications.

In May 2000, WG Investments, LLC acquired the assets of NCC, Inc. and subsequently changed its name to NCC, LLC. NCC, LLC (also a predecessor to AVRS) continued the operations of NCC, Inc. until approximately December 31, 2001, when shifts in the industry’s markets caused NCC, LLC to suspend its operations.

AVRS was incorporated in the State of Colorado on July 7, 2005. In September 2005, the members of NCC, LLC transferred all of their membership interests in NCC, LLC to AVRS in exchange for 93,333,333 shares (post-recapitalization) of AVRS common stock. In December 2005, the Board of Directors approved a 1.5-to-1 stock split issuing 46,666,667 common shares (post-recapitalization), which increased the number of common shares outstanding to 140 million shares (post-capitalization). Following the incorporation of AVRS, the Company initiated a new business plan and intends to continue its operations in the voice recognition and transcription industry.

AVRS is a software development company specializing in speech recognition technologies. AVRS has successfully obtained patent protection of its proprietary technology (refer to Note 3, Intangible Assets).   The Company has currently engaged a firm to investigate and assert claims relating to certain patents including negotiating licensing agreements and the filing and prosecution of lawsuits.

Stock Purchase Agreements

During the year ended December 31, 2019 the Company entered into Stock Purchase Agreements for the private sale to six persons or entities of an aggregate of 11,200,000 shares of the common stock for aggregate proceeds of $69,002, full payment of which was received in the period. During the six months ended June 30, 2020, the Company entered into Stock Purchase Agreements for the private sale of an aggregate of 2,000,000 shares of the common stock for aggregate proceeds of $20,600 full payment of which was received in the period.

Commitments and Contingencies

On April 20, 2015 Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Material Letter Agreement with an unrelated third party  (“AIP”) in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS.  AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP.  Interest was accrued and reported at June 30, 2020.

On November 1, 2016, Advanced Voice Recognition Systems, Inc. (“AVRS”) entered into a Contingent Fee Agreement (the “Agreement”) with Legal Representation pursuant to which they will represent AVRS in connection with investigating and asserting claims relating to certain patents, including the negotiation of license agreements and the filing and prosecution of lawsuits, against any potential infringers of rights associated with such patents (the “Patent Rights”).  Legal representation will handle licensing and litigation activities under the Agreement on a contingent fee basis.  The fee will depend upon whether AVRS recovers any sums by way of licensing, settlement, trial or otherwise with respect to the Patent Rights.  On June 6, 2017 AVRS and Legal Representation revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Letter Agreement which was to provide advisory services, court filing fees, discovery and other litigation costs.  The revised Contingent Fee Agreement assumed the responsibility for the costs and expenses in the Terminated August 20, 2015 Letter Agreement and provides for the payment of twenty percent (20%) of all gross Licensing Agreement Proceeds and thirty percent (30%) of all Litigation Proceeds received by AVRS.  In addition if the Litigation Proceeds agreed to or received by AVRS at any time are $100,000 or less then Legal Representative shall receive forty percent (40%) of the Litigation Proceeds.

On June 21, 2018, Advanced Voice Recognition Systems, Inc. (“AVRS”) and Buether Joe & Carpenter, LLC (“BJC) entered into a Letter of Engagement for Legal Services Limited Scope Agreement  (“Agreement”) with Schmeiser, Olsen & Watts LLP (“the Firm”) pursuant to which the Firm will serve as local counsel in the United States District Court, District of Arizona.  The Firm has been hired to represent AVRS as local counsel in connection with forthcoming litigation in the U.S. District Court, District of Arizona.    AVRS may terminate the Agreement at any time.

On July 22, 2019 Apple, Inc. submitted a petition for Inter Partes Review (IPR) of the AVRS patent.  It was ordered in the case of AVRS, Inc. v. Apple Inc (Case No. 2-18-cv-2083) that the parties’ stipulation was granted and the case is stayed pending the resolution of the IPR proceeding.  Buether Joe and Carpenter, LLC (BJC), our representation in the AVRS v. Apple litigation will represent AVRS in the IPR. The IPR response to the Patent Trial and Appeal Board (PTAB) is due November 8, 2019.

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Note 2. Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Notes

Note 2. Significant Accounting Policies

Note 2.     Significant Accounting Policies

Unaudited Financial Information

The accompanying financial information at June 30, 2020 and for the six months ended June 30, 2020 and 2019 is unaudited.  In the opinion of management, all normal and recurring adjustments which are necessary to provide a fair presentation of the Company’s financial position at June 30, 2020 and its operating results for the six months ended June 30, 2020 and 2019 have been made.  Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2019.  The results of operations for the six months ended June 30, 2020 are not necessarily an indication of operating results to be expected for the year ending December 31, 2020.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Liabilities exceed assets and there is a capital deficiency of $228,864 and no significant revenues.  The Company may be unable to continue as a going concern for a reasonable period of time.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability.   During the twelve months ended December 31, 2019 the Company received an aggregate of $69,002 from the sale of shares in private offerings of its common stock.  During the six months ended June 30, 2020 the Company received an aggregate of $20,600 from the sale of shares in private offerings of its common stock.

The Company’s current operations are related to patent monetization and filing of additional patents.  The Company has entered into a letter agreement with Dominion Harbor Group, LLC to provide strategic advisory services to AVRS.  Dominion has agreed to advanced costs up to an aggregate of $10,000,000. On June 28, 2017 the Company and Dominion agreed to terminate the August 20, 2015 Letter Agreement.  The Company did not incur any material early termination penalties.  In addition the Company has revised the Contingent Fee Agreement with Buether Joe & Carpenter, LLC which will represent AVRS in connection with investigating and asserting claims to the AVRS patents including licensing and litigation activities. Any and all advanced costs will only become liabilities if successful.  On June 6, 2017 AVRS and BJC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement.  There is no guarantee that AVRS will be able to provide the capital required for the Company to continue as a going concern.

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at June 30, 2020 of $5,531, $6,241 at December 31, 2019.  No amounts resulted from cash equivalents.

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Note 3. Intangible and Fixed Assets

6 Months Ended

Jun. 30, 2020

Notes

Note 3. Intangible and Fixed Assets

Note 3.     Intangible and Fixed Assets

Intangible Assets

The Company monitors the anticipated outcome of legal actions, and if it determines that the success of the defense of a patent is probable, and so long as the Company believes that the future economic benefit of the patent will be increased, the Company

capitalizes external legal costs incurred in the defense of the patent. Upon successful defense of litigation, the amounts previously capitalized are amortized over the remaining life of the patent.

On July 7, 2009, U.S. Patent # 7,558,730, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 7, 2009 and ending 20 years from the application date of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2009 and the Company began amortization.  AVRS filed a Complaint in the United States District Court Northern District for Arizona (Case No. 2-18-cv-2083) on July 3, 2018, and alleges that Apple products infringe U.S. Patent No. 7,558,730 entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols” (the “‘730 Patent”).

On May 24, 2011, U.S. Patent #7,949,534, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning May 24, 2011 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended June 30, 2011 and the Company began amortization.

On March 6, 2012, U.S. Patent #8,131,557, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning March 6, 2012 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended March 31, 2012 and the Company began amortization.

On July 30, 2013, U.S. Patent #8,498,871, entitled “Dynamic Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning on July 30, 2013 and ending 20 years from the application date of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2013 and the Company began amortization.

On September 22, 2015, U.S. Patent #9,142,217, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office. In accordance with 35 U.S.C. 154, the patent shall be for a term beginning September 22, 2015 and ending 20 years from the application date of the parent application (US Patent No. 7,558,730) of November 27, 2001, or November 27, 2021.  The deferred fees were capitalized during the quarter ended September 30, 2015 and the Company began amortization.

On April 3, 2018, U.S. Patent #9,934,786, entitled “Speech Recognition and Transcription Among Users Having Heterogeneous Protocols,” was issued by the U.S. Patent and Trademark Office.  In accordance with 35 U.S.C. 154, the patent shall be for a term beginning April 3, 2018 and ending 20 years from the application date of the parent application (U.S. Patent #7,558,730) of November 27, 2001 or November 27, 2021.  The deferred costs were capitalized during the quarter ended June 30, 2018 and the Company began amortization.

