WEBSAFETY, INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2013 and 2012
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For the year ended
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For the year ended
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December 31, 2013
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December 31, 2012
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$
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(907,757)
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$
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(1,142,743)
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Adjustments to reconcile net loss to net cash used in operating activities
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Depreciation and amortization expense
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3,160
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48,585
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Interest expense
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2,500
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-
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Loss on extinguishment of debt
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166,928
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-
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Amortization of beneficial conversion
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285,780
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537,592
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Amortization of debt discount
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1,710
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-
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Derivative revaluation
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(116)
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-
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Derivative liability
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13,564
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-
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Stock compensation expense
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-
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385,796
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Stock issued for services - non-cash
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25,000
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102,000
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Gain on adjustment of Loss Contingency
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-
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(325,000)
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Income from forgiven accounts payable
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(10,297)
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-
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Income from forgiven accrued interest
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(854)
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-
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Changes in operating assets and liabilities:
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Increase in prepaid expense
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-
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-
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Increase (decrease) in deposit
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-
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-
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Increase (decrease) in accounts payable
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2,640
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(172,201)
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Decrease in Loss Contingency
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-
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(75,000)
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Increase (decrease) in accrued interest
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10,139
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-
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Increase (decrease) in accrued expense
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(8,209)
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(16,740)
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NET CASH USED IN OPERATING ACTIVITIES
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(415,812)
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(657,711)
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Increase (decrease) in cash overdraft
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-
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(700)
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Decrease in liability to issue shares
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-
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(25,000)
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Loan repayments
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(17,735)
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Proceeds from borrowing
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40,000
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446,056
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Proceeds of advances from shareholders
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351,290
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280,482
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Proceeds from sale of common stock
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-
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-
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NET CASH PROVIDED BY FINANCING ACTIVITIES
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391,290
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683,103
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NET CHANGE IN CASH
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(24,522)
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25,392
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Cash at beginning of period
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25,392
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-
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Cash at end of period
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$
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870
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$
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25,392
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SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
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Interest paid
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$
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-
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$
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-
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Income tax paid
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$
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-
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$
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-
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NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Conversion of accrued expenses to common stock
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$
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13,619
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$
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-
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Conversion of notes to common stock
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$
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186,569
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$
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514,400
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Conversion of accrued expenses to preferred stock
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$
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52,713
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$
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-
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Conversion of notes to preferred stock
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$
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547,287
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$
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-
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The accompanying notes are an integral part of these financial statements.
F-6
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WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
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Note 1. Background Information
Organization and Business
Websafety, Inc. was originally incorporated as Promotions on Wheels Holdings, Inc.in July 2006 and was a development stage company with planned operations to offer live promotions and marketing events using custom-built mobile displays.
In 2008, we entered into a License Agreement with WQN, Inc. that provided us exclusive rights for 12 months to market and sell their software products to various national retail chains and that also provided us with a nonexclusive right to market and sell worldwide. In 2009 we acquired Websafety Technology from WQN, Inc. in exchange for 1,350,000 post-split shares of our common stock and totaling $2,700,000.
Presently we are focused on worldwide marketing, selling, and distributing Internet software applications for cellphones. These Websafety and Cellsafety products help protect children from suspicious online behavior and cyberbullying.
The Company is currently revising and updating its software applications and intends to re-launch it during 2014.
Note 2. Significant Accounting Policies
Basis of Presentation
The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC. The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (GAAP) of the United States.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2013, and for all periods presented herein, have been made.
Cash and Cash Equivalents
For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $870 and $25,392 at December 31, 2013 and 2012, respectively.
Cash Flows Reporting
The Company follows ASC 230,
Statement of Cash Flows
, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (Indirect method) as defined by ASC 230,
Statement of Cash Flows
, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
F-7
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WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
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Commitments and Contingencies
The Company follows ASC 440, Commitments and ASC 450, Loss Contingencies, to report accounting for commitments and contingencies.
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies at December 31, 2013 and 2012.
Convertible Notes Payable
The Company evaluated the terms of their outstanding notes in accordance with ASC Topic No. 815 - 40,
Derivatives and Hedging - Contracts in Entitys Own Stock
and determined that a portion of their outstanding debt had underlying common stock not indexed to the Companys common stock. The Company determined that the conversion feature met the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. For all other remaining outstanding debt, the Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be less than the market value of underlying common stock at the inception of the note.
The Company recognized beneficial conversion features in the amounts of $230,089 and $562,125 for the periods ended December 31, 2013 and 2012, respectively. The beneficial conversion features were recognized as increases in additional paid-in capital and discounts to the Convertible Notes Payable. The discount to the Convertible Notes Payable was amortized to interest expense over the life of the note.
Earnings per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260,
Earnings per Share
. Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
For the years ended December 31, 2013 and 2012, the effect of common stock equivalents has been excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive.
The Company does not have any potentially dilutive instruments as of December 31, 2013 and, thus, anti-dilution issues are not applicable.
At December 31, 2013, there were 1,990,000 stock options outstanding.
Fair Value of Financial Instruments
The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
F-8
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WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
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Level 1. Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2. Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3. Pricing inputs that are generally unobservable inputs and not corroborated by market data.
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Companys financial assets and liabilities, such as cash, accounts payable, accrued expenses and loans payable approximate their fair values because of the short maturity of these instruments. Loans payable are recorded at their issue value.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature.
Property & Equipment
Property and equipment are stated at cost. Depreciation was calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Expenditures for additions and improvements were capitalized, while repairs and maintenance costs were expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of were removed from the accounts and any gain or loss was recorded in the year of disposal. Depreciation expense for the years ended December 31, 2013 and 2012 was $3,160 and $3,155, respectively.
The Company follows ASC 985-20,
Costs of Software to be Sold, Leased, or Marketed.
Intangible property assets are stated at their fair value acquisition cost. Costs are expensed prior to technological feasibility and capitalized thereafter until available for general release to the public. After the software is brought to market, the costs of maintenance and customer support will be charged to expense when related revenue is recognized or when the costs are incurred. Amortization of intellectual property assets is calculated by the straight line method over their remaining estimated economic lives and starts when the software is available for general release to customers. Amortization is expensed to cost of sales. Historical costs are reviewed and evaluated for their net realizable value of the assets. Amortization expense for the years ended December 31, 2013 and 2012 was $0 and $45,430.
Related Parties
The Company follows ASC 850,
Related Party Disclosures,
for the identification of related parties and disclosure of related party transactions. Related party transactions for the periods ending December 31 2013 and 2012 were comprised of convertible notes payable (see Note 6) and related part debt converted to equity (see Note 10).
F-9
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WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
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Stock Based Compensation
ASC 718,
Compensation - Stock Compensation
, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50,
Equity - based Payments to Non-Employees.
Measurement of share-based payment transactions with non-employees is 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 is determined at the earlier of performance commitment date or performance completion date.
Research and Development
Research and development expenses include expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software product, is generally shortly before the products is released to manufacturing. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated life of the product.
Recently Issued Accounting Pronouncements
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the
FASB Accounting Standards Codification
(ASC) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.
We have reviewed the FASB issued Accounting Standards Update (ASU) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporations reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.
Reclassification
Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation in the current-year financial statements.
Note 3. Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of approximately $14,052,387 from the period of July 3, 2006 (Inception) through December 31, 2013 and has used significant cash in support of its operating activities raising substantial doubt about the Companys ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Companys plan. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
F-10
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WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
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Note 4. Property and Equipment
The Company follows ASC 360,
Property, Plant, and Equipment,
for its fixed assets. Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets (3-7 years). All equipment with an acquisition value greater than $500 and a useful life of over one year is capitalized.
Property and equipment consist of the following at December 31, 2013 and December 31, 2012:
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2013
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2012
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Property and Equipment
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Equipment
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$
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16,689
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$
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16,689
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Less accumulated depreciation and amortization
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(13,554)
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(10,394)
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Total property and equipment
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$
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3,135
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$
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6,295
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Depreciation expense for the years ended December 31, 2013 and 2012 totaled $3,160 and $3,155 respectively.
Note 5. Accrued expenses
Accrued expenses consisted of professional fees, primarily of legal fees due to a related party and audit and review fees.
Note 6. Convertible Notes Payable - Shareholders
Unless otherwise stated, all convertible notes payable-shareholders are due on demand and bear interest at a rate of 5%. Unless otherwise stated, holders have the right to convert at any time all or any unpaid principal and interest into shares of the Companys common stock at a price equal to $0.00075 per share. The holder of all but one of the convertible notes is Rowland W Day II, a related party. See Note 10.
The Companys convertible promissory notes payable to shareholders consisted of the following:
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December 31, 2013
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December 31, 2012
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December 31, 2013; $99,092
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$
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99,092
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$
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---
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December 31, 2013; $60,250
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60,250
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---
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September 30, 2013; $17,372
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16,994
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---
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September 30, 2013; $53,375
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53,375
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---
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June 30, 2013; $37,440
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37,440
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---
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June 30, 2013; $54,000
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54,000
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---
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March 31, 2013; $20,813
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20,813
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---
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March 31, 2013; $9,398
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---
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---
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December 31, 2012; $3,771
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---
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3, 771
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December 31, 2012; $9,237
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9,237
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9,237
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September 30, 2012; $57,437
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45,437
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45,437
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September 30, 2012; $16,132
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---
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16,132
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June 30, 2012; $18,063
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---
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18,063
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June 30, 2012; $83,125
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83,125
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83,125
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April 1, 2012; $30,000.
Convertible at $0.005 per share.
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30,000
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30,000
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March 31, 2012; $62,250
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62,250
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62,250
|
March 31, 2012; $12,467
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---
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12,467
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December 31, 2011; $7,250
|
|
---
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|
|
7,250
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December 31, 2011; $15,952
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|
15,952
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15,952
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October 4, 2011; $516,134
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|
115,330
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|
|
366,134
|
October 4, 2011; $229,401
|
|
---
|
|
|
229,400
|
|
$
|
703,295
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|
$
|
899,218
|
F-11
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WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
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During the years ended December 31, 2013 and 2012, a total of $547,287 and $173,373, respectively, was converted. During the years ended December 31, 2013 and 2012, $0 and $12,000, respectively, was repaid in cash.
In June 2012, the Company authorized a change in conversion of Rowland Days notes from $.005 to $0.0075. That authorization should have been for $0.00075. Effective September 1, 2013, the conversion rate of the notes was modified from $0.005 to $0.00075. The Company evaluated the application of ASC 470-50,
Debtors Accounting for a Modification or Exchange of Debt Instrument
as it applies to the notes described above
The debt transaction is considered an extinguishment since the fair value of the embedded conversion option changed by more than 10% of the carrying amount of the original debt instrument(s) immediately before the modification or exchange. This change resulted in an additional beneficial conversion of the debt which is recorded as a loss on extinguishment of debt and totaled $166,928.
Note 7. Notes Payable
Unless otherwise stated all notes payable are convertible, due on demand and bear interest at a rate of 8%. Unless otherwise stated, all or any unpaid principal and interest are convertible into shares of the Companys common stock at a price equal to $0.005 per share.
The Companys convertible promissory notes payable consisted of the following at:
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December 31, 2013
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December 31, 2012
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|
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|
October 22, 2013; $42,500. Due July 24, 2014; Interest rate 8%.
Convertible at a price equal to 58% of the market price.
|
$
|
42,500
|
|
$
|
---
|
October 1, 2012; $8,769
|
|
---
|
|
|
8,769
|
September 19, 2012; $63,000. Due June 21, 2013; Interest rate 8%.
