Form 10-Q Beyond Commerce, Inc. For: Mar 31

May 12, 2022 5:26 PM EDT

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byoc_10q.htm

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarter ended: March 31, 2022

 

Or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from ___________ to____________

 

Commission File Number: 000-52490

 

Beyond Commerce, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

98-0512515

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

3773 Howard Hughes Pkwy, Suite 500

Las Vegas, Nevada 89169

(Address of Principal Executive Offices) 

 

(702) 675-8022

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

None

 

None

 

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 requirement for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically a every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

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

 

Large accelerated filer

Accelerated filer

Non-accelerated Filer

Smaller reporting company

 

Emerging growth company

 

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 12(b)-2 of the Exchange Act). Yes      No ☒

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At May 10, 2022, the registrant had 15,441,610,289 shares of common stock outstanding.

 

 

 

 

Table of Contents

 

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

 

 

3

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

5

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

8

 

ITEM 4. CONTROLS AND PROCEDURES

 

 

8

 

PART II – OTHER INFORMATION

 

 

10

 

ITEM 1. LEGAL PROCEEDINGS

 

 

10

 

ITEM 1A. RISK FACTORS

 

 

11

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

 

11

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

 

11

 

ITEM 4. MINE SAFETY DISCLOSURES

 

 

11

 

ITEM 5. OTHER INFORMATION

 

 

11

 

ITEM 6. EXHIBITS

 

 

12

 

SIGNATURES

 

 

13

 

 

 

2

Table of Contents

 

PART 1. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

 

Beyond Commerce, Inc.

 

byoc_10qimg1.jpg

 

UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE MONTH PERIODS ENDED

March 31, 2022 AND 2021

 

 

3

Table of Contents

 

BEYOND COMMERCE, INC.

 

TABLE OF CONTENTS

 

 

 

 

Page

 

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2022 AND DECEMBER 31, 2021 (Unaudited)

 

 

F-1

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE-MONTHS ENDED MARCH 31, 2022 AND 2021 (Unaudited)

 

 

F-2

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTHS ENDED MARCH 31, 2022 AND 2021 (Unaudited)

 

 

F-3

 

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (Unaudited)

 

 

F-4

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 

 

F-5

 

 

 
4

Table of Contents

 

BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

 

March 31,

2022

 

 

December 31,

2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash & cash equivalents

 

$211,437

 

 

$570,349

 

Accounts receivable, net

 

 

1,051,616

 

 

 

971,095

 

Other current assets

 

 

67,063

 

 

 

65,903

 

Total current assets

 

 

1,330,116

 

 

 

1,607,347

 

Operating Lease right of use asset

 

 

49,514

 

 

 

59,017

 

Property, equipment, and software - net

 

 

20,164

 

 

 

23,980

 

Investment in CityFreighter

 

 

250,000

 

 

 

250,000

 

Intangible asset- net

 

 

1,895,042

 

 

 

1,987,216

 

Goodwill

 

 

1,299,144

 

 

 

1,299,144

 

 

 

 

 

 

 

 

 

 

Total assets:

 

$4,843,980

 

 

 

5,226,704

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$559,652

 

 

$490,654

 

Operating Lease Liability, current

 

 

49,471

 

 

 

47,731

 

Accrued Interest

 

 

1,132,369

 

 

 

1,002,410

 

Accrued payroll & related items

 

 

166,950

 

 

 

110,165

 

Derivative liability

 

 

484,566

 

 

 

532,384

 

Short-term borrowings – net of discount

 

 

1,731,428

 

 

 

1,731,428

 

Short-term borrowings- related party

 

 

1,350,000

 

 

 

1,500,000

 

Total current liabilities

 

 

5,474,436

 

 

 

5,414,772

 

 

 

 

 

 

 

 

 

 

Long-term borrowings – net of discount

 

 

3,076,536

 

 

 

3,058,828

 

Operating lease liability, noncurrent

 

 

6,422

 

 

 

18,690

 

Total liabilities

 

 

8,557,394

 

 

 

8,492,290

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders Equity:

 

 

 

 

 

 

 

 

Preferred stock series A, $0.001 par value of 250 shares authorized and 249.9999 and 249.9999 shares issued and outstanding, respectively.

 

 

-

 

 

 

-

 

Preferred stock Series B, $0.001 par value of 51 shares authorized and 51 and 51 shares issued and outstanding, respectively.

 

 

-

 

 

 

-

 

Preferred Stock series C, $0.001 par value of 50,000,000 authorized and 687,760 and 842,002 shares issued and outstanding, respectively

 

 

688

 

 

 

842

 

Common stock, $0.001 par value, 30,000,000,000 shares authorized, 15,441,610,289 and 13,390,287,415 issued and outstanding, respectively.

 

 

15,441,610

 

 

 

13,390,287

 

Additional paid in capital

 

 

49,225,547

 

 

 

51,073,155

 

Accumulated deficit

 

 

(68,455,400)

 

 

(67,808,598)

Deficit attributable to Beyond Commerce, Inc stockholder

 

 

(3,787,555)

 

 

(3,344,314)

Equity attributable to noncontrolling interest

 

 

74,141

 

 

 

78,728

 

Total stockholders’ deficit

 

 

(3,713,414)

 

 

(3,265,586)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$4,843,980

 

 

$5,226,704

 

 

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

 

 
F-1

Table of Contents

 

BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31,

(Unaudited)

 

 

 

2022

 

 

2021

 

Revenues

 

$1,009,408

 

 

$1,113,519

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Cost of revenue

 

 

286,119

 

 

 

378,996

 

Selling, general and administrative

 

 

181,817

 

 

 

204,229

 

Payroll expense

 

 

774,227

 

 

 

722,408

 

Professional Fees

 

 

222,800

 

 

 

197,294

 

Depreciation and amortization

 

 

95,990

 

 

 

114,832

 

Total operating expenses

 

 

1,560,953

 

 

 