Amortization at December 31, 2019 is as follows:

SCHEDULE OF INTANGIBLE ASSETS

Ended December 31, 2019
U.S. Patent #		Carrying Value		Amortization		Balance
7,558,730	$	58,277		49,266		9,011
7,949,534		3,365		2,739		626
8,131,557		5,092		4,090		1,002
8,498,871		21,114		16,247		4,867
9,142,217		35,068		24,278		10,790
9,934,786		4,575		2,184		2391
	$	127,491	$	98,804	$	28,687

Amortization at June 30, 2020 is as follows:

Ended June 30, 2020
U.S. Patent #		Carrying Value	Amortization	Balance
7,558,730	$	58,277	51,612	6,665

7,949,534		3,365		2,895		470
8,131,557		5,092		4,352		740
8,498,871		21,114		17,512		3,602
9,142,217		35,068		26,976		8,092
9,934,786		4,575		2,808		1,767
	$	127,491	$	106,155	$	21,336

Amortization expense totaled $7,351 and $7,352 for each of the six months ended June 30, 2020 and 2019 respectively.  Estimated aggregate amortization expense for each of the next three years is as follows:

SCHEDULE OF FUTURE AMORTIZATION

Year ending June 30,
2020		7,351
2021		13,985
	$	21,336

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Note 4. Related Party Transactions

6 Months Ended

Jun. 30, 2020

Notes

Note 4. Related Party Transactions

Note 4.     Related Party Transactions

Related Parties Transactions and Indebtedness

The Company owed the officers aggregate of $162,382 at June 30, 2020 and December 31, 2019 for accrued payroll.  During the period of six months ending June 30, 2020, and June 30, 2019 the Company paid gross payroll of $7,810 and $94 to the CEO and for payroll expenses.

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Note 5. Note Payable & Accounts Payable

6 Months Ended

Jun. 30, 2020

Notes

Note 5. Note Payable & Accounts Payable

Note 5.Note Payable & Accounts Payable 

On April 20, 2015, the Company entered into a Material Letter Agreement with an unrelated third party AIP” in which they promise to pay to patent legal counsel funds to continue prosecuting Patents on behalf of AVRS.  AVRS promises to pay AIP, or to such other holder of this promissory note (Note) as designate, the principal, together with a premium of ten percent (10%) of Principle and two percent (2%) of proceeds received by Company from a Monetization Event initiated by AIP. Interest was accrued and reported at June 30, 2020.

On September 24, 2018, the Company, entered into Promissory Note with Walter Geldenhuys, who is our President, Chief Executive Officer and Chief Financial Officer, and who serves as a member of our Board of Directors.  The Promissory Note is effective as of September 24, 2018 in the principal amount of $9,000 with a maturity date of the Promissory Note September 24, 2019.  Interest at 4% per annum was charged and accrued at December 31, 2018.  The Company repaid $2,500 of the note on December 10, 2018.  During 2019 the Company repaid $6,500, paying the note in full on December 27, 2019.  Interest at 4% per annum was charged and accrued at December 31, 2019.  Accrued interest of $254 was paid on February 28, 2020.

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Note 6. Stockholder Equity / (Deficit)

6 Months Ended

Jun. 30, 2020

Notes

Note 6. Stockholder Equity / (Deficit)

Note 6.Stockholder Equity / (Deficit) 

The Company has issued shares of its common stock pursuant to certain agreements as described in Note 1.

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Note 7. Subsequent Events

6 Months Ended

Jun. 30, 2020

Notes

Note 7. Subsequent Events

Note 7.    Subsequent Events

The Company does not expect to be materially impacted by COVID-19.

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Note 2. Significant Accounting Policies: Going Concern (Policies)

6 Months Ended

Jun. 30, 2020

Policies

Going Concern

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Liabilities exceed assets and there is a capital deficiency of $228,864 and no significant revenues.  The Company may be unable to continue as a going concern for a reasonable period of time.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability.   During the twelve months ended December 31, 2019 the Company received an aggregate of $69,002 from the sale of shares in private offerings of its common stock.  During the six months ended June 30, 2020 the Company received an aggregate of $20,600 from the sale of shares in private offerings of its common stock.

The Company’s current operations are related to patent monetization and filing of additional patents.  The Company has entered into a letter agreement with Dominion Harbor Group, LLC to provide strategic advisory services to AVRS.  Dominion has agreed to advanced costs up to an aggregate of $10,000,000. On June 28, 2017 the Company and Dominion agreed to terminate the August 20, 2015 Letter Agreement.  The Company did not incur any material early termination penalties.  In addition the Company has revised the Contingent Fee Agreement with Buether Joe & Carpenter, LLC which will represent AVRS in connection with investigating and asserting claims to the AVRS patents including licensing and litigation activities. Any and all advanced costs will only become liabilities if successful.  On June 6, 2017 AVRS and BJC revised the Contingent Fee Agreement as it related to the termination of the August 20, 2015 Dominion Harbor Letter Agreement.  There is no guarantee that AVRS will be able to provide the capital required for the Company to continue as a going concern.

