[X] | QUARTERLY REPORT PURSUAN T TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
South Dakota
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46-1496846
|
|
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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N/A
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||
Former name, former address, and former fiscal year, if changed since last report
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Page
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|||
Item 1.
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3 | ||
3
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|||
4
|
|||
5
|
|||
6
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|||
Item 2.
|
17
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||
Item 3.
|
19
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||
Item 4.
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19
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||
Item 1.
|
20
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||
Item 1A. | Risk Factors | 20 | |
Item 2.
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20
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||
Item 3.
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20
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||
Item 4.
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20
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||
Item 5.
|
20
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||
Item 6.
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21
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||
22
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September 30,
|
June 30,
|
|||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
50,603
|
$
|
265
|
||||
Accounts receivable
|
204
|
339
|
||||||
Prepaid expenses
|
958,883
|
1,498,483
|
||||||
Deferred financing cost, net
|
13,111
|
-
|
||||||
Total Current Assets
|
1,022,801
|
1,499,087
|
||||||
Fixed assets, net
|
60,957
|
76,572
|
||||||
TOTAL ASSETS
|
$
|
1,083,758
|
$
|
1,575,659
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
600
|
4,277
|
||||||
Derivative liabilities
|
441,162
|
158,775
|
||||||
Convertible loans and accrued interest, net of debt discounts
|
57,464
|
56,065
|
||||||
Convertible loans and accrued interest, net of debt discounts - related party
|
25,173
|
17,571
|
||||||
Total Current Liabilities
|
524,399
|
236,688
|
||||||
Total Liabilities
|
524,399
|
236,688
|
||||||
Commitments and Contingencies (Note 9)
|
||||||||
Stockholders' Equity:
|
||||||||
Convertible preferred stock, $0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at September 30, 2015 and June 30, 2015, respectively
|
500
|
500
|
||||||
Common stock, $0.0001 par value, 750,000,000 shares authorized, 44,952,538 and 37,847,163 shares issued and outstanding at September 30, 2015 and June 30, 2015, respectively
|
4,495
|
3,784
|
||||||
Additional paid-in capital
|
2,983,952
|
2,474,909
|
||||||
Accumulated deficit
|
(2,429,588
|
)
|
(1,140,222
|
)
|
||||
Total Stockholders' Equity
|
559,359
|
1,338,971
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
1,083,758
|
$
|
1,575,659
|
Three Months Ended September 30,
|
||||||||
2015
|
2014
|
|||||||
Revenues
|
$
|
386
|
$
|
1,329
|
||||
Gross Profit
|
386
|
1,329
|
||||||
Operating Expenses
|
||||||||
Sales and marketing
|
1,578
|
2,483
|
||||||
Legal and professional fees
|
877,654
|
9,343
|
||||||
General and administrative
|
4,714
|
4,902
|
||||||
Depreciation
|
15,615
|
10,615
|
||||||
Total Operating Expenses
|
899,561
|
27,343
|
||||||
Loss from operations
|
(899,175
|
)
|
(26,014
|
)
|
||||
Other Income (Expense)
|
||||||||
Change in fair value of derivative liabilities
|
(335,503
|
)
|
-
|
|||||
Interest expense
|
(54,688
|
)
|
(641
|
)
|
||||
Net Other Expense
|
(390,191
|
)
|
(641
|
)
|
||||
Net Loss
|
$
|
(1,289,366
|
)
|
$
|
(26,655
|
)
|
||
Net Loss Per Share: Basic and Diluted
|
$
|
(0.03
|
)
|
$
|
(0.00
|
)
|
||
Weighted Average Number of Shares Outstanding: Basic and Diluted
|
41,384,608
|
34,512,910
|
Three Months Ended September 30,
|
||||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(1,289,366