Convertible at a price equal to 58% of the market price.
|
|
---
|
|
|
63,000
|
July 5, 2012; $63,000. Due April 10, 2013; Interest rate 8%.
Convertible at a price equal to 61% of the market price.
|
|
---
|
|
|
63,000
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June 6, 2012; $18,800
|
|
---
|
|
|
18,800
|
April 9, 2012; $63,054. Due August 31, 2012
|
|
63,054
|
|
|
63,054
|
February 27, 2012; $13,000
|
|
---
|
|
|
13,000
|
February 24, 2012; $20,000
|
|
---
|
|
|
20,000
|
July 23, 2010; $11,228. Interest rate of 5%. Not convertible.
|
|
11,228
|
|
|
11,228
|
Unamortized discount on notes payable
|
|
(11,854)
|
|
|
(50,919)
|
|
$
|
104,928
|
|
$
|
209,932
|
During the year ended December 31, 2013 and 2012, a total of $186,569 and $345,761, respectively was converted. During the years ended December 31, 2013 and 2012 no amounts were repaid in cash.
Based on the intrinsic value of the conversion feature, the Company determined that there was a beneficial conversion feature associated with some of the notes payable and all the shareholders notes. As a result of the beneficial conversion feature exceeding the proceeds received from the promissory notes, management discounted the notes 100% and will amortize this discount over the life of the note. During the years ended December 31, 2013 and 2012, amortization of the beneficial conversion feature was $285,780 and $537,592, respectively. As of December 31, 2013, the total unamortized discount on notes was $11,854.
Note 8. Derivative Liability
The Company issued convertible notes payable that provide for the issuance of common stock with variable conversion provisions. The conversion terms of the convertible note are variable based on certain factors, such as the future price of the Companys common stock. The number of shares of common stock to be issued is based on the future price of the Companys common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable was not a fixed number, pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option was recorded as derivative liabilities on the issuance date.
F-12
|
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
|
The fair values of the Companys derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date. The Company recorded current derivative liabilities of $13,448 and $0 at December 31, 2013 and December 31, 2012, respectively. The change in fair value of the derivative liabilities resulted in a gain of $116 and $0 for the twelve months ended December 31, 2013 and 2012, respectively, which has been reported as other income (expense) in the statements of operations.
The fair value of the conversion provision was determined using Level III inputs through the Black-Scholes Option pricing model with the following inputs:
| |
Stock Price
|
$0.0016 - 0.0018
|
Exercise Price
|
$0.016 - 0.002
|
Term
|
6 months
|
Risk-Free Rate
|
0.13%
|
Dividend Yield
|
0%
|
Volatility
|
119.7 - 125.3%
|
Note 9. Equity
Preferred Shares
The authorized preferred stock of the Company consists of 50,000,000 shares with a par value of $0.001.
Series A
There were 2,063,335 shares of Preferred Stock,
Series A
issued and outstanding at December 31, 2013 and 2012.
Conversion rights -
The holders of the Series A Preferred Stock have the right to convert any or all of their Series A Preferred Stock, at the option of the holder, at any time, into common stock on a one for 1.25 basis.
Series B
There were 1,000 and 0 shares of Redeemable Preferred Stock,
Series B
issued and outstanding at December 31, 2013 and 2012.
Voting rights
- The Series B Preferred Stock is entitled to 5 times that number of votes multiplied by the number of shares of common stock into which the Series B Preferred Stock are convertible.
Dividend rights
- The Series B Preferred Stock shall not pay dividend.
Conversion rights
- The holders of the Series B Preferred Stock have the right to convert any or all of their Series B Preferred Stock, at the option of the holder, at any time, into common stock on a one for 909,090,909 basis.
Redemption rights -
The holders of the Series B Preferred Stock may at each holders option to cause the Company to redeem any of shares or all shares of Series B Preferred Stock at a price of six hundred dollars ($600) per share.