1,617,759

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(551,545)

 

 

(504,240)

 

 

 

 

 

 

 

 

 

Non-operating income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(147,662)

 

 

(175,628)

Derivative related expenses

 

 

-

 

 

 

(2,937,711)

Change in derivative liability

 

 

47,818

 

 

 

758,229

 

Loss on extinguishment of debt

 

 

-

 

 

 

(3,435,695)

Total non-operating income (expense)

 

 

(99,894)

 

 

(5,790,805)

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income tax

 

 

(651,389)

 

 

(6,295,045)

 

 

 

 

 

 

 

 

 

Provision for income tax

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Consolidated net loss

 

 

(651,389)

 

 

(6,295,045)

 

 

 

 

 

 

 

 

 

Noncontrolling interest

 

 

(4,587)

 

 

(4,936)

Net loss

 

$(646,802)

 

$(6,290,109)

 

 

 

 

 

 

 

 

 

Net income (loss) per common share-basic and diluted

 

$(0.00)

 

$(0.00)

 

 

 

 

 

 

 

 

 

Weighted average shares of capital outstanding – basic and diluted

 

 

13,682,864,073

 

 

 

4,087,460,718

 

 

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

 

 
F-2

Table of Contents

 

BEYOND COMMERCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31,

(Unaudited)

 

 

 

2022

 

 

2021

 

Net (loss)

 

$(651,389)

 

$(6,295,045)

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock issued for services

 

 

53,561

 

 

 

43,950

 

Loss on derivative

 

 

-

 

 

 

2,937,711

 

Amortization of debt discount

 

 

17,708

 

 

 

26,561

 

Loss on extinguishment of debt

 

 

-

 

 

 

3,435,695

 

Depreciation and amortization

 

 

95,990

 

 

 

114,832

 

Change in derivative liability

 

 

(47,818)

 

 

(758,229)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(80,521)

 

 

3,402

 

(Increase) decrease in other current assets

 

 

8,343

 

 

 

(55,950)

Increase (decrease) in accounts payable

 

 

68,998

 

 

 

(107,874)

Increase (decrease) in payroll liabilities

 

 

56,785

 

 

 

95,434

 

Increase (decrease) in other current liabilities

 

 

119,431

 

 

 

137,153

 

Net cash (used in) in operating activities.

 

 

(358,912 )

 

 

(422,360)

Cash flows from investing activities :

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Cash receipts from note payable

 

 

-

 

 

 

775,000

 

Proceeds from sale of preferred stock series C

 

 

-

 

 

 

1,000,000

 

Net cash provided by financing activities

 

 

-

 

 

 

1,775,000

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(358,912)

 

 

1,352,640

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning balance

 

 

570,349

 

 

 

84,262

 

Cash and cash equivalents, ending balance

 

$211,437

 

 

$1,436,902

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

 

 

Cash Paid For:

 

 

 

 

 

 

 

 

Interest

 

$-

 

 

$-

 

Income taxes

 

$-

 

 

$-

 

Summary of Non-Cash Investing and Financing Information:

 

 

 

 

 

 

 

 

Stock issued for conversion of debt

 

$150,000

 

 

$943,288

 

Stock issued for conversion of Series C preferred stock

 

$1,542,420

 

 

 

-

 

 

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

 

 
F-3

Table of Contents

 

BEYOND COMMERCE, INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

 

 

 

Preferred Stock A

 

 

Preferred Stock B

 

 

Preferred Stock C

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 Non

 

 

Total

 

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Par

Value

 

 

 Paid in Capital

 

 

Accumulated

Deficit

 

 

Controlling

Interest

 

 

Stockholders’

Deficit

 

Balance Year December 31, 2020

 

 

249.9999

 

 

$-

 

 

 

33

 

 

$-

 

 

 

-

 

 

$-

 

 

 

3,410,355,200

 

 

$3,410,355

 

 

$50,263,645

 

 

$(58,645,834 )

 

$97,018

 

 

$(4,874,816 )

Common stock issued for debt conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

943,288,342

 

 

 

943,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

943,288

 

Preferred Series C issued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,000

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

999,990

 

 

 

 

 

 

 

 

 

 

 

1,000,000

 

Preferred Series B issuance

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43,950

 

 

 

 

 

 

 

 

 

 

 

43,950

 

Extinguishment of Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,556,905

 

 

 

1,557

 

 

 

598,048,320

 

 

 

598,048

 

 

 

2,836,090

 

 

 

 

 

 

 

 

 

 

 

3,435,695

 

Extinguishment of derivative liabilities on conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,958,547

 

 

 

 

 

 

 

 

 

 

 

2,958,547

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,290,109 )

 

 

(4,936 )

 

 

(6,295,045 )

Balance March 31, 2021

 

 

249.9999

 

 

$-

 

 

 

36

 

 

$-

 

 

 

1,566,905

 

 

$1,567

 

 

 

4,951,691,862

 

 

$4,951,691

 

 

$57,102,222

 

 

$(64,935,943 )

 

$92,082

 

 

$(2,788,381 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Year December 31, 2021

 

 

249.9999

 

 

 

 

 

 

 

51

 

 

 

 

 

 

 

842,002

 

 

 

842

 

 

 

13,390,287,415

 

 

 

13,390,287

 

 

 

51,073,155

 

 

 

(67,808,598)

 

 

78,728

 

 

 

(3,265,586)

Extinguishment of derivative liabilities on conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock issued for employment agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

133,902,874

 

 

 

133,903

 

 

 

(80,342)

 

 

 

 

 

 

 

 

 

 

53,561

 

Common stock issued for conversion of preferred stock series C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(154,242)

 

 

(154)

 

 

1,542,420,000

 

 

 

1,542,420

 

 

 

(1,542,266)

 

 

 

 

 

 

 

 

 

 

-

 

Common stock issued for debt conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

375,000,000

 

 

 

375,000

 

 

 

(225,000)

 

 

 

 

 

 

 

 

 

 

150,000

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(646,802)

 

 

(4,587)

 

 

(651,389)

Balance March 31, 2022

 

 

249.9999

 

 

$-

 

 

 

51

 

 

$-

 

 

 

687,760

 

 

$688

 

 

 

15,441,610,289

 

 

$15,441,610

 

 

$49,225,547

 

 

$(68,455,400 )

 

$74,141

 

 

$(3,713,414 )

 

 
F-4

Table of Contents

  

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

 

Beyond Commerce, Inc. (the “Company”, “we” and “our”), has a planned business objective to develop, acquire, and deploy disruptive strategic software technology and market-changing business models through selling our own products and the acquisitions of existing companies. The Company currently owns and operates a data company and is actively seeking acquisition opportunities in high growth sectors such as psychedelics, cryptocurrency, ESports and Logistics among others.