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Note 2. Significant Accounting Policies: Use of Estimates (Policies)

6 Months Ended

Jun. 30, 2020

Policies

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Note 2. Significant Accounting Policies: Cash and Cash Equivalents (Policies)

6 Months Ended

Jun. 30, 2020

Policies

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at June 30, 2020 of $5,531, $6,241 at December 31, 2019.  No amounts resulted from cash equivalents.

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Note 3. Intangible and Fixed Assets: Schedule of Amortization of Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2020

Tables/Schedules

Schedule of Amortization of Intangible Assets

SCHEDULE OF INTANGIBLE ASSETS

Ended December 31, 2019
U.S. Patent #		Carrying Value		Amortization		Balance
7,558,730	$	58,277		49,266		9,011
7,949,534		3,365		2,739		626
8,131,557		5,092		4,090		1,002
8,498,871		21,114		16,247		4,867
9,142,217		35,068		24,278		10,790
9,934,786		4,575		2,184		2391
	$	127,491	$	98,804	$	28,687

Amortization at June 30, 2020 is as follows:

Ended June 30, 2020
U.S. Patent #		Carrying Value	Amortization	Balance
7,558,730	$	58,277	51,612	6,665

7,949,534		3,365		2,895		470
8,131,557		5,092		4,352		740
8,498,871		21,114		17,512		3,602
9,142,217		35,068		26,976		8,092
9,934,786		4,575		2,808		1,767
	$	127,491	$	106,155	$	21,336

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Note 3. Intangible and Fixed Assets: Schedule of Future Amortization (Tables)

6 Months Ended

Jun. 30, 2020

Tables/Schedules

Schedule of Future Amortization

SCHEDULE OF FUTURE AMORTIZATION

Year ending June 30,
2020		7,351
2021		13,985
	$	21,336

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Note 2. Significant Accounting Policies: Going Concern (Details) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Details
Total Stockholders' Deficit	$ (228,864)		$ (203,694)
Proceeds from sale of common stock	$ 20,600	$ 42,002	$ 69,002

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Note 2. Significant Accounting Policies: Cash and Cash Equivalents (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Details
Cash and cash equivalents	$ 5,531	$ 6,241	$ 5,506	$ 17,583

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Note 3. Intangible and Fixed Assets: Schedule of Amortization of Intangible Assets (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
U.S. Patent # 7,558,730
Carrying Value	$ 58,277	$ 58,277
Amortization	51,612	49,266
Balance	6,665	9,011
U.S. Patent # 7,949,534
Carrying Value	3,365	3,365
Amortization	2,895	2,739
Balance	470	626
U.S. Patent # 8,131,557
Carrying Value	5,092	5,092
Amortization	4,352	4,090
Balance	740	1,002
U.S. Patent # 8,498,871
Carrying Value	21,114	21,114
Amortization	17,512	16,247
Balance	3,602	4,867
U.S. Patent # 9,142,217
Carrying Value	35,068	35,068
Amortization	26,976	24,278
Balance	8,092	10,790
U.S. Patent # 9,934,786
Carrying Value	4,575	4,575
Amortization	2,808	2,184
Balance	$ 1,767	$ 2,391

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Note 3. Intangible and Fixed Assets: Schedule of Future Amortization (Details)	Jun. 30, 2020 USD ($)
Details
2020	$ 7,351
2021	13,985
Balance	$ 21,336

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Note 4. Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Details
Compensation	$ 16	$ 25	$ 7,810	$ 94

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Label	Element	Value
Stock Issued During Period, Value, Purchase of Assets	us-gaap_StockIssuedDuringPeriodValuePurchaseOfAssets	$ 33,002
Common Stock
Stock Issued During Period, Value, Purchase of Assets	us-gaap_StockIssuedDuringPeriodValuePurchaseOfAssets	$ 6,200
Stock Issued During Period, Shares, Purchase of Assets	us-gaap_StockIssuedDuringPeriodSharesPurchaseOfAssets	6,200,000
Additional Paid-in Capital
Stock Issued During Period, Value, Purchase of Assets	us-gaap_StockIssuedDuringPeriodValuePurchaseOfAssets	$ 26,802