VIZC VizConnect Inc (PK)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for comprehensive presentation of financial position and results of operations. It is management's opinion that all material adjustments (consisting of normal reoccurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results expected for the year.  

VizConnect, Inc. (the "Company") was setup as a corporation under the laws of the State of Nevada on October 15, 2010. The Company, through its wholly-owned subsidiary, VizConnect LLC, a Massachusetts limited liability company is a holding company which helps companies around the world by providing first class business development consulting. Our growing portfolio encompasses a robust and innovative array of services which include real estate acquisition, equity building, debt removal, revenue generation, and asset acquirement through the issuance of Preferred Stock. Our talented and experienced team is driven to help customers increase value; maximize existing capabilities; improve shareholder performance and profitability; increase cost efficiency; and simplify business strategy. The Company's year-end is December 31. 

On October 29, 2013, the Company formed a majority owned subsidiary to conduct business solely in Canada. The majority owned subsidiary is included in the consolidated financial statements of the Company at its formation. The non-controlling interest investors have contributed $100,000 into the subsidiary, which represents 20% ownership. The Company owns the remaining 80% of the subsidiary. 

On April 22, 2015, the Company filed a Certificate of Amendment to the Articles of Incorporation in the state of Nevada to increase the authorized shares of Common Stock and Preferred Stock to 5,000,000,000 and 50,000,000, respectively. The Company reduced the par value per share of Common and Preferred Stock from $0.001 to $0.00001 per share.

On May 20, 2015, the Company issued 1,200,000 shares of Common Stock to its board of directors converting $30,000 of Accrued Payroll. 

On September 24, 2015, the Company initiated a 1-for-2500 Reverse Stock split; every 2500 shares of issued and outstanding common stock were converted into one share of issued and outstanding common stock. If that number falls below 100, the share amount will be rounded up to 100. All share and per share amounts have been retroactively adjusted in the accompanying financial statements.

On October 1, 2015, the Company issued 600,000,000 shares of Common Stock to its board of directors converting $6,000 of Accrued Payroll. 

(B) Principal of Consolidation

The accompanying 2015 and 2014 unaudited condensed consolidated financial statements include the accounts of VizConnect, Inc., VizConnect LLC and its 80% owned-subsidiary, VizConnect Canada from the date of incorporation (October 29, 2013).

(C) Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include the calculation of deferred revenue during the period and determinations of fair values of certain financial instruments. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

(D) Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At September 30, 2015 and December 31, 2014, the Company had no cash equivalents.

(E) Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740 " Accounting for Income Taxes ". Under this approach, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and their liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

(F) Software Development Costs

We expense software development costs to be marketed to external users with a useful life of less than one year, before technological feasibility of such products is reached. We have determined that technological feasibility is reached shortly before the release of those products and as a result, the development costs incurred after the establishment of technological feasibility and before the release of those products were not material, and accordingly, were expensed as incurred. Software development costs totaled $893 and $48,380 for the nine months ended September 30, 2015 and 2014, respectively. 

(G) Business Segments

The Company operates in one segment and therefore segment information is not presented.

(H) Revenue Recognition

The Company recognizes revenue on arrangements in accordance with FASB ASC No. 605, " Revenue Recognition ". In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. 

The Company recognizes revenue from monthly subscriptions fees in the month in which services are provided. Because a portion of the fees are earned over a month period, any fees collected in which the services are not provided are recorded as deferred revenue.

The Company recognizes revenue from set up fees at the time the initial set up is complete and the fees are earned.

The Company recognizes revenue from distributor membership fees monthly over the one year membership period. Any fees collected in which the services are not provided are recorded as deferred revenue. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

(I) Selling Expenses

The Company incurs selling expenses under a "multi-level" compensation plan, which includes commissions for subscription sales made and bonuses for assisting associated distributors in closing initial subscription sales. Commissions are earned from direct sales as well as the sales made through the sales network they have developed. Accrued commissions payable was $21,640 as of September 30, 2015 and December 31, 2014.

(J) Concentrations

As of September 30, 2015 and 2014, respectively, the Company has no customers whose sales account for more than 10% of total sales.

(K) Property and Equipment

Property and equipment is recorded at cost. Additions and betterments are capitalized; maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the asset's estimated useful life, which is 5 years for furniture. Gains and losses on disposal are charged to operations.

(L) Fair Value Measurements

The Company's capital structure includes the use of convertible debt features that are classified as derivative financial instruments. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value in accordance with FASB ASC 815 " Derivatives and Hedging ". ASC 815 requires that changes in fair value of derivative financial instruments with no hedging designation be recognized as gains (losses) in the earnings statement. Fair value measurement and disclosures are determined in accordance with FASB ASC 820 " Fair Value Measurements and Disclosures ".

FASB ASC 820 establishes a framework for measuring fair value by creating a hierarchy for observable independent market inputs and unobservable market assumptions and expands disclosures about fair value measurements. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the estimates present herein are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

The following inputs are used in the valuation of the financial assets and liabilities.

Level 1 - Inputs represent unadjusted quoted prices for identical assets and liabilities exchanged in active markets.

Level 2 - Inputs include directly or indirectly observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that are considered in fair value determinations of the assets or liabilities, such as interest rates or yield curves that are observable at commonly quoted intervals, volatilities, repayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs, because there is little, if any, market activity in the assets or liabilities or related observable inputs that can be corroborated at the measurement date. Measurements of non-exchange traded derivative contract assets and liabilities are primarily based on valuation models, discounted cash flow models or other valuation techniques that are believed to be used by market participants. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets and liabilities. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

The fair values of financial instruments that include cash and amounts due to related parties were estimated to approximate their carrying values due to the immediate or relatively short maturity of these instruments.

The Company's operations and financing activities are conducted primarily in United States dollars, and as a result are not subject to significant exposure to market risks from changes in foreign currency rates. Management has determined that the Company is not exposed to significant credit risk.

The following is a summary of liabilities measured at fair value on a recurring basis at September 30, 2015:

The following is a summary of liabilities measured at fair value on a recurring basis at December 31, 2014:

The changes in derivatives measured at fair value for which, the Company has used Level 3 inputs to determine fair value at September 30, 2015 are as follows:

The following is a description of the valuation methodology used for liabilities measured at fair value.

Conversion feature liability - The fair value of the derivative instrument was estimated using the Black Scholes option pricing model. (See Note 6) 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

(M) Re-classifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company's net loss or cash flows.

(N) Loss per Share

The Company computes net loss per share in accordance with FASB ASC 260 " Earnings per Share ". ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

The following summarizes potential anti-dilutive shares:

(O) Recent Account Pronouncements

In April 2015, FASB issued Accounting Standards Update ("ASU") No. 2015-03, " Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" , is to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15 on "Presentation of Financial Statements Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" . Currently, there is no guidance in U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for public and non-public entities for annual periods ending after December 15, 2016. Early adoption is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

NOTE 2. GOING CONCERN

The Company had a net loss of $224,398,546 attributable to common stockholders for the nine months ended September 30, 2015, an accumulated deficit of $228,692,778 and a working capital deficit of $226,002,359 as of September 30, 2015. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital through the implementation of its business plan which encompasses a robust and innovative array of services which include real estate acquisition, equity building, debt removal, revenue generation, and asset acquirement through the issuance of Preferred Stock. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding through implementing its strategic plans, marketing strategy and sales incentives to expand operations will provide the opportunity for the Company to continue as a going concern.

NOTE 3. NOTES PAYABLE-RELATED PARTY

During 2011, the Company entered into two notes payable for a total of $22,500. The Notes have an interest rate of 10%, are unsecured, and due March 15, 2012. On February 14, 2014, these Notes plus accrued interest were converted into a new Note due on November 14, 2014 with an interest rate of 15% and premium interest of 20% beginning November 14, 2014. During the year ended December 31, 2014, $7,500 was repaid. The Company also converted $4,848 of interest to principal on the Notes. During 2014, the Company entered into two notes payable for a total of $5,000 with no interest, are unsecured, and due on demand. As of September 30, 2015 and December 31, 2014, the total amount outstanding is $24,848. Accrued interest totaled $7,243 and $3,475 as of September 30, 2015 and December 31, 2014, respectively. The maturity date has been extended to August 31, 2015 and is in default. On September 1, 2015, the Company entered into a convertible note financing transaction with an employee converting $15,000 of Accrued Payroll. This note matures on demand. It bears interest at 10% per annum. The note is convertible into Common Stock at the lender's option with a conversion rate equal to $0.00001 per share, unless otherwise modified by mutual agreement between the Parties.

NOTE 4. NOTES PAYABLE

During 2011, the Company entered into a note payable for $15,000. The Note has an interest rate of 2% monthly, is unsecured, and due on demand. As of September 30, 2015 and December 31, 2014, the total amount outstanding is $13,000. Accrued interest totaled $13,180 and $10,840 as of September 30, 2015 and December 31, 2014, respectively.

In January, 2014, the Company entered into two notes payable for a total of $20,000. The Notes have an interest rate of 15% per year, are unsecured, have maturity dates that have been extended to May 31, 2015 and are in default. 