 

Basis of Presentation

 

The condensed consolidated financial statements and the notes thereto for the periods ended March 31, 2022 and 2021 included herein include the accounts of the Company, its wholly-owned subsidiary Service 800 Inc., and Customer Centered Strategies, LLC (“CCS”), which the Company has an 80% investment interest.

 

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. All significant intercompany accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

 

NOTE 2. SELECTED ACCOUNTING POLICIES

 

Interim Financial Statements

 

These unaudited condensed consolidated financial statements as of and for the three (3) months ended March 31, 2022 and 2021, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America.

 

These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2021 and 2020, respectively, which are included in the Company’s December 31, 2021 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on March 31, 2022. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three (3) months ended March 31, 2022 are not necessarily indicative of results for the entire year ending December 31, 2022.

 

Use of Estimates

 

The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Estimates are used in the determination of depreciation and amortization and the valuation for non-cash issuances of equity instruments, income taxes, and contingencies, among others. Actual results could differ materially from these estimates.

 

 
F-5

Table of Contents

 

 

 

 

March 31, 2022

Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair Value

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Liabilities

 

$-

 

 

$-

 

 

$484,566

 

 

$484,566

 

Total

 

$-

 

 

$-

 

 

$484,566

 

 

$484,566

 

 

 

 

December 31, 2021

Fair Value Measurements

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair Value

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Liabilities

 

$-

 

 

$-

 

 

$532,384

 

 

$532,384

 

Total

 

$-

 

 

$-

 

 

$532,384

 

 

$532,384

 

 

Derivative liability as of December 31, 2021

 

$532,384

 

Change in derivative liability during the period

 

 

(47,818)

Balance at March 31, 2022

 

$484,566

 

 

                 Management considers all of its derivative liabilities to be Level 3 liabilities.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with FASB ASC Subtopic 606-10, Revenue Recognition. We recognize revenue as we transfer control of deliverables (products, solutions and services) to our customers in an amount reflecting the consideration to which we expect to be entitled. To recognize revenue, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. We account for a contract based on the terms and conditions the parties agree to, the contract has commercial substance and collectability of consideration is probable. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience.

 

The majority of the Company’s revenue is generated by the completion of a survey. Revenue is recognized and customers are billed at the point in time a survey occurs or when a related service is complete. The Company may require a deposit from new customers for set up costs or as down payments. These amounts are not significant to the financial statements.

 

Valuation of Derivative Instruments

 

ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts, and recognizes a net gain or loss on debt extinguishment.

 

 
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Management used the following inputs to value the Derivative Liabilities for the three months ended March 31, 2022:

 

 

 

March 31, 2022

Derivative Liability

 

Expected term

 

1 year

 

Exercise price

 

$0.00008

 

Expected volatility

 

 

196%

Expected dividends

 

None

 

Risk-free rate

 

 

1.63%

 

Recent Accounting Pronouncements

 

The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics.

 

In August 2020, the Financial Accounting Standards Board (“FASB”) issued a new standard (ASU 2020-06) to reduce the complexity of accounting for convertible debt and other equity-linked instruments. The ASU simplifies accounting for convertible instruments by removing major separation models required under current Generally Accepted Accounting Principles (GAAP). Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. As a result, the new standard may affect net income and EPS, and therefore performance measures, and increase debt levels which may impact debt covenant compliance.

 

ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption will be permitted.

 

The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements. The Company has taken the position that any future standards will not be disclosed to the extent they are not material to our operations.

 

NOTE 3. GOING CONCERN

 

The Company’s financial statements are prepared using GAAP, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because of recent events, the Company cannot state with certainty of its ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

 

The Company has suffered losses from operations and has a working capital deficit, and negative cash flows from operations which raise substantial doubt about its ability to continue as a going concern. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in attempting to raise capital from additional debt and equity financing. Due to its nominal revenues, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue, including through the acquisition of Service 800 and CCS or through a merger transaction with a well-capitalized entity. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. If we are unable to obtain additional funds, or if the funds cannot be obtained on terms favorable to us, we will be required to delay, scale back or eliminate our plans to continue to develop and expand our operations or in the extreme situation, cease operations altogether.

 

 
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NOTE 4. INVESTMENTS

 

On November 23, 2021, the Company entered into a simple agreement for future equity (the “SAFE”) with Cityfreighter, Inc. (“Cityfreighter”), pursuant to which the Company invested $250,000 (the “Purchase Amount”). Cityfreighter is a California based developer of electric low-floor trucks for the last mile delivery industry. Beyond Commerce received customary representations and warranties from Cityfreighter. The SAFE provides the Company with the right to either (a) future equity in Cityfreighter when it completes an Equity Financing (as defined below), or (b) future equity in Cityfreighter or cash proceeds if there is a liquidity or dissolution event.

