Quarterly Report (10-q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended: September 30, 2018

 

OR

 

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

 

For the transition period from __________ to __________

 

Commission File No. 333-174894

 

CYBERFORT SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		38-3832726
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

 

388 Market Street, Suite 1300

San Francisco, CA 94111

(Address of principal executive offices)

 

[phone]

(Registrant’s telephone number, including area code)

 

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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (Check one):

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a 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 12b-2 of the Exchange Act). Yes o No x

 

As of November 14, 2018 there were 33,758,785 shares of common stock, par value $0.001 per share, outstanding.

 

Documents incorporate by reference: None.

 

TABLE OF CONTENTS

 

			PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)			4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			17
Item 4.	Controls and Procedures			17
PART II - OTHER INFORMATION
Item 1	Legal Proceedings.			18
Item 1A.	Risk Factors			18
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds			18
Item 3	Defaults Upon Senior Securities.			18
Item 4.	Mine Safety Disclosures			18
Item 5.	Other Information			18
Item 6.	Exhibits			19
SIGNATURES				20

 

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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

 

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

In this Report, unless otherwise noted or as the context otherwise requires: “the Company,” “we,” “us,” “our,” and “Cyberfort” refers to Cyberfort Software, Inc.

 

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PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Cyberfort Software, Inc.

Index to the Financial Statements (Unaudited)

September 30, 2018

 

		Page
Unaudited Balance Sheets as of September 30, 2018 and March 31, 2018			5
Unaudited Statements of Operations for the three and six months ended September 30, 2018 and 2017			6
Unaudited Statements of Cash Flows for the six months ended September 30, 2018 and 2017			7
Unaudited Notes to Financial Statements			8

 

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Cyberfort Software, Inc.

Balance Sheets

(Unaudited)

 

		September 30, 2018				March 31, 2018
ASSETS
Current assets
Cash		$	382			$	652
Prepaid expenses			-				-
Total current assets			382				652
TOTAL ASSETS		$	382			$	652
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable		$	321,784			$	115,841
Accrued expenses			3,237				399,907
Accrued compensation			25,000				100,000
Convertible notes payable			87,991				52,441
Notes payable			93,500				150,000
Total current liabilities			531,512				818,189
Total liabilities			531,512				818,189
Commitments
Stockholders' deficit:
Common stock, $0.001 par value - 100,000,000 share authorized, 32,508,785 and 8,612 shares issued and outstanding at September 30, 2018 and March 31, 2018 having given effect to the reverse stock split effective April 19, 2018			32,509				9
Additional paid-in capital			4,041,440				3,338,626
Accumulated deficit			(4,605,079	)			(4,156,172	)
Total stockholders' deficit			(531,130	)			(817,537	)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT		$	382			$	652

 

See accompanying notes to the financial statements.

 

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Cyberfort Software, Inc.

Statements of Operations

(Unaudited)

 

		Three Months Ended								Six Months Ended
		September 30,								September 30,
		2018				2017				2018				2017
Net revenue		$	-			$	-			$	-			$	-
Operating expenses:
Selling, general and admin. expenses			41,709				34,718				77,414				70,829
Loss on conversion of accrued compensation			-				-				344,285				-
Stock compensation expense			12,500				12,500				25,000				25,000
Total operating expenses			54,209				47,218				446,699				95,829
Loss from operations			(54,209	)			(47,218	)			(446,699	)			(95,829	)
Other (expenses)/income
Interest expense			(1,579	)			-				(2,208	)			-
Total other (expenses)/income			(1,579	)			-				(2,208	)			-
Net loss		$	(55,788	)		$	(47,218	)		$	(448,907	)		$	(95,829	)
Loss per common share - basic and diluted		$	(0.00	)		$	(6.30	)		$	(0.02	)		$	(11.19	)
Weighted average common shares outstanding - basic and diluted			32,087,416				7,489				28,014,076				8,560

 

See accompanying notes to the financial statements.