Liquidation entitlement
- In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the funds and assets of the Company that may be legally distributed to the Companys shareholders shall be distributed to shareholders.
The Company has classified the Series B Preferred Stock as temporary equity because it is redeemable at the option of the holder.
On June 28, 2013, the Company issued 1,000 shares, to a related party, at $600 per share and totaling $600,000.
F-13
|
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
|
Common Shares
In January 2014, the Company completed a 1-for-20 reverse stock split of our common stock, effective as of January 6, 2014. As a result of the reverse stock split, every 20 shares of issued and outstanding common stock have been converted into one share of the Companys common stock. The following gives retroactive effect to the reverse split.
The authorized common stock of the Company consists of 1,500,000,000 shares with a par value of $0.001. There were 31,931,665 and 16,395,315 shares of common stock issued and outstanding at December 31, 2013 and at December 31, 2012, respectively.
On December 31, 2013, 150,000 shares were issued at $0.0029 per share and totaling $8,579, in exchange for satisfaction of accounts payable.
On July 3, 2013, the Company issued 250,000 shares, at $0.001 per share and totaling $5,000, to a director in exchange for services rendered and another 1,000,000, also at $0.001 and totaling $20,000 per share to a consultant in exchange for administrative services rendered.
On June 30, 2013 the Company issued 3,174,600 shares at $0.0023 per share and totaling $60,568 in settlement of convertible notes payable.
On June 12, 2013 the Company issued a total of 485,000 shares at $0.0006 per share and totaling $5,820 in settlement of convertible notes payable.
On May 24, 2013 the Company issued a total of 2,222,223 shares at $0.0005 per share and totaling $24,000 in settlement of convertible notes payable.
On May 9, 2013 the Company issued a total of 1,698,276 shares at $0.0008 per share and totaling $19,700 in settlement of convertible notes payable.
On April 22 and 24, 2013 the Company issued a total of 2,715,094 shares at $0.0005 per share and totaling $27,820 in settlement of convertible notes payable.
On April 12, 2013 the Company issued a total of 954,545 shares at $0.0006 per share and totaling $10,500 in settlement of convertible notes payable.
In March 2013, the Company issued a total of 1,627,119 shares at $0.0006 per share and totaling $19,200 in settlement of convertible notes payable.
On February 20, 2013, the Company issued 759,493 shares at $0.0008 per share and totaling $12,000 in settlement of convertible notes payable.
On January 14, 2013, 500,000 shares were issued at $0.0012 per share and totaling $12,000 in settlement of convertible notes payable.
Note 10. Related Party Transactions
Consulting, Legal, and Administrative Services
These services consist of management oversight of the operations of the Company; research and development of the products, review of financial operations, capital raising and meetings with investors, potential investors, preparation of the Companys SEC reports and documents for the Companys operations.
F-14
|
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2013 and 2012
|
In the aggregate, during the year ended December 31, 2013, the Company owed to related parties as reflected below.
|
|
|
|
|
|
|
| |
|
Consulting,
legal and
administrative
|
Loan
|
Accrued Interest
|
Total
|
Rowland W. Day II
|
$
|
618,861
|
$
|
54,433
|
$
|
16,454
|
$
|
689,748
|
Fowler
|
|
---
|
|
30,000
|
|
---
|
|
30,000
|
|
$
|
618,861
|
$
|
84,433
|
$
|
16,454
|
$
|
719,748
|
Rowland W. Day II is our CEO, CFO and Chairman of the Board, as well as, a principal owner of the company.
Convertible Notes Payable
See Note 7 for the components of the convertible notes payable at December 31, 2013 and 2012.
Equity - Preferred
On June 28, 2013, the Company issued 1,000 shares, to a related party, at $600 per share and totaling $600,000.
Equity - Common
On July 3, 2013, the Company issued 250,000 common shares, at $0.001 per share and totaling $5,000, to a director in exchange for services rendered. The director is also the sister of the companys sole officer.