 

On December 2, 2021 the Company executed a binding Letter of Intent (“LOI”) with Elettricars (of Italy) to attain the exclusive U.S. rights to its low-speed electric vehicle (“LSEV”). Elettricars is focused on manufacturing and commercializing a low-speed electric vehicle (“LSEV”), a 4-wheeled motor vehicle, not an ATV, with a top speed of 25 mph and weighs less than 3,000 lbs. The Company paid Elettricars an initial payment in the amount of $50,000 in connection with the execution of a Definitive Agreement, which was being held in escrow. During the first quarter the parties determined not to proceed with the transaction and the $50,000 in escrow was returned to the Company.

 

NOTE 5. SHORT- AND LONG-TERM BORROWINGS

 

Short-term and Long-term borrowings, consist of the following:

 

March 31,

 

 

December 31,

 

Short term debt;

 

2022

 

 

2021

 

Convertible Promissory Notes, bearing an annual interest rate of 24% secured, past due

 

$112,259

 

 

$112,259

 

Short-Term Note – Jean Mork Bredeson cash deficit holdback, 15%, past due

 

 

210,000

 

 

 

210,000

 

Short-Term Note – Jean Mork Bredeson purchase allocation, 15%, past due

 

 

1,409,169

 

 

 

1,409,169

 

Convertible promissory note, related party interest rate 2.0%

 

 

1,350,000

 

 

 

1,500,000

 

 

 

 

 

 

 

 

 

 

Total short-term debt

 

$3,081,428

 

 

$3,231,428

 

 

Long term debt;

 

 

 

 

 

 

Funding from the SBA Program, annual interest of 3.75%, due 03/30/2051

 

 

150,000

 

 

 

150,000

 

Promissory Note – Jean Mork Bredeson, interest rate 5.5%, due 2/28/2022, past due

 

 

2,100,000

 

 

 

2,100,000

 

Senior Secured Redeemable Debenture, bearing an annual interest rate of 16%, due 12/31/2021, long term, past due

 

 

826,547

 

 

 

826,547

 

Total short-term and long-term borrowings, before debt discount

 

 

6,157,975

 

 

 

6,307,975

 

Less debt discount

 

 

(11)

 

 

(17,719)

Total short-term and long-term borrowings, net

 

$6,157,964

 

 

$6,290,256

 

Short-term and Long-term borrowings, consist of the following:

 

 

 

 

 

 

 

 

Short-term borrowings – net of discount

 

$3,081,428

 

 

$3,231,428

 

Long-term borrowings – net of discount

 

 

3,076,536

 

 

 

3,058,828

 

Total Short-Term and long term borrowings – net of discount

 

$6,157,964

 

 

$6,290,256

 

 

 
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On November 27, 2018, the Company received funding in conjunction with a convertible promissory note and a security purchase agreement dated November 27, 2018, in the amount of $250,000. The lender was Auctus Fund LLC. The notes have a maturity of August 27, 2019 and interest rate of 12% per annum and are convertible at a price of 60% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the twenty-five (25) trading days immediately prior to conversion. Additionally, if the stock price falls below par value, additional shares will be issued at the lower conversion rate so that stocks continue to be issued at par value. The note may be prepaid but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The Company is currently negotiating an extension with the noteholder as it is currently past due. As a result of a default provision, the interest rate has increased to 24% and additional principal was added in the amount of $15,000. As of March 31, 2022, the outstanding balance is $112,259.

 

Effective February 28, 2019 as a component of the closing of the business combination between Beyond Commerce, Inc. and Service 800, Jean Mork Bredeson, Founder and President of Service 800, the Company issued a $2,100,000 three-year 5.5% promissory note to Ms. Bredeson. Interest only payments are required during the first year of the note. The $2,100,000 promissory note is personally guaranteed by the estate of George Pursglove whose executor is Geordan Pursglove, the Company’s President and CEO.

 

As a component of the Service 800 transaction, in lieu of the entire cash payment of $2,100,000 being made to Ms. Bredeson, a $210,000 amount was to be withheld until May 30, 2019 and continues to be outstanding. This note does not carry any interest obligations. Also, as all cash and accounts receivables at the effective date of the closing were to be retained by Ms. Bredeson, this allocation of cash is to be distributed quarterly on a non interest basis as true-ups are derived, which amounted to $1,409,169 as of March 31, 2022 and December 31 2021, respectively. Although holdbacks did not initially include interest obligations, we agreed to begin accruing interest at 15% in October 2019.

 

On March 30, 2021 the Company through its Service 800 Inc. subsidiary, received $150,000 in funding in conjunction with a promissory note under the SBA Loan Program. Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the Loan, including principal and interest. This loan is a 30-year term note, bearing 3.75% interest due March 30, 2051. Installment payments, including principal and interest, of $731 monthly, will begin twelve (12) months from the date of the promissory note.

 

On July 19, 2021, the Company issued a convertible promissory note (the “Note”) in favor of Geordan G. Pursglove, the Company’s Chairman and Chief Executive Officer, in the principal amount of $1,500,000, in satisfaction of Mr. Pursglove’s accrued salary owing of $1,239,800 and recognized a $260,200 loss on extinguishment of debt. The Note accrues interest at 2% per annum, with the principal and interest payments due in twelve equal monthly installments. At the holder’s election, the Note is convertible into shares of the Company’s common stock, at a price per share equal to 100% of the average closing price of the Company’s common stock for the five trading days immediately preceding the date of such conversion (the “Conversion Price”). The cash maturity date is July 19, 2022. There was a conversion of $150,000 in Quarter one, which can be referred to in Note 6.

 

NOTE 6. COMMON STOCK AND PREFERRED STOCK

 

Common Stock

 

As of March 31, 2022, our authorized capital stock consisted of 30,000,000,000 shares of common stock, par value $0.001 per share.

 

During the three months ended, March 31, 2022, the Company issued 375,000,000 shares valued at $150,000 for the conversion of certain debt and accrued interest into shares of our stock and extinguishment of debt. Additionally, the Company issued 1,542,420,000 shares valued at $1,542,420 for the conversion of Series C Preferred Stock and issued 133,902,874 shares valued at $53,561 as part of the Company’s employment agreement with the Chief Financial Officer, Peter Stazzone.

