CYBF Cyberfort Software Inc (CE)

Item 8. Financial Statements and Supplementary Data.

See accompanying notes to the financial statements.

See accompanying notes to the financial statements.

See accompanying notes to the financial statements.

See accompanying notes to the financial statements.

Cyberfort Software, Inc.

Notes to the Financial Statements  

NOTE 1 - ORGANIZATION

Cyberfort Software, Inc. (formerly known as Patriot Berry Farms, Inc.) (Cyberfort or “The “Company”) was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc. On September 26, 2016, the board of directors and the majority shareholders of the Patriot Berry Farms, Inc. approved an amendment to the Articles of Incorporation of the Company to change its name from Patriot Berry Farms, Inc. to Cyberfort Software, Inc. Cyberfort is in the business of developing, marketing, and acquiring software security technology.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with original maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $4,424 and $0 in cash as of March 31, 2017 and 2016, respectively.

INCOME TAXES

The Company accounts for income taxes under FASB ASC 740 "Income Taxes." Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and 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. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 "Equity - Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: ( a ) the goods or services received; or ( b ) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.

NET INCOME OR (LOSS) PER SHARE OF COMMON STOCK

The Company has adopted ASC 260 “Earnings per Share,” (“EPS”) which requires presentation of basic and diluted 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 financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

RECLASSIFICATION

For comparability, certain prior year amounts have been reclassified, where appropriate, to conform to the financial statement presentation used in 2017. The reclassifications have no impact on net loss.

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2017 and 2016, the Company has an accumulated deficit of $3,918,548 and $2,569,399. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations. In response to this and other potential problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 - PROPERTY AND EQUIPMENT

In fiscal 2014, the Company acquired an operational blueberry farm for $402,765, including equipment. The Company paid $122,765 in cash and issued a Note Payable for $280,000. During fiscal 2015, the Company defaulted on the Note Payable and took an impairment loss of $159,766 related to the farm.

In April 2015, the Company sold the blueberry farm, including equipment, at a selling price of $235,000 to the original seller. The Company and the Buyer entered into a mortgage note for $25,000 out of the total $235,000 which was paid by the Buyer on July 15, 2015. The net proceeds of the sale of the farm were used to repay the $200,000 balance of the Note Payable and the related transaction cost. As of March 31, 2016, the outstanding balance of the Note Payable is $0 and the accrued penalty fees of $12,000 was forgiven. During fiscal 2016, the Company recorded depreciation expense of $461.

NOTE 5 - INTANGIBLE ASSETS

On September 20, 2016, the Company entered into an Assignment Agreement with Ferlin Corp. to assume a Purchase and Sale Agreement between Ferlin Corp and Mistrin Pty, Ltd. that results in the Company effectively purchasing the title, rights, and interest to a software application, (including the source code) in exchange for various consideration. Under the Assignment and the assumed Purchase and Sale Agreement with Mistrin, the Company has assumed a non-interest bearing, unsecured Note Payable to Mistrin for $150,000, will issue 10,688,588 shares of common stock, valued at $0.085 per share, to the seller, assignor, and various individuals, and received $40,000. Consequently, the Company has recorded intangible property related to the transaction of $1,018,530. The Company has not fully issued all the required shares of common stock as of March 31, 2017. They will issue the shares as soon as practicable. However, the Company has treated all shares as issued and outstanding within these financial statements.

Per the Purchase and Sale Agreement, the Company was required to make a $50,000 payment related to the assumed Note Payable on September 25, 2016. As of the March 31, 2017, the note payable is past due and the Company has yet to make the required payment and is in Material Breach of said agreement. Additionally, the Purchase and Sale Agreement obligates the Company to hire several identified individuals, fund $10,000 of marketing and development cost per month, and migrate the acquired technology into an Enterprise Class security software product prior to being able to begin the effort of generating revenue. During the year ended March 31, 2017, the Company incurred $34,000 marketing and development expenses.

The Company is in negotiations with the Assignor and Seller to amend the various agreements to enable the Company to raise additional funds in order for the Company to accomplish the execution of its current business plan. There are no guarantees that the Company will be able to renegotiate the agreements, raise the required funds, or successfully execute its business plan.

Consequently, the Company determined that the acquired intangible property’s value was impaired as of September 30, 2016, due to the material breach and significant uncertainties related to its business plan and has written off the entire value of the intangible property at that date. However, the company intends to continue to its efforts to develop the Applications technology and execute its current business plan.