|
)
|
$
|
(26,655
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation expense
|
15,615
|
10,615
|
||||||
Common stock issued for services
|
327,000
|
-
|
||||||
Amortization of stock issued for prepaid services | 536,376 | - | ||||||
Amortization of deferred financing cost
|
1,649
|
-
|
||||||
Amortization of debt discounts
|
50,102
|
-
|
||||||
Change in fair value of derivative liabilities
|
335,503
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
135
|
(22
|
)
|
|||||
Prepaid expenses
|
3,224
|
-
|
||||||
Accounts payable
|
(3,677
|
)
|
554
|
|||||
Accrued interest
|
2,937
|
641
|
||||||
Net Cash Used in Operating Activities
|
(20,502
|
)
|
(14,867
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Issuance of common stock for cash
|
-
|
17,250
|
||||||
Proceeds from convertible notes payable, net of original issue discounts
|
81,750
|
-
|
||||||
Payment of deferred financing costs
|
(10,910
|
)
|
-
|
|||||
Repayment of convertible notes payable
|
-
|
(2,000
|
)
|
|||||
Net cash provided by Financing Activities
|
70,840
|
15,250
|
||||||
Net cash increase for period
|
50,338
|
383
|
||||||
Cash at beginning of period
|
265
|
4,404
|
||||||
Cash at end of period
|
$
|
50,603
|
$
|
4,787
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid for income taxes
|
$
|
-
|
$
|
-
|
||||
Cash paid for interest
|
-
|
-
|
||||||
NON CASH INVESTING AND FINANCING ACTIVITIES
|
||||||||
Issuance of common stock for deferred financing costs
|
$
|
3,850
|
$
|
-
|
||||
Issuance of common stock for conversion of debt and accrued interest
|
43,607
|
-
|
||||||
Resolution of derivative liabilities upon conversion of debt
|
134,866
|
|||||||
Derivative liability recognized as debt discount
|
81,750
|
-
|
September 30, 2015
|
June 30, 2015
|
|||||||
Mobile applications
|
$
|
179,870
|
$
|
179,870
|
||||
Automobile
|
8,305
|
8,305
|
||||||
Fixed assets, gross
|
188,175
|
188,175
|
||||||
Accumulated depreciation
|
(127,218
|
)
|
(111,603
|
)
|
||||
Fixed assets, net
|
$
|
60,957
|
$
|
76,572
|
September 30, 2015
|
June 30, 2015
|
|||||||
April 2013 Note
|
$
|
6,500
|
$
|
14,000
|
||||
January 2014 Note
|
-
|
10,000
|
||||||
October 2014 Note
|
22,850
|
30,000
|
||||||
February 2015 Note
|
-
|
15,000
|
||||||
March 2015 Note
|
10,000
|
10,000
|
||||||
April 2015 Note
|
10,000
|
10,000
|
||||||
August 2015 Note
|
25,000
|
-
|
||||||
September 2015 Note - 1
|
27,000
|
-
|
||||||
September 2015 Note - 2
|
35,750
|
-
|
||||||
Total notes payable
|
137,100
|
89,000
|
||||||
Accrued interest
|
8,479
|
10,762
|
||||||
Less: Unamortized debt discounts
|
(88,115
|
)
|
(43,697
|
)
|
||||
Total convertible loans
|
57,464
|
56,065
|
||||||
Less: current portion of convertible loans
|
(57,464
|
)
|
(56,065
|
)
|
||||
Long-term convertible loans
|
$
|
-
|
$
|
-
|
September 30, 2015
|
June 30, 2015
|
|||||||
October 2014 Note – Related party
|
$
|
22,000
|
$
|
22,000
|
||||
Accrued interest
|
3,173
|
2,342
|
||||||
Less: Unamortized debt discounts
|
-
|
(6,771
|
)
|
|||||
Total
|
25,173
|
17,571
|
||||||
Less: current portion of convertible loan
|
(25,173
|
)
|
(17,571
|
)
|
||||
Long-term convertible notes payable
|
$
|
-
|
$
|
-
|
Three Months Ended
|
Year Ended
|
|||
September 30, 2015
|
June 30, 2015
|
|||
Expected term
|
0.04 - 1.00 years
|
0.29 - 1.00 years
|
||
Expected average volatility
|
25%-242%
|
108%-218%
|
||
Expected dividend yield
|
-
|
-
|
||
Risk-free interest rate
|
0.00%-0.40%
|
0.01%-0.25%
|
Fair Value Measurements at September 30, 2015
|
||||||||||||||||
Quoted Prices in
|
Significant Other
|
Significant
|
||||||||||||||
September 30, |
Active Markets
|
Observable Inputs
|
Unobservable Inputs
|
|||||||||||||
|
2015
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
April 2013 Note
|
$
|
23,621
|
$
|
-
|
$
|
-
|
$
|
23,621
|
||||||||
October 2014 Note
|
63,145
|
-
|
-
|
63,145
|
||||||||||||
March 2015 Note
|
30,617
|
-
|
-
|
30,617
|
||||||||||||
April 2015 Note
|
30,914
|
-
|
-
|
30,914
|
||||||||||||
August 2015 Note
|
61,575
|
-
|
-
|
61,575
|
||||||||||||
September 2015 Note - 1
|
80,828
|
-
|
-
|
80,828
|
||||||||||||
September 2015 Note - 2
|
81,422
|
-
|
-
|
81,422
|
||||||||||||
October 2014 Note - related party
|
69,040
|
-
|
-
|
69,040
|
||||||||||||
$
|
441,162
|
$
|
-
|
$
|
-
|
$
|
441,162
|
Fair Value Measurements Using Significant Observable Inputs (Level 3)
|
||||
Balance - June 30, 2015
|
$
|
158,775
|
||
Addition of new derivatives recognized as debt discounts
|
81,750
|
|||
Addition of new derivatives recognized as loss on derivatives
|
73,183
|
|||
Settled upon conversion of debt
|
(134,866
|
)
|
||
Loss on change in fair value of the derivative
|
262,320
|
|||
Balance - September 30, 2015
|
$
|
441,162
|
· | Issued 15,960,000 shares of common stock for conversion of convertible loans with principal and accrued interest balances of $26,393. |
· | Cancelled 1,723,329 shares of common stock, previously issued to the Cicero Consulting Group, LLC in March 2015. |
· | Trends affecting the Company’s financial condition, results of operations or future prospects; |
· | The Company’s business and growth strategies; |
· | The Company’s financing plans and forecasts; |
· | The factors that we expect to contribute to our success and the Company’s ability to be successful in the future; |
· | The Company’s business model and strategy for realizing positive results as sales increase; |
· | Competition, including the Company’s ability to respond to such competition and its expectations regarding continued competition in the market in which the Company competes; |
· | Expenses; |
· | The Company’s expectations with respect to continued disruptions in the global cap ital markets and reduced levels of consumer spending and the impact of these trends on its financial results; |
· | The Company’s ability to meet its projected operating expenditures and the costs associated with development of new projects; |
· | The Company’s ability to pay dividends or to pay any specific rate of dividends, if declared; |
· | The impact of new accounting pronouncements on its financial statements; |
· | That the Company’s cash flows from operating activities will be sufficient to meet its projected operating expenditures for the next twelve months; |
· | The Company’s market risk exposure and efforts to minimize risk; |
· | Development opportunities and its ability to successfully take advantage of such opportunities; |
· | Regulations, including anticipated taxes, tax credits or tax refunds expected; |
· | The outcome of various tax audits and assessments, including appeals thereof, timing of resolution of such audits, the Company’s estimates as to the amount of taxes that will ultimately be owed and the impact of these audits on the Company’s financial statements; |
· | The Company’s overall outlook including all statements under Management’s Discussion and Analysis or Plan of Operation; |
· | That estimates and assumptions made in the preparation of financial statements in conformity with US GAAP may differ from actual results; and |
· | Expectations, plans, beliefs, hopes or intentions regarding the future. |
· | Since inception our chief executive officer also functions as our chief financial officer. As a result, our officers may not be able to identify errors and irregularities in the financial statements and reports. |
· | We were unable to maintain full segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any material adjustments to our financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties. |
· | Documentation of all proper accounting procedures is not yet complete. |
· | Increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures. |
31
|
|
32
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Schema
|
101.CAL*
|
XBRL Taxonomy Calculation Linkbase
|
101.DEF*
|
XBRL Taxonomy Definition Linkbase
|
101.LAB*
|
XBRL Taxonomy Label Linkbase
|
101.PRE*
|
XBRL Taxonomy Presentation Linkbase
|
* | Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
APPYEA, INC.
|
|||
Date: November 16, 2015
|
By: /s/ Jackie Williams
|
||
Jackie Williams, President, Principal Financial Officer, Principal Accounting Officer, and Director
|
1. | I have reviewed this quarterly report on Form 10-Q of AppYea, Inc. for the quarter ended September 30, 2015; |
2. | Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the company. |
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