 

 
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Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

 

Preferred Stock

 

In March 2021, we approved authorization to issue up to 60,000,400 shares of preferred stock, which are designated Series A, B, C and undesignated Preferred Stock. As of November 14, 2021, we have 249.9999 shares of Series A Preferred Stock issued and outstanding.

 

We have designated 250 shares of Series A Convertible Preferred Stock, par value of $0.001 per share (the “Series A Preferred Stock”).

 

The Series A Preferred Stock will, with respect to each holder of the Series A Preferred Stock, be entitled to three million (3,000,000) votes for each share of Series A Preferred Stock standing in his, her or its name on the books of the corporation. Each share of Series A Preferred Stock is convertible, at the option of the holder, into one million shares of Common Stock. The Series A Preferred Stock is entitled, in the event of any voluntary liquidation, dissolution or winding up of the Corporation, to receive payment or distribution of a preferential amount before any payments or distributions are received by any class or series of common stock. Subject to the prior or equal rights of the holders of all classes of stock at the time outstanding having prior or equal rights as to dividends and ranking ahead of the Common Stock, the holders of the Series A Preferred Stock shall be entitled to therefore receive, when and as declared by the Board of Directors, out of any assets of the Corporation legally available, such dividends as may be declared from time to time by the Board of Directors.

 

We have designated 51 shares of Series B Convertible Preferred Stock, par value of $0.001 per share (the “Series B Preferred Stock”). One (1) share of the Series B Preferred Stock shall have voting rights equal to (x) 0.019607 multiplied by the total number of votes of the issued and outstanding shares of Common Stock and other Preferred Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. For the avoidance of doubt, if the total number of votes of the issued and outstanding shares of Common Stock and other Preferred Stock eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one share of the Series B Preferred Stock shall be equal to 102,036 (e.g., ((0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) = 102,036).

 

With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series B Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Corporation’s Articles of Incorporation or by-laws. Such concentrated control of the Company may adversely affect the price of our common stock. A stockholder that acquires common stock will not have an effective voice in the management of the Company.

 

We have designated 50,000,000 shares of Series C Convertible Preferred Stock, par value of $0.001 per share (the “Series C Preferred Stock”).

 

The Series C Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) pari passu with the Corporation’s Common Stock, $0.001 par value per share (“Common Stock”); (b) junior to all other series of Preferred Stock, as such may be designated as of the date of this Designation, or which may be designated by the Corporation after the date of this Designation (the “Other Preferred”), and (c) junior to all existing and future indebtedness of the Corporation.

 

 
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Holders of the Series C Preferred Stock shall vote on all matters requiring a vote of the shareholders of the Corporation, together with the holders of shares of Common Stock and other classes of Preferred Stock entitled to vote, as a single class. Subject to the applicable beneficial ownership limitation, each Holder shall be entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s Preferred Shares would be convertible using the record date for determining the stockholders of the Corporation eligible to vote on such matters as the date as of which the number of Conversion Shares is calculated. Holders of the Series C Preferred Stock will also be entitled to vote as a separate class with respect to any matter as to which such voting rights are required by applicable law.

 

During the first quarter of 2021, the Company issued 1,566,905 shares of Series C Preferred, valued at $3,837,647. This was part of a settlement the Company reached with Discover to redeem the secured redeemable convertible debenture dated August 7, 2018. The valuation was derived from a loss on extinguishment of debt of $3,435,695 that represents the fair value of debt forgiveness, less the issuance of 598,048,320 common stock shares valued at par of $0.001, plus cash proceeds to the Company of $1,000,000 from the SPA that the Company entered into.

 

During the first quarter of 2022, 154,242 shares of Series C Convertible Preferred Stock were converted to 1,542,420,000 shares of common stock.

 

NOTE 7. COMMITMENTS AND CONTINGENCIES

 

Legal Matters

 

A complaint against the Company, dated February 5, 2020, has been filed in Hennepin County, Minnesota, by Jean Mork Bredeson, the former President and former owner of Service 800, making certain claims related to the Company’s acquisition of Service 800, seeking in excess of $1.6 million in damages. On March 16, 2020, the Company and Service 800 filed an answer, counterclaim and third-party claim against Ms. Bredeson and defendants Allen Bredeson and Jeff Schwedinger, former employees of Service 800. Answers and Affirmative and Additional Defenses to Third Party Claims were filed by Ms. Bredeson on April 7, 2020 and by Mr. Schwedinger on April 9, 2020 and, on April 24, 2020, Ms. Bredeson filed a Motion to Dismiss. The Court denied in full Ms. Bredeson’s motion to dismiss or for a more definite statement. Subsequently, using a wholly owned entity she controls, Ms. Bredeson filed another matter, captioned Green Valley Associates Inc. vs Service 800 Inc., 27-CV-20-13800. Although Ms. Bredeson is seeking to have the matters handled by separate judges, the Company sought consolidation of the two matters before Judge Klein, the judge who denied Ms. Bredeson’s motion to dismiss, but the consolidation was denied. Ms. Bredeson also has since filed, and then withdrawn, other motions, without allowing them to reach Judge Klein. Ms. Bredeson’s motion for summary judgment was ruled against by Judge Klein. The discovery has closed in both cases. On March 14, 2022 the judge granted the Company’s motion for sanctions against Bredeson for spoilation of documents that were likely to be relevant in the case. The judge also found that the Company was likely to be prejudiced by her conduct, so a sanction was warranted. On March 23, 2022 the judge granted the plaintiff’s motion for reimbursement of legal services by the Company incurred in opposing counterclaims brought by the Company in the amount of $95,506 as allowed by Minnesota statutes.

 

The Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 5, states that a firm must distinguish between losses that are probable, reasonably probable or remote. If a contingent liability is deemed probable, it must be directly reported in the financial statements. In July 2010, the FASB issued ASC 450-20 that updated the Standard and uses “probable,” “reasonably possible,” and “remote” to determine the likelihood of the future event that will confirm a loss, an impairment of an asset, or the incurrence of a liability.