NOTE 6 - RELATED PARTY ADVANCES

On July 7, 2016, the current President advanced $29,000 to pay certain accounts payable on behalf of the Company.

On July 29, 2016, the Company issued 290,000 shares of Company’s common stock to its current President to reimburse $29,000 paid on behalf of the Company.

On July 29, 2016, the Company issued 100,000 shares of Company’s common stock to its current President, in consideration to reimburse $10,000 settlement payment that was advanced by its current President on behalf of the Company in December 2014.

As of March 31, 2017 and March 31, 2016, the balance of related party advances is $0 and $10,000 respectively.

NOTE 7 - STOCKHOLDERS ’ EQUITY

On July 25, 2016, the Company issued 1,000,000 shares of its common stock to its current President, par value $0.001 per share, for the service rendered. 500,000 shares of common stock have been valued at $0.50 per share for the year ended March 31, 2015 and 500,000 shares of common stock have been valued at $0.10 per share for the year ended March 31, 2016. The stock based compensation expenses were recognized over the service period.

On July 29, 2016, the Company issued 290,000 shares of Company’s common stock to its current President as reimburse $29,000 paid on behalf of the Company.

On July 29, 2016, the Company issued 100,000 shares of Company’s common stock to its current President, in consideration to reimburse $10,000 settlement payment that was advanced by its current President on behalf of the Company in December 2014.

On September 20, 2016, the Company issued 1,970,588 shares of its common stock, par value $0.001, to Ferlin Corp for Assignment of the Purchase and Sale Agreement and $40,000 cash as further discussed in Note 4 - Intangible Assets. The Company has not fully issued all the required shares of common stock at this time. They will issue the shares as soon as practicable. However, the Company has treated all shares as issued and outstanding within these financial statement.

On September 27, 2016, the Company issued 8,718,000 shares of its common stock at a value of $0.085 per share as further discussed in Note 4 - Intangible Assets. The Company has not fully issued all the required shares of common stock at this time. They will issue the shares as soon as practicable. However, the Company has treated all shares as issued and outstanding within these financial statement.

On October 27, 2016, the Company issued 86,928 shares of its common stock for cash proceeds of $10,000.

On November 3, 2016, the Company issued 106,684 shares of its common stock for cash proceeds of $10,000.

On November 17, 2016, the Company issued 87,840 shares of its common stock for cash proceeds of $10,000.

The Company has received cash capital contributions of $60,000 under Subscription Agreements to issue 172,996 shares of common stock; however, as of March 31, 2017, the Agreements have not been executed by the investors and the common stock has not been issued.

Under the employment agreement with the CEO, the Company is required to grant shares of restricted stock after each anniversary date. At March 31, 2017, the company has accrued a stock payable for shares earned but not issued of $50,000. The number of shares will be determined based upon market value of the stock at the point in time of issuance.

As of March 31, 2017 and 2016 there were 85,759,911 and 73,399,871 shares of common stock issued and outstanding, respectively.

NOTE 8 - COMMITMENTS

On September 28, 2016, the Company entered into four consulting agreements with consultants to act in the role of Technology Development Manager, Chief Technology Officer, Corporate Development Officer, and Advisory Director and to provide consulting services as part of the Purchase and Sale Agreement with Mistrin (See Note 4). The term of the agreements shall be one year and shall be a rolling contract until terminated or extended. The Company shall issue each consultant a total of 200,000 shares of common stock per annum to a total of 800,000 shares per annum. The consulting agreements can be terminated after 90 days by either party for any reason and the consultant is entitled to receive the entire consideration.

The Company has reflected it’s issuance of all committed shares related to the consulting agreements as part of the consideration paid pursuant to the Purchase and Sale Agreement with Mistrin (See Note 4).

NOTE 9 - GAIN O N SETTLEMENT OF DEBT

During the year ended March 31, 2016, the Company recorded a gain on settlement of accounts payable of $12,000.

NOTE 10 – INCOME TAXES

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax assets, consisting of net operating loss carryforwards and intangible assets, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended March 31, 2017 and 2016, respectively, under ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet.

The Company is subject to United States income taxes at a rate of 34%. Operating loss carry forwards totaled approximately $1,785,000 and $1,504,000, as of March 31, 2017 and 2016, respectively, and will begin to expire in 2032. Deferred tax assets of approximately $953,200 and $511,500, respectively, were offset by a valuation allowance.

Actual income tax expense for the years ended March 31, 2017 and 2016 is reconciled from the amount computed by applying the U.S. federal income tax rate of 34% to losses before income taxes as follows: