Exhibit 10.10 Financial Statements








POOLWORKS (GERMANY) LTD.

Financial Statements

December 31, 2016










Report of Independent Registered Public Accounting Firm

2




Balance Sheets

3




Statements of Comprehensive Income

4




Statements of Changes in Members’ Equity

5




Statements of Cash Flow

6




Notes to the Financial Statements

7





















1












Report of Independent Registered Public Accounting Firm




To the Board of Directors




Momentous Entertainment Group, Inc. 

Sugar Land, TX




We have audited the accompanying balance sheets of Poolworks (Germany) Ltd. (the Company) as of December 31, 2016, and 2015, and the related statements of comprehensive income, stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.




We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.




In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2016, and 2015, and the results of its operations and its cash flows for the years then, in conformity with U.S. generally accepted accounting principles.




The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




Thayer O’Neal Company, LLC




/s/ Thayer O’Neal Company, LLC




Houston, Texas 

April 26, 2017









2









										
	POOLWORKS (GERMANY) LTD.


	BALANCE SHEETS


	December 31, 2016 and 2015


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	ASSETS

	 
	 
	 
	 
	2016

	 
	2015


	Current assets

	 
	 
	 
	 
	 
	 

	 
	Cash and cash equivalents

	 
	$

	42,909

	$

	20,993


	 
	Accounts receivable, net

	 
	 
	18,190

	 
	154,402


	 
	Total current assets

	 
	 
	 
	61,099

	 
	175,395


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Property and Equipment, net

	 
	 
	9,955

	 
	16,155


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Other assets

	 
	 
	 
	 
	6,816

	 
	8,512


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Total assets

	 
	 
	$

	77,871

	$

	200,062


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	LIABILITIES AND MEMBERS’ EQUITY

	 
	 
	 

	Current liabilities

	 
	 
	 
	 
	 
	 

	 
	Accounts payables

	 
	 
	$

	3,903,004

	$

	3,736,426


	 
	Accrued expense

	 
	 
	 
	2,554,860

	 
	2,105,886


	 
	Tax payable

	 
	 
	 
	15,636

	 
	11,476


	 
	Total current liabilities

	 
	 
	6,473,500

	 
	5,853,788


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Non-current liabilities

	 
	 
	 
	 
	 
	 

	 
	Note payables - related party

	 
	 
	34,061,074

	 
	35,276,139


	 
	Accrued interest - related party

	 
	9,577,925

	 
	8,595,174


	 
	 
	 
	 
	 
	 
	43,638,998

	 
	43,871,313


	Other payables

	 
	 
	 
	6,505

	 
	3,855


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Total liabilities

	 
	 
	 
	50,119,004

	 
	49,728,956


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Members’ Equity

	 
	 
	 
	 
	 
	 

	 
	Accumulated deficit

	 
	 
	 
	(57,273,478)

	 
	(54,908,290)


	 
	Accumulated other comprehensive income

	 
	7,232,346

	 
	5,379,396


	 
	Total members’ equity

	 
	 
	 
	 
	(50,041,133)

	 
	(49,528,894)


	 
	


Total liabilities and members' equity

	$

	77,871

	$

	200,062


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	See accompanying notes to the financial statements















3









									
	POOLWORKS (GERMANY) LTD.


	STATEMENTS OF COMPREHENSIVE INCOME


	For the Years ended December 31, 2016 and 2015


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	2016

	 
	2015


	Revenue

	 
	 
	 
	$

	380,167

	$

	604,353


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Operating Expenses

	 
	 
	 
	 
	 
	 

	 
	Salaries and benefits

	 
	 
	237,749

	 
	231,634


	 
	Social security and expenses for pensions and assistance

	 
	45,308

	 
	45,213


	 
	Depreciation expense

	 
	 
	7,709

	 
	23,384


	 
	Server cost

	 
	 
	 
	120,631

	 
	120,400


	 
	Bad Debt Expense

	 
	 
	 
	18,192

	 
	20,506


	 
	Insurance

	 
	 
	 
	748

	 
	859


	 
	Rent expenses

	 
	 
	 
	27,288

	 
	54,065


	 
	Advertising

	 
	 
	 
	12,729

	 
	19,946


	 
	Travel

	 
	 
	 
	 
	3,675

	 
	9,713


	 
	Professional fees

	 
	 
	 
	616,414

	 
	756,189


	 
	Interest expense

	 
	 
	 
	1,350,094

	 
	1,314,603


	 
	Other operating expenses

	 
	 
	317,532

	 
	466,317


	 
	  Total Operating expense

	 
	 
	2,758,069

	 
	3,062,827


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Income (loss) from operations

	 
	 
	(2,377,902)

	 
	(2,458,474)


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Other income (loss)

	 
	 
	 
	12,713

	 
	22,609


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Net income (loss)

	 
	 
	$

	(2,365,189)

	$

	(2,435,865)


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Other comprehensive income

	 
	 
	 
	 
	 

	 
	Translation adjustment

	 
	 
	1,852,950

	 
	5,379,396


	Total comprehensive income (loss)

	$

	(512,238)

	$

	2,943,530


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	See accompanying notes to the financial statements















4









											
	POOLWORKS (GERMANY) LTD.


	STATEMENTS OF CHANGES IN MEMBERS' EQUITY


	For the Years ended December 31, 2016 and 2015


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Accumulated

Deficit

	 
	Accumulated

Comprehensive

Income (loss)

	 
	Total

Members'

Equity


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Balance at January 1, 2015

	$

	(52,472,425)

	$

	-

	$

	(52,472,425)


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Activity for the year ended December 31, 2015

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Net income (loss)

	 
	(2,435,865)

	 
	-

	 
	(2,435,865)


	 
	 
	Other comprehensive income (loss)

	 
	-

	 
	5,379,395

	 
	5,379,396


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Balance at December 31, 2015

	 
	(54,908,290)

	 
	5,379,396

	 
	(49,528,894)


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Activity for the year ended December 31, 2016

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Net income (loss)

	 
	(2,365,189)

	 
	-

	 
	(2,365,189)


	 
	 
	Other comprehensive income (loss)

	 
	-

	 
	1,852,950

	 
	1,852,950


	 
	 
	 
	 
	 
	 
	 
	 
	 

	Balance at December 31, 2016

	$

	(57,273,478)

	$

	7,232,346

	$

	(50,041,133)


	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	See accompanying notes to the financial statements













































5









										
	POOLWORKS (GERMANY), LTD


	STATEMENTS OF CASH FLOW


	For the Years ended December 31, 2016 and 2015


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	2016

	 
	2015


	CASH FLOWS FROM OPERATING ACTIVITIES

	 
	 
	 
	 
	 
	 

	Net (loss)

	 
	 
	 
	 
	 
	$

	(2,365,189)

	$

	(2,435,865)


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

	 
	-

	 
	-


	Depreciation and Amortization

	 
	 
	 
	 
	 
	7,709

	 
	23,384


	(Increase) Decrease in:

	 
	 
	 
	 
	 
	 
	-

	 
	-


	Accounts Receivable

	 
	 
	 
	 
	 
	137,495

	 
	858,644


	Accounts Payable

	 
	 
	 
	 
	 
	 
	312,915

	 
	3,801,145


	Other Liabilities

	 
	 
	 
	 
	 
	 
	557,363

	 
	2,085,189


	Interest Payable

	 
	 
	 
	 
	 
	 
	1,373,838

	 
	(4,341,222)


	Cash Flows Provided (used) by Operating Activities

	 
	 
	 
	24,131

	 
	(8,725)


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	CASH FLOWS FROM INVESTING ACTIVITIES:

	 
	 
	 
	 
	 
	 

	Purchase of Property and Equipment

	 
	 
	 
	 
	(1,787)

	 
	(1,446)


	Decrease in Other Assets

	 
	 
	 
	 
	 
	1,468

	 
	(8,659)


	Cash Flows Provided by Investing Activities

	 
	 
	 
	 
	(319)

	 
	(10,105)


	


Effect of exchange rate in cash

	 
	 
	 
	 
	 
	(1,896)

	 
	(4,153)


	Net increase (decrease) in cash

	 
	 
	 
	 
	 
	21,916

	 
	(22,982)


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Cash and cash equivalents

	 
	 
	 
	 
	 
	 
	 
	 

	Cash, beginning of period

	 
	 
	 
	 
	 
	 
	20,993

	 
	43,975


	Cash, end of period

	 
	 
	 
	 
	 
	$

	42,909

	$

	20,993


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Supplemental cash disclosures

	 
	 
	 
	 
	 
	 
	 
	 

	Interest paid

	 
	 
	 
	 
	 
	$

	-

	$

	-


	Income taxes paid

	 
	 
	 
	 
	 
	$

	-

	$

	-


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	See accompanying notes to the financial statements

































6









POOLWORKS (GERMANY) LTD.

Notes to the Financial Statements

December 31, 2016 and 2015




NOTE 1-ORGANIZATION 




Poolworks (Germany) Ltd. is a German company with offices in Berlin and registered in the U.K. The company is a 100% subsidiary of VZ Network Holdings, Inc., a Delaware company. Poolworks (Germany) Ltd. (the “Company”) owns and operates the social-media networking platforms studiVZ and meinVZ, directed and offered primarily to individuals located in the Republic of Germany.




The studiVZ platform was founded in 2005 in Berlin and received investment capital from Lukasz Gadowski, Georg von Holtzbrinck Publishing Group (Holtzbrinck) and the Samwer brothers. It was acquired along with meinVZ by Georg von Holtzbrinck Publishing Group in 2007 for 85 million euros and then by financers Michael Pope and Adam Levin in 2012. Today, studiVZ and meinVZ have more than 10 million registered users and over 45 million page impressions per month, largely with the German-speaking countries of Germany, Switzerland and Austria. 




NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Basis of Accounting




The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information and with the rules and regulations of the United States Securities and Exchange Commission.