 

Accrual of a loss contingency is required when (1) it is probable that a loss has been incurred at the date of the financial statements and (2) the amount can be reasonably estimated. No accrual has been made in the above matter as the determination is that a loss is not probable as of March 31, 2022 nor can a loss be reasonably estimated.

 

 
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In addition to the above, from time to time, we may be involved in litigation in the ordinary course of business. Other than as set forth above, we are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.

 

Other than as set forth above, to our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Operating Lease

 

We currently lease virtual office space at 3773 Howard Hughes Parkway, Suite: 500 Las Vegas, NV 89169. We pay an annual fee of $120 for this lease. There is also a location in Minnesota for Service 800, Inc. On February 20, 2020 the company moved Service 800, Inc. to 110 Cheshire Lane, Minnetonka Minnesota 55305. Service 800 leases 3,210 square feet of office space under an operating lease agreement with Carlson Center East LLC. The lease, which expires June 30, 2023, requires base monthly rents of $4,160, plus operating expenses.

 

The public entity guidance in ASU 2016-02, Leases (Topic 842) requires lessees to recognize substantially all leases on their balance sheets as lease liabilities with a corresponding right-of-use asset. Our accounting policy is to keep leases with an initial term of 12 months or less off of the balance sheet.

 

The Company leases office space under an operating lease. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease, right-of-use assets, and liabilities are recognized at the lease commencement date based on the present value of lease payments over the reasonably certain lease term. The implicit rates with the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The determination of the Company’s incremental borrowing rate requires judgement. The company determines its incremental borrowing rate for each lease using its then-current borrowing rate. Certain of the Company’s leases may include options to extend or terminate the lease. The Company establishes the number of renewal options periods used in determining the operating lease term based upon its assessment at the inception of the operating lease. The option to renew the lease may be automatic, at the option of the Company, or mutually agreed to between the landlord and the Company. Once the facility lease term has begun, the present value of the aggregate future minimum lease payments is recorded as a right-of-use asset.

 

Lease expense is recognized on a straight-line basis over the term of the lease. There are no options to extend or terminate the leases. The Company has no other leases yet to commence.

 

NOTE 8. RELATED PARTIES

 

On July 19, 2021, the Company issued a convertible promissory note (the “Note”) in favor of Geordan G. Pursglove, the Company’s Chairman and Chief Executive Officer, in the principal amount of $1,500,000, in satisfaction of Mr. Pursglove’s accrued salary owing of $1,239,800 and $260,200 for loss on settlement. The Note accrues interest at 2% per annum, with the principal and interest payments due in twelve equal monthly installments. At the holder’s election, the Note is convertible into shares of the Company’s common stock, at a price per share equal to 100% of the average closing price of the Company’s common stock for the five trading days immediately preceding the date of such conversion (the “Conversion Price”). The cash maturity date is July 19, 2022. On February 8, 2022 there was a conversion of $150,000 worth of shares issued.

    

During the first quarter of 2022, the Company issued 133,902,874 shares of common stock valued at $53,561 as part of the Company’s employment agreement with the Chief Financial Officer, Peter Stazzone.

 

 
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NOTE 9. NET INCOME (LOSS) PER SHARE OF COMMON STOCK

 

The Company follows ASC 260-10, which requires presentation of basic and diluted Earnings per Share (“EPS”) on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying consolidated financial statements, basic net income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the year. Basic net income (loss) per common share is based upon the weighted average number of common shares outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

Convertible debt that is convertible into 4,780,883,321 and 1,819,902,063 shares of the Company’s common stock are not included in the computation, along with 249,999,900 and 249,999,900 of the Company’s preferred stock after conversion, as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, there are 687,760 shares of series C preferred stock issued and outstanding that are convertible into 6,877,600,000 shares of common stock. Additionally, there are 16,666,667 and 16,666,667 warrants that are exercisable into shares of stock as of March 31, 2022 and December 31, 2021, respectively.

 

The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations as of March 31, 2022 and 2021:

 

 

 

Three-month period ended March 31,

 

 

 

2022

 

 

2021

 

Loss from continuing operations

 

$(651,389)

 

$(6,295,045)

Consolidated net loss

 

$(651,389)

 

$(6,295,045)

Weighted average shares used for diluted earnings per share

 

 

13,682,864,073

 

 

 

4,087,460,718

 

Incremental Diluted Shares

 

                                      -*

 

 

                                      -*

 

Weighted Average shares used for diluted earnings per share

 

 

13,682,864,073

 

 

 

4,087,460,718

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

Basic and Diluted: continuing operations

 

$(0.00)

 

$(0.00)

Basic and Diluted: discontinued operations

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Total Basic and Diluted loss per share

 

$(0.00)

 

$(0.00)

 

*

The shares associated with convertible debt, preferred stock, stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e., reduce the net loss per common share).

 

NOTE 10. SUBSEQUENT EVENTS

 

On April 1, 2022, the “Company entered into a promissory note (the “Note”) in favor of Discover Growth Fund, LLC (the “Discover”), in the aggregate principal amount of $1,200,000 for which the Company received $1,000,000 in cash, reflecting an original issuance discount of 20%, with repayment to be made not later than April 1, 2023. Pursuant to the Note, at any time and from time to time Discover may, in its sole discretion, subject to certain ownership limitations, convert all or any portion of the then outstanding balance of the Note into shares of the common stock of the Company at a price per share equal to the closing bid price on March 31, 2022.

 

On April 8, 2022, the Company executed a binding Letter of Intent (“LOI”) with Electric Built, Inc., headquartered in Inglewood, California. The acquisition will provide the Company exclusive access to Electric Built’s commercial business know-how, intellectual property, and business relationships and operations in electric vehicle fleet service. The Company paid Electric Built an initial payment in the amount of $50,000 in shares of restricted common stock of Beyond Commerce in connection with the execution of a Definitive Agreement, which is being held in escrow. If the closing has not occurred prior to the termination date in the Definitive Agreement, Electric Built shall release such shares and return to the Company.

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for our products, and competition. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the throughout, the words “may”, “will”, “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management are intended to identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and we caution you that these statements are not guarantees of future performance or events and are subject to risks, assumptions, and other factors.

 

The following discussion provides information that management believes is relevant to an assessment and understanding of our past financial condition and plan of operations. The discussion below should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this annual report.

 

About Beyond Commerce

 

Beyond Commerce, Inc. was formed as a Nevada corporation on January 12, 2006.We are focused on business combinations of “big data” companies in global B2B internet marketing analytics, technologies and services. The Company’s objective is to develop and deploy disruptive strategic software technology that will build on organic growth potential and to exploit cross-selling opportunities. We plan to offer a cohesive global digital product and services platform to provide clients with a single point of contact for their big data, marketing and related sales initiatives. We believe our business model will ensure that information will remain secure and private, as necessitated by the current market climate.

 

In addition, we provide solutions which facilitate the exchange of information and data transactions between supply chain participants, such as manufacturers, retailers, distributors and financial institutions, with the ultimate goal of automating potential client internal processes thereby increasing productivity and lowering costs. We plan to develop proprietary algorithms which it will embed in the planned software to enable clients to access data and gain insight into their business, through that data, leading to improved internal decision making.

 

The Company currently owns and operates a data company and is actively seeking acquisition opportunities in high growth sectors such as psychedelics, cryptocurrency, ESports and Logistics among others. The Company’s strategy is to identify companies in the early stages of development or growth, acquire them and provide these companies capital in order to accelerate their development and growth with the intention to ultimately sell these companies.

 

 
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RESULTS OF OPERATIONS

 

Through our Service 800 Inc. subsidiary, many of our clients, such as GE Healthcare, Audiology System, Inc., 3M Healthcare, Johnson & Johnson Vision Care, Albany Molecular Research Inc., Sakura Finetek, Abbott Diagnostics, Biosense Webster, a Johnson & Johnson Company and Medtronic to name a few took the time during the pandemic to begin strategic planning with Service 800 to grow their business with the Company through renewals, expansion, and developing better ways to grow our programs with each and every one of them for the future. This select market segment continues to be a major source of revenue for the Company as we expand our services within this business segment. Renewals have been strong during the last nine months, and we anticipate revenue getting back in line with exceeding our expectations as we progress further into the year. All renewals that have taken place are on a minimum of a one to two-year term with an auto renewal taking place when the contract expires. The pandemic helped our customers recognize the value that Service 800 brings to its clients in the form of providing valuable information to not only help their growth within their own companies, but also help them be better providers to their customers as well. We continue to look forward to growth into each division of these companies and expansion to exceed expectations that have been set. We value these customers and seek to achieve positive growth we have set for the remainder of the year and moving onwards for future years to come.

 

For the Three Months Ended March 31, 2022 and March 31, 2021

 

Revenue

 

Revenue generated for the three months ended March 31, 2022 was $1,009,408 compared to $1,113,519 from the comparable three-month period in 2021.

 

Operating Expenses

 

For three months ended March 31, 2022, operating expenses were $1,560,953 and for the three months ended March 31, 2021, operating expenses were $1,617,759. This decrease is primarily due to a reduction in costs of revenue offset in part by an increase in payroll expense of $51,819, which is attributable to stock based compensation from common stock issued pursuant to employment agreement.

 

Non-Operating Income (Expense)

 

The Company reported non-operating income expense of $99,844 for the three months ended March 31, 2022, as compared to $5,790,805 for the three months ended March 31, 2021, attributable principally to the reduction in derivative liability related expenses of $5,662,995 and a reduction in interest expense of $27,996.

 

Net Income (loss)

 

Loss from operations for the three months ended March 31, 2022 and 2021 was $551,545 and 504,240, respectively. For three months ended March 31, 2022, the Company incurred a net loss of $646,802 as compared to a net loss of $6,290,109 for the three months ended March 31, 2021. The decrease of net loss between the two periods is primarily due to the recognition of derivative related expenses for the three months ended March 31, 2021.

 

Purchase of Significant Equipment

 

We do not anticipate the purchase or sale of any plant or significant equipment during the next twelve (12) months.

 

Going Concern

 

There is substantial doubt about our ability to continue as a going concern.

 

As of March 31, 2022, we had an accumulated deficit of $68,455,400 and a working capital deficit of $4,144,320. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to continue relying upon the issuance of debt and equity securities to finance our operations. In this regard, we are restricted by the number of shares available for issuance in an equity financing, and we will likely need to increase our authorized capital in order to take advantage of such financing. However, there can be no assurance that we will be successful in obtaining shareholder approval to increase our authorized capital, that we will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. Our financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern.

 

 
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Liquidity and Capital Resources

 

Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan. Since inception, we have been funded by related parties through capital investment and borrowing of funds.

 

We had total current assets of $1,330,116 and $1,607,347 as of March 31, 2022 and December 31, 2021, respectively. Current assets would consist primarily of cash and accounts receivable. The Company had a $65,455,400 accumulated deficit on its balance sheet as of March 31, 2022.

 

We had total current liabilities of $5,474,436 and $5,414,772 as of March 31, 2022 and December 31, 2021, respectively. Current liabilities consisted primarily of the derivative liability, accounts payable, accrued payroll and payroll taxes, related party debt, conventional and convertible debt, lease liability, accrued loss contingency, and accrued interest. In the current three months there were approximate increases in accrued interest of $130,000, in accounts payable of $69,000 and in accrued payroll liabilities of $57,000. Short-term borrowings – related party decreased by $150,000 due to the partial conversion on the note for stock, and the value of derivative liabilities decreased by $48,000.

 

We had a working capital deficit of $4,144,320 and $3,807,425 as of March 31, 2022 and December 31, 2021, respectively, which decrease is mainly due to the use of cash or a decrease in cash on hand during the three months ended March 31, 2022.

 

Cash Flow from Operating Activities

 

For the three months ended March 31, 2022 and 2021, cash used in operating activities was $358,912 and $442,360 respectively.

 

Cash Flow from Investing Activities

 

No cash was used in investing activities for the three months ended March 31, 2022 and 2021.

 

Cash Flow from Financing Activities

 

For the three months ended March 31, 2022 and 2021, cash provided by financing activities was $0 and $1,775,000, respectively, which represents $625,000 in cash from the PPP loan received by the Company, $150,000 from a SBA loan and $1,000,000 in cash from the sale of preferred stock.

 

Contractual Obligations

 

As a “smaller reporting company,” we are not required to provide tabular disclosure of contractual obligations.

 

Inflation

 

Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.

 

 
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We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

 

Seasonality

 

In the past, our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, in the event that we succeed in bringing our planned products to market.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, we evaluate past judgments and our estimates, including those related to allowance for doubtful accounts, allowance for inventory write-downs and write offs, deferred income taxes, provision for contractual obligations and our ability to continue as a going concern. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Note 2 to the consolidated financial statements, presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, describes the critical accounting estimates and policies used in preparation of our consolidated financial statements. There were no significant changes in our critical accounting estimates during the three months ended March 31, 2022.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022. Based on the evaluation of our disclosure controls and procedures as of March 31, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls were not effective.

 

As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.

 

Changes in internal controls over financial reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

 
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Limitations on the Effectiveness of Controls

 

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its Principal Executive Officer and its Principal Financial Officer, do not expect that the Company’s controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

 

These inherent limitations include the realities that judgments in decision-making can be faulty, and these breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

 
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PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

A complaint against the Company, dated February 5, 2020, has been filed in Hennepin County, Minnesota, by Jean Mork Bredeson, the former President and former owner of Service 800, making certain claims related to the Company’s acquisition of Service 800, seeking in excess of $1.6 million in damages. On March 16, 2020, the Company and Service 800 filed an answer, counterclaim and third-party claim against Ms. Bredeson and defendants Allen Bredeson and Jeff Schwedinger, former employees of Service 800. Answers and Affirmative and Additional Defenses to Third Party Claims were filed by Ms. Bredeson on April 7, 2020 and by Mr. Schwedinger on April 9, 2020 and, on April 24, 2020, Ms. Bredeson filed a Motion to Dismiss. The Court denied in full Ms. Bredeson’s motion to dismiss or for a more definite statement. Subsequently, using a wholly owned entity she controls, Ms. Bredeson filed another matter, captioned Green Valley Associates Inc. vs Service 800 Inc., 27-CV-20-13800. Although Ms. Bredeson is seeking to have the matters handled by separate judges, the Company sought consolidation of the two matters before Judge Klein, the judge who denied Ms. Bredeson’s motion to dismiss, but the consolidation was denied. Ms. Bredeson also has since filed, and then withdrawn, other motions, without allowing them to reach Judge Klein. Ms. Bredeson’s motion for summary judgment was ruled against by Judge Klein. The discovery has closed in both cases. On March 14, 2022 the judge granted the Company’s motion for sanctions against Bredeson for spoilation of documents that were likely to be relevant in the case. The judge also found that we were likely to be prejudiced by her conduct, so a sanction was warranted. On March 23, 2022 the judge granted the plaintiff’s motion for reimbursement of legal services by the Company incurred in opposing counterclaims brought by the Company in the amount of $95,506 as allowed by Minnesota statutes.

 

The Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 5, states that a firm must distinguish between losses that are probable, reasonably probable or remote. If a contingent liability is deemed probable, it must be directly reported in the financial statements. In July 2010, the FASB issued ASC 450-20 that updated the Standard and uses “probable,” “reasonably possible,” and “remote” to determine the likelihood of the future event that will confirm a loss, an impairment of an asset, or the incurrence of a liability.

 

Accrual of a loss contingency is required when (1) it is probable that a loss has been incurred at the date of the financial statements and (2) the amount can be reasonably estimated. No accrual has been made in the above matter as the determination is that a loss is not probable as of March 31, 2022 nor can a loss be reasonably estimated.

 

 
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In addition to the above, from time to time, we may be involved in litigation in the ordinary course of business. Other than as set forth above, we are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. Other than as set forth above, to our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or any of our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect

 

ITEM 1A. RISK FACTORS.

 

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission on March 31, 2022.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

There were no unregistered sales of equity securities during the period ended March 31, 2022.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

A Convertible Promissory Note, bearing an annual interest rate of 12% secured, due August 27, 2019 remains outstanding and is in default. There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any other indebtedness of the Company.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

There is no other information required to be disclosed under this item which was not previously disclosed.

 

 
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ITEM 6. EXHIBITS.

 

Exhibit Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing Date

 

Herewith

 

 

 

 

 

 

 

 

 

 

 

31.1

 

Rule 13a-14(a) Certification of Principal Executive Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

31.2

 

Rule 13a-14(a) Certification of Principal Financial Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

32.1*

 

Section 1350 Certification of Principal Executive Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

32.2*

 

Section 1350 Certification of Principal Financial Officer.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.INS

 

XBRL Instance.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.XSD

 

XBRL Schema.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.PRE

 

XBRL Presentation.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.CAL

 

XBRL Calculation.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.DEF

 

XBRL Definition.

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

101.LAB

 

XBRL Label.

 

 

 

 

 

 

 

X

       

*

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not deemed filed for purposes of Section 18 of the Exchange Act.

           

 
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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Beyond Commerce, Inc.

 

 

 

 

 

May 12, 2022

By:

/s/ Geordan Pursglove

 

 

 

Geordan Pursglove, President/CEO and

Director (Principal Executive Officer)

 

 

 
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