 

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Cyberfort Software, Inc.

Statements of Cash Flows

(Unaudited)

 

		Six Months Ended
		September 30,
		2018				2017
Cash flows from operating activities:
Net loss		$	(448,907	)		$	(95,829	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation			25,000				25,000
Loss on conversion of accrued compensation			344,285				-
Changes in operating assets and liabilities:
Prepaid expenses			-				4,167
Accounts payable and accrued expenses			43,802				55,693
Stock payable			-				6,200
Net cash used in operating activities			(35,280	)			(4,769	)
Cash flows from financing activities:
Net proceeds from convertible notes payable			35,550				525
Net cash provided by financing activities			35,550				525
Net change in cash			(270	)			(4,244	)
Cash at the beginning of the period			652				4,424
Cash at the end of the period		$	382			$	180
Supplemental disclosures of cash flow information:
Cash paid for income taxes		$	-			$	-
Cash paid for interest		$	-			$	-
Non-cash investing and financing transactions:
Common stock issued for conversion of note payable		$	56,500			$	-

 

See accompanying notes to the financial statements.

 

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Cyberfort Software, Inc

Notes to Financial Statements

(Unaudited)

 

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

 

BASIS OF PRESENTATION

 

Interim Accounting

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ended March 31, 2019.

 

The Company's 10-K for the year ended March 31, 2018, filed on July 25, 2018, should be read in conjunction with this Report.

 

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 $382 and $652 in cash as of September 30, 2018 and March 31, 2018, respectively.

 

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Cyberfort Software, Inc

Notes to Financial Statements

(Unaudited)

 

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 2018. 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 September 30, 2018, and March 31, 2018, the Company has an accumulated deficit of $4,605,079 and $4,156,172, respectively. 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 continue its operations is dependent upon, among other things, obtaining additional financing. 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.

 

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Cyberfort Software, Inc

Notes to Financial Statements

(Unaudited)

 

NOTE 4 - RELATED PARTY ADVANCES

 

As of September 30, 2018, and March 31, 2018, the Company did not have any related party transactions, respectively.

 

NOTE 5 - NOTES PAYABLE

 

The Company assumed a non-interest bearing Note Payable of $150,000 with a maturity date of March 18, 2017 as a part of the acquisition of the Vivio App in September 2016. The Company is negotiating with the Note holder to amend the Note’s terms. On June 19, 2018, $28,250 of the Note was converted into 1,250,000 shares of the Company’s common stock. On July 31, 2018, $28,250 of the Note was converted into 1,250,000 shares of the Company’s common stock. As of September 30, 2018, the balance of the Note was $93,500. The Note is in default.

 

NOTE 6 - CONVERTIBLE NOTES PAYABLE

 

On October 4, 2017, the Company entered into a convertible loan agreement for $12,500 with an interest rate of 8% per annum and a maturity date of October 3, 2018. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On November 10, 2017, the Company entered into a convertible loan agreement for $5,466 with an interest rate of 8% per annum and a maturity date of November 9, 2018. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On December 14, 2017, the Company entered into a convertible loan agreement for $13,300 with an interest rate of 8% per annum and a maturity date of December 13, 2018. The loan is convertible into the Company’s common stock at the market value on the date of conversion

 

On January 24, 2018, the Company entered into a convertible loan agreement for $3,000 with an interest rate of 8% per annum and a maturity date of January 23, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On February 13, 2018, the Company entered into a convertible loan agreement for $11,000 with an interest rate of 8% per annum and a maturity date of February 12, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On March 26, 2018, the Company entered into a convertible loan agreement for $2,200 with an interest rate of 8% per annum and a maturity date of March 25, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On March 31, 2018, the Company entered into a convertible loan agreement for $4,974 with an interest rate of 8% per annum and a maturity date of March 30, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On June 28, 2018, the Company entered into a convertible loan agreement for $18,540 with an interest rate of 8% per annum and a maturity date of June 27, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

On September 28, 2018, the Company entered into a convertible loan agreement for $15,890 with an interest rate of 8% per annum and a maturity date of September 27, 2019. The loan is convertible into the Company’s common stock at the market value on the date of conversion.

 

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Cyberfort Software, Inc

Notes to Financial Statements

(Unaudited)

 

NOTE 7 - STOCKHOLDERS’ DEFICIT

 

On April 19, 2018, the Company underwent a reverse stock split at a ratio of 10,000 to 1 share, reducing the issued and outstanding shares from 86,123,796 to 8,612 shares issued and outstanding as of the date of the reverse split. All share amounts in these financial statements and footnotes reflect the reverse stock split.

 

On March 29, 2018, the Company issued 19 shares of common stock in completion of various Stock Subscription Agreements executed during fiscal 2018.

 

On April 19, 2018, the Company issued 30,000,000 shares, post-split, to the Company’s President as repayment for accrued compensation and accrued stock payable. On April 19, 2018, the Board of Directors approved the transaction which resulted in a 96% ownership of the Company.

 

On June 19, 2018, the Company issued 1,250,000 shares of its common stock for conversion of a note payable.

 

On July 31, 2018, the Company issued 1,250,000 shares of its common stock for conversion of a note payable.

 

Under the employment agreement with the CEO, the Company is required to grant shares of restricted stock after each anniversary date. At September 30, 2018 and March 31, 2018, the company has accrued compensation for shares earned but not issued of $25,000 and $100,000, respectively. The number of shares will be determined based upon market value of the stock at the point in time of issuance.

 

As of September 30, 2018, and March 31, 2018 there were 32,508,785 and 8,612 shares of common stock issued and outstanding, respectively having given effect to the 10,000 to 1 reverse stock split completed on April 19, 2018.

 

NOTE 8 - SUBSEQUENT EVENTS

 

On October 11, 2018, the Company issued 1,250,000 shares of its common stock for conversion of a note payable.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This quarterly report on Form 10-Q and other reports filed by Cyberfort Systems, Inc. (the “Company”) from time to time with the SEC (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. 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 Filings, the words “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 identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

 

Overview

 

Cyberfort Software, Inc. (“Cyberfort Software” or the “Company”) was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc. From January 2013 until September 2016, the Company was in the business of acquiring and establishing profitable berry farms throughout the United States. The main focus of the Company was on blueberry production with a secondary focus on strawberry and raspberry production. Since September 2016, the Company has pursued opportunities in the cybersecurity technology business sector. The Company plans to acquire potential technologies, positioning itself to deal with the various and increasing cyber threats through innovative protection technologies for mobile, personal and business tech devices, stretching across a number of the available platforms.

 

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. to support the total rebranding and change in sector for the company.

 

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On September 20, 2016, Company and Ferlin Corp. (“Ferlin”) entered into an Assignment Agreement pursuant to which Ferlin assigned to the Company all of Ferlin’s right title and interest in the Vivio application, including the Vivio Source Code Application (i.e., 18,277 lines of iOS) (the “Application”) in exchange for common stock of the Company. The Company shall issue to Ferlin one million five hundred thousand (1,500,000) shares of the Company’s common stock (“Shares”), as follows:

 

	1.	Seven hundred and fifty thousand (750,000) Shares upon the Effective Date of the Assignment Agreement; and
	2.	Seven hundred and fifty thousand (750,000) Shares upon transfer of title of the Application to Assignee.

 

Ferlin and Mistrin PTY, LTD (“Mistrin”) entered into that certain Purchase Agreement dated June 6, 2016 (the “Purchase Agreement”) pursuant to which Ferlin acquired the interest in the Application.

 

Ferlin has previously paid to Mistrin the first two payments, totaling fifty thousand dollars ($50,000) that were due under the Section 3 of the Purchase Agreement. The Company has agreed to pay the remaining payments in accordance with the Assignment Agreement as follows:

 

	1.	Fifty thousand dollars ($50,000) on or before September 26, 2016;
	2.	Fifty thousand dollars ($50,000) on or before December 25, 2016, and
	3.	Fifty thousand dollars ($50,000) on or before March 18, 2017.

 

Additionally, the Purchase Agreement requires the company to provide $10,000 per calendar month for marketing and development of the enterprise code.

 

As of the date of filing, the Company has not made any of the required payments and is behind on development payments. The Company is in the process of amending the Purchase Agreement with Mistrin, which will restructure the remaining payments and ensure all obligations are fulfilled.

 

Description of Business

 

Vivio is an iOS 10 app that allows users to experience the web the way it is supposed to be, faster and cleaner, but without compromising their online safety. Vivio not only removes ads from the websites visited in Safari, Google Chrome Extension, and Mozilla Firefox, it also saves the user’s data traffic and data traffic costs up to 50% and results in longer battery life.

 

The Vivio enterprise suite will include a range of privacy centric, data/bandwith optimizations and permission based controls for companies to ensure the safety of devices used by their employees to safeguard against advertising malware and usage options. Some of the features will feature current Vivio technology provided in the consumer version with enterprise made enhancements which will include:

 

	·	ad blocking (enhanced malware detection)
	·	privacy protection
	·	reduction of data costs and bandwidth usage
	·	faster website browsing
	·	better battery performance
	·	cloud based ad blocking rule updates
	·	url blocking with the ability to optimize preferences on a company basis
	·	cloud based management suite to send application for download to employee’s enabling visibility on device usage, browsing and a range of analytical tools
	·	API to integrate into existing mobile enterprise management companies, who can add on Vivio’s proprietary ad blocking engine to their suite of features

 

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Business Location

 

The Company is based in San Francisco, California, with principal executive offices located at 388 Market Street, Suite 1300, San Francisco, California 94111 and our telephone number is [phone].

 

Plan of Operation

 

The company’s overall plan is to identify and acquire potential technologies, positioning itself to deal with the various and increasing cyber threats through innovative protection technologies for mobile, personal and business tech devices, stretching across a number of the available platforms. The Company plans to concentrate on completing the final development stage and marketing of the Vivio app.

 

Results of Operations

 

For the Three Months Ended September 30, 2018 Compared to the Three Months Ended September 30, 2017

 

Revenues

 

During the three months ended September 30, 2018 and 2017, we did not generate any revenues.

 

Operating Expenses

 

We incurred operating expenses in the amount of $54,209 during the three months ended September 30, 2018 compared to $47,218 for the corresponding period in 2017. This difference of $6,991, is primarily due to an increase in professional and accounting fees during the period.

 

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Other (expenses)/income

 

We incurred other expenses of $1,579 consisting of interest expense in the current quarter, compared to $0 in the corresponding period in 2017.

 

Net Loss

 

We incurred a net loss of $55,788 during the three months ended September 30, 2018, compared to a net loss of $47,218 for the corresponding period in 2017.

 

For the Six Months Ended September 30, 2018 Compared to the Six Months Ended September 30, 2017

 

Revenues

 

During the six months ended September 30, 2018 and 2017, we did not generate any revenues.

 

Operating Expenses

 

We incurred operating expenses in the amount of $446,699 during the six months ended September 30, 2018 compared to $95,829 for the corresponding period in 2017. This difference of $350,870, is primarily due to the loss on conversion of accrued compensation.

 

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Other (expenses)/income

 

We incurred other expenses of $2,208 consisting of interest expense for the six months ended September 30, 2018, compared to $0 in the corresponding period in 2017.

 

Net Loss

 

We incurred a net loss of $448,907 during the six months ended September 30, 2018, compared to a net loss of $95,289 for the corresponding period in 2017.

 

Liquidity and Capital Resources

 

As reflected in the accompanying financial statements, the Company had a net loss of $448,907 at September 30, 2018, a working capital deficit of $531,130 and accumulated deficit of $4,605,079 at September 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Net cash used in our operating activities during the three months ended September 30, 2018 was $35,280 as compared to $4,769 for the same period ended September 30, 2017 an increase of $30,511. This increase of cash used was due to a cost associated with the Company’s issuance of stock to management which are non-reoccurring one time charges.

 

Net cash provided by investing activities during the six months ending periods September 30, 2018 and 2017 was $0 and $0, respectively.

 

Net cash provided by financing activities during the six months ending September 30, 2018 was $35,550 as compared to $525 for the same period ended September 30, 2017. This increase resulted from proceeds from convertible notes received during the six months ended September 30, 2018.

 

We are a technology driven company. We are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive industry. Due to the absence of a long standing operating history and the emerging nature of the markets in which we compete, we anticipate operating losses until we can successfully implement our business strategy, which includes all associated revenue streams. Our revenue model is new and evolving, and we cannot be certain that it will be successful. The potential profitability of this business model is unproven. We may never achieve profitable operations or generate significant revenues. Our future operating results depend on many factors, including demand for our products, the level of competition, and the ability of our officers to manage our business and develop a substantial and stable revenue base. Additional development expenses may delay or negatively impact the ability of the Company to generate profits. Accordingly, we cannot assure you that our business model will be successful or that we can sustain revenue growth, achieve or sustain profitability, or continue as a going concern. The growth and development of our business will require significant amounts of additional working capital. There is no certainty that the Company will be able to raise the amount of funds needed or at a price that it finds acceptable. The Company may need to incur liabilities with certain related parties to sustain the Company’s existence.

 

Since its inception, the Company has financed its cash requirements from the sale of common stock and advances from related party. Uses of funds have included activities to establish our business, professional fees and other general and administrative expenses.

 

We believe the Company will need additional resources to implement its strategic objectives in upcoming quarters. Due to our lack of operating history, there currently exists substantial doubt about our ability to continue as a going concern. As of September 30, 2018, the Company has an accumulated deficit of $4,605,079. 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 continue as a going concern 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.

 

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Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements as of September 30, 2018, including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

We do not hold any derivative instruments and do not engage in any hedging activities.

 

Item 4. Controls and Procedures.

 

(a) Evaluation of Disclosure Controls and Procedures.

 

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our PEO and PFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

 

(b) Changes in Internal Control over Financial Reporting.

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. 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 the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or 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 are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

On April 19, 2018, the Company underwent a reverse stock split at a ratio of 10,000 to 1 share, reducing the issued and outstanding shares from 86,123,796 to 8,612 shares issued and outstanding as of the date of the reverse split.

 

On April 19, 2018, the Company issued 30,000,000 shares, post-split, to the Company’s President as repayment for accrued compensation and accrued stock payable

 

On June 19, 2018, the Company issued 1,250,000 shares of its common stock for conversion of a note payable.

 

On July 31, 2018, the Company issued 1,250,000 shares of its common stock for conversion of a note payable.

 

On October 11, 2018, the Company issued 1,250,000 shares of its common stock for conversion of a note payable.

 

Item 3. Defaults Upon Senior Securities.

 

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 indebtedness of the Company.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

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Item 6. Exhibits.

 

(a) Exhibits

 

Exhibit Number		Description
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**		XBRL Instance Document
101.SCH**		XBRL Taxonomy Schema
101.CAL**		XBRL Taxonomy Calculation Linkbase
101.DEF**		XBRL Taxonomy Definition Linkbase
101.LAB**		XBRL Taxonomy Label Linkbase
101.PRE**		XBRL Taxonomy Presentation Linkbase

____________

*	In accordance with SEC Release 33-8238, Exhibit 32.1 is furnished and not filed.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Cyberfort Software, Inc.
Date: November 14, 2018	By:	/s/ Daniel Cattlin
		Daniel Cattlin
		President (Principal Executive Officer) and Treasurer (Principal Financial Officer)

 

 

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