Use of Estimates and Assumptions




Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260. 




Cash Equivalents




For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. 




Current Receivables




FASB ASC 310 states that allowances for doubtful accounts should be deducted from the related receivables and appropriately disclosed. FASB ASC 31-10-50-4 requires, as applicable, any unearned income, unamortized premiums and discounts, and net unamortized deferred fees and costs be disclosed in the financial statements. Under FASB ASC 825, fair value disclosure is not required for trade receivables when the carrying amount of the trade receivable approximates its fair value. 




Property and Equipment




Property and equipment of the Company is stated at cost. In accordance with AST Topic 360, Property, Plant and Equipment, expenditures for fixed assets that substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred. Depreciation is provided principally on the straight-line method over the estimated useful life of the asset.






7









Revenue Recognition




The Company follows ASC 605-10-S99-1 for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all the following criteria are met:




i.

persuasive evidence of an arrangement exists;

ii.

the services have been rendered to the customer;

iii.

the sales price is fixed or determinable; and

iv.

collectability is reasonably assured. 




Recently Issued Accounting Pronouncements




The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.




The Company is an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. 




Subsequent Events




The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them with the SEC and the EDGAR system.




NOTE 3-GOING CONCERN




The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, The Company has very limited financial resources, with working capital and net shareholder deficits and had generated limited revenue as of December 31, 2016.




While the Company is undertaking its business plan to generate additional revenues, the Company’s cash position may not be sufficient to support the Company’s basic business plan and product development efforts. Management believes that the actions presently underway to increase the number of contracts undertaken have a realistic chance of succeeding. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.




The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.




NOTE 4-ACCOUNTS RECEIVABLE




The Company records accounts receivable for advertising contracts for ads on the studiVZ and meinVZ websites in the period in which they are earned. Accounts receivable, net are as follows:




					
	 
	 
	2016

	 
	2015


	Accounts Receivable

	$

	209,771

	$

	317,850


	Allowance for Bad Debts

	 
	(191,581)

	 
	(163,448)


	Accounts Receivable, Net

	$

	18,190

	$

	154,402












8









NOTE 5-PROPERTY AND EQUIPMENT




The Company purchased office equipment, computers and computer hardware and had a net balance of $9,955 at December 31, 2016 and $ 16,155 at December 31, 2015.




NOTE 6-ACCOUNTS PAYABLE AND ACCRUED EXPENSES




At December 31, 2016 and 2015, the Company had balances of $3,903,004 and $3,736,423 in accounts payable respectively. 




At December 31, 2016, the Company recorded invoices from Georg von Holtzbrinck Publishing Group (former owner) of $3,338,036 for reimbursement of Telefonica server invoices that were paid by Holtzbrinck. The Company recorded $551,448 in invoices from devbliss, gmbH for operating costs, and $13,520 in miscellaneous operating payables. 




At December 31, 2016 and 2015, the Company accrued management fees and related-party invoices of $2,554,860 and $2,105,886, respectively. 




NOTE 7-TAXES PAYABLE




The Company records Value Added Tax (VAT) for invoices that is a net of taxes charged on invoices and taxes received on purchases. The balance at December 31, 2016 and 2015 is $15,636 and $11,476, respectively. 




NOTE 8-NOTES PAYABLES RELATED PARTY




At December 31, 2016, the Company recorded $34,061,074 in Notes Payable to Shareholders for past investments, originally invested by the Georg von Holtzbrinck Publishing Group, prior to 2012, and remained on the books by Vert Capital. The Company also recorded interest payable of $9,577,925, accrued at 8% per annum at December 31, 2016. At December 31, 2015, The Company recorded $35,276,139 in Notes Payable and $8,595,174 in accrued interest payable. 




During 2016 and 2015, Vert Capital charged 50,000 Euros per month for management fees. As of December 31, 2016, and 2015, the Company expensed $553,215 and $665,810 respectively for the management fees to Vert Capital. 




NOTE 9-OPERATING LEASES




On February 15, 2016, the Company extended the term of the office lease from February 15, 2016 to February 28, 2018 at a monthly rate of $1,794 per month. The five-year lease commitment is as follows. 




							
	Description

	Original Date

	Extended Term

	Monthly Payment

	<1 yr

	1yr-5yr

	Lease Deposit


	 
	 
	 
	 
	 
	 
	 

	ANH Hausbesitz

	2/15/16

	2/15/16 – 2/28/18

	$1,794

	$21,522

	$3,588

	-







NOTE 10-SUBSEQUENT EVENTS




On February 8, 2017, Momentous Entertainment Group, Inc. (MMEG) filed a Current Report on Form 8-K to report that MMEG executed a Share Exchange Agreement with the shareholders of VZ Network Holdings, Inc., a Delaware company (the “Selling Company” or “VZ”), purchasing all of the issued and outstanding shares of VZ for newly-issued preferred stock of MMEG, with VZ becoming a wholly-owned subsidiary of MMEG. VZ owns 100% of the equity of Poolworks (Germany) Ltd.









9