In February, 2014, the Company entered into a note payable for $10,000. The Note has an interest rate of 15% per year, is unsecured, the maturity date has been extended to May 31, 2015 and is in default.

In March, 2014, the Company entered into a note payable for $60,000. The Note has a lump sum interest payment due of $4,000, is unsecured, the maturity date has been extended to May 31, 2015 and is in default.

On March 26, 2014, the Company entered into a note payable for $100,000. The Note had an interest rate of 10%, increasing to 20% beginning January 1, 2015, with a late payment premium of 22% on the principal and interest. A lump sum of $10,000 is due upon repayment, and is unsecured. In the second quarter of 2014, the Company accreted $10,000 of the original issuance discount. As of September 30, 2015 and December 31, 2014, the total amount outstanding is $67,671. Accrued interest totaled $23,377 and $0 as of September 30, 2015 and December 31, 2014, respectively. The Note was in default as of March 31, 2015 for which the note holder has commenced legal proceedings for $675,000 plus interest and attorneys' fees. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

On May 15, 2014, the Company entered into a note payable for $100,000. The Note has an interest rate of 10% with a lump sum of $20,000 due upon repayment, and is unsecured. In the second and third quarters of 2014, the Company accreted $20,000 of the original issuance discount. As of September 30, 2015 and December 31, 2014, the total amount outstanding is $96,302. Accrued interest totaled $7,303 and $0 as of September 30, 2015 and December 31, 2014, respectively. The Note was in default as of March 31, 2015 for which the note holder has commenced legal proceedings. 

On July 17, 2014, the Company entered into a $75,000 Note with an interest rate of 15%. The Note was in default as of June 30, 2015. 

On October 21, 2014, the Company entered into two notes payable for a total of $20,000. The Notes have lump sum interest payments due totaling $6,667, and are unsecured. The maturity dates have been extended to August 31, 2015 and are in default.

On December 4, 2014, the Company entered into a note payable for $5,000. The Note has a lump sum interest payment due of $2,000, is unsecured, the maturity date has been extended to May 31, 2015 and is in default.

NOTE 5. CONVERTIBLE NOTES PAYABLE 

During 2013, the Company received various unsecured convertible loans totaling $215,250 and converted loans payable in the amount of $310,000 to convertible notes payable of which $186,710 were converted to common stock in 2014. These notes have interest rates of 8% and 12% per year and mature on February 6, 2018 and March 1, 2018. During 2013, the Company repaid one convertible note payable in the amount of $42,500. During the first quarter of 2014, the Company received $133,000 of convertible notes payable, one for $75,000 with a discount of $25,000 for a term of three months, and one for $58,000 with an interest rate of 8% per year for a term of eight months. During the first quarter of 2014, the Company repaid loans of $42,500, $59,000 and $32,750 less $9,208 of discount. During the second quarter of 2014, the Company repaid a loan of $42,500. During the third quarter of 2014, the Company received $355,583 of convertible notes payable, one for $55,833 with an interest rate of 12% for a term of two years, one for $78,750 with an interest rate of 8% for a term of one year, one for $68,000 with an interest rate of 8% for a term of nine months, one for $53,000 with an interest rate of 8% for a term of nine months, and two $50,000 notes with interest rates of 12% for terms of six months. During the third quarter of 2014, the Company repaid loans of $58,000 and $75,000. During the fourth quarter of 2014, the Company received $107,000 of convertible notes payable, one for $25,000 with an interest rate of 8% for a term of one year, one for $57,000 with an interest rate of 10% for a term of one year, and one for $25,000 with an interest rate of 12% for a term of six months. During the first quarter of 2015, the Company issued 57,767 shares of common stock pursuant to the conversion of $110,308 of Convertible Notes and interest. During the second quarter of 2015, the Company received $3,350 of a convertible note payable with an interest rate of 10% due on demand and $54,500 of convertible preferred stock notes payable with an interest rate of 12%. During the third quarter of 2015, the Company received $18,500 of convertible notes payable with interest rates of 10% and due on demand. During the third quarter of 2015, the Company issued 145,020 shares of common stock pursuant to the conversion of $ 20,055 of Convertible Notes and interest.

The Company is in default on two convertible notes payable dated July 17, 2014 due January 17, 2015 and dated August 25, 2014 due February 25, 2015 for which the note holder has commenced legal proceedings for $100,000 plus accrued interest and attorneys' fees.

The convertible notes payable can be converted following a holding period provided in the respective promissory notes. The conversion into shares of Common Stock is based upon either i.) the lowest closing price of our stock during certain number of trading days prior to the conversion date, subject to conversion price discounts that vary from 50% to 60% discount, or ii.) conversion prices ranging from $.00001 to $0.14 per share. In addition, these notes include price protection terms, which would reset the per-share purchase price if the Company were obligated to convert other liabilities at a lower per share purchase price. The convertible Preferred Stock notes payable can be converted following a holding period into shares of Series B Preferred Stock at $2.50 per share. Each share of Series B Preferred Stock can be converted into shares of Common Stock at par value of $.00001 per share. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

The following is a summary of the unsecured convertible loans: 

In Summary, during the first nine months ended September 30, 2015 and for the year ended December 31, 2014, the Company received $61,350 and $996,973 of notes payable, respectively, including convertible notes payable; the notes received during the first nine months ended September 30, 2015 have maturity terms ranging from on demand to six months and interest rates from 10% to 12%. The Notes contain various conversion rates and prepayment penalties. For the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company has repaid $0 and $430,778 of principal, respectively, and all of the notes have been retired.

Interest and amortization of debt discount recognized for the nine month periods ended September 30, 2015 and September 30, 2014 were $421,492 and $730,658 respectively.

NOTE 6. DERIVATIVES

The company has a balance of convertible notes totaling $587,141 with certain investors. The notes can be converted following a holding period provided in the promissory note agreement, and at a set price per share, subject to certain re-set provision. This includes price protection terms, which would reset the per-share purchase price if the Company were obligated to convert other convertible liabilities at a lower per share purchase price.

The derivative liability is recorded at fair value on the Company's financial statements, and any changes in their fair value are included in the consolidated statement of operations as a non-cash item. 
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015
(UNAUDITED)

The derivative liability is revalued and reported at fair value of $223,946,744 and $600,271 as of September 30, 2015 and December 31, 2014 respectively.

The fair value of the convertible notes was estimated using the Black Scholes option pricing model with the following assumptions for the nine months ended September 30, 2015.

NOTE 7. STOCKHOLDERS' EQUITY

In the first quarter of 2015, the Company issued 57,767 shares of common stock pursuant to the conversion of $110,308 Convertible Notes and interest. 

The Company is required to reserve 24,281 shares of common stock under the convertible note agreements. 

On February 10, 2015, the board of directors of the Company authorized a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock, designating three (3) shares of a new series of preferred stock, par value $0.001 per share, as "Series A Preferred Stock" all of which were issued to our three officers, valued at $0. The Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on February 10, 2015. Holder(s) of outstanding shares of Series A Preferred Stock shall be entitled to the number of votes equal to the total number of Company's common stock outstanding as of the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company and entitled to vote on all matters submitted or required to be submitted to a vote of the stockholders of the Company. The Certificate was approved by our board and did not require shareholder vote. The Series A Preferred Stock did not have a dividend rate or liquidation preference, and were not convertible into shares of common stock. On the same date, the Company issued one share of Series A Preferred Stock to each of the Company's three Directors. 

On February 26, 2015, the Company issued 600 shares of Common Stock to an employee with a fair value of $1,799.

On May 20, 2015, the Company issued 1,200,000 shares of Common Stock to its board of directors converting $30,000 of Accrued Payroll. 

On May 14, 2014, the Company entered into a one year consulting agreement for 200 shares of common stock of which 50 vest per quarter. The Company expensed the fair value of $47 and $10,715 related to the portions earned through September 30, 2015 and December 31, 2014, respectively.  
  

VIZCONNECT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

(UNAUDITED)

On May 18, 2015, the board of directors of the Company authorized a Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock, designating 10,000,000 shares of a new series of preferred stock, par value $0.00001 per share, as "Series C Preferred Stock." The Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May 18, 2015. 

On March 24, 2015, the Company filed a Certificate of Amendment to the Articles of Incorporation in the state of Nevada to increase the authorized shares of Common Stock to 2,000,000,000 having a par value of $0.001. 

On May 29, 2015, the board of directors of the Company authorized a Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock, designating 10,000,000 shares of a new series of preferred stock, par value $0.00001 per share, as "Series B Preferred Stock." The Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May 29, 2015. Holder(s) of the Series B Preferred Stock shall be entitled, among others, conversion rights that may convert each share of Series B Preferred Stock into the number of shares of Company's common stock equal to the price of the Series B Preferred Stock divided by the par value of the Series B Preferred Stock and voting rights equal to ten votes for each share held for any election or matter before the shareholders of the Company.

On April 22, 2015, the Company filed a Certificate of Amendment to the Articles of Incorporation in the state of Nevada to increase the authorized shares of Common Stock and Preferred Stock to 5,000,000,000 and 50,000,000, respectively. The Company reduced the par value per share of Common and Preferred Stock from $0.001 to $0.00001 per share. All share and per share amounts have been retroactively restated in the financial statements.