EDGAR 10-K Filing

Company CIK: 1635748
Filing Year: 2021
Filename: 1635748_10-K_2021_0001079973-21-000972.json

---

ITEM 1. BUSINESS
ITEM 1. BUSINESS
Overview of Our Business
Recent Developments
UVIC, Inc., was incorporated in Nevada on August 21, 2013.
On May 8, 2015, UVIC, Inc., filed a registration statement with the Securities and Exchange Commission Form S-1 to register 7,000,000 shares of our common stock at a per share price of $0.01 on behalf of selling shareholders. The SEC file number of the registration statement is 333-203997. The Form S-1 was declared effective by the SEC on August 7, 2015.
Prior to the transaction described below, UVIC., Inc., had limited operating and development activities.
Effective August 22, 2016, the Company entered into an Agreement for the Exchange of Stock (the "Agreement") with Zoompass, Inc., an Ontario, Canada corporation ("Zoompass") that was incorporated under the laws of Ontario on June 8, 2016. Pursuant to the Agreement, the Company agreed to issue 8,050,784 shares of its restricted common stock to Zoompass' shareholders ("Zoompass' shareholders") in exchange for all the shares of Zoompass Inc. owned by the Zoompass Inc.'s Shareholders. At the Closing Date, Rob Lee, a significant shareholder of the Company agreed to cancel 7,000,000 shares of the Company's common stock, which shares constituted the control shares of the Company. Other than this one significant shareholder, shareholders of the Company held 2,670,000 shares. As a result of the Agreement, Zoompass is now a wholly owned subsidiary of the Company. The Company has amended its Articles of Incorporation to change its name to Zoompass Holdings, Inc. and the appropriate forms were filed with FINRA and the SEC to change its name, address and symbol and complete a 3.5-1 forward split, which was consented to by the majority of shareholders on September 7, 2016 and approved in February 2017, for shareholders of record on September 7, 2016.
All share figures have been retroactively stated to reflect the stock split approved by shareholders, unless otherwise indicated. Additionally, the Company's shareholders consented to an increase of the shares authorized to 500,000,000 and a revision of the par value to $0.0001.
As the former Zoompass shareholders ended up owning the majority of the Company, the transaction does not constitute a business combination and was deemed to be a recapitalization of the Company with Zoompass being the accounting acquirer, accordingly the accounting and disclosure information is that of Zoompass going forward.
Effective March 6, 2018 (the "Closing Date"), Zoompass Holdings, Inc.'s (the "Company") Canadian operating subsidiary, Zoompass, Inc., entered into an Asset Purchase Agreement (the "Agreement") for the sale of its Prepaid Card Business ("Prepaid Business") to Fintech Holdings North America Inc., or its designee. The aggregate purchase price of the Prepaid Business was C$400,000. The transaction was completed on March 26, 2018.
During the first quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.
On October 16, 2018, the Company reached an Asset Purchase Agreement and purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.
Zoompass Inc., was incorporated under the laws of Ontario on June 8, 2016. On October 17, 2018, pursuant to an asset purchase agreement with Virtublock, certain net assets were acquired by the Company in exchange for shares of the Company. The net assets primarily consisted of certain technology IP related to cryptocurrency exchange/wallet, certain strategic partnerships and customer contracts. On March 25, 2019, the name of the company was changed from Zoompass Inc. to Virtublock Canada Inc. (“VCI”).
On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.
On May 31, 2020, the Company closed a Share Exchange Agreement (the "Share Exchange Agreement") by and among the Company, Blockgration Global Corp., an Ontario corporation and its subsidiaries ("BGC"), and the shareholders of BGC (the "BGC Shareholders"). This acquisition gives the Company controlling interest in BGC’s subsidiaries in Canada and India which is engaged in the business of digital wallet deployments, prepaid card platform, blockchain and mobile apps deployment.
On September 30, 2020, the Company cancelled 9,330,000 shares of the common stock and 14,845,000 share purchase warrants which was allocated in connection with acquisition of MSS that was a 70% subsidiary of BGC on May 31, 2020. Refer to note 10 and 14 of the consolidated financial statements.
The Company has incurred recurring losses from operations and as of December 31, 2020 had a net working capital deficiency and an accumulated deficit. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the consolidated financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.
During the three months period ended March 31, 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,614,685 non-registered shares of the Company's common stock was issued for gross proceeds of $298,355.
In August 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 1,200,000 non-registered shares of the Company's common stock was issued for gross proceeds of $96,000.
There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing in the future to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Issuance of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.
Beginning in March 2020, the Governments of Canada and the United States, as well as other foreign governments instituted emergency measures as a result of the COVID-19 virus outbreak. The virus has had a major impact on North America and international securities, currency markets and consumer activity which may impact the Company's financial position, its results of future operations and its future cash flows significantly. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of future operations, financial position, and liquidity in fiscal year 2021.
The Company is actively seeking opportunities to enter into partnership or acquire third parties with existing revenue streams. The company is well positioned to achieve this objective and will continue to pursue such opportunities going forward.
The Company will remain a Fintech company and continue to develop and acquire software platforms and services to sell to customers globally with a focus on leading edge technologies and software as a service.

---

ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Global Economic Conditions
The unprecedented events in global financial markets in the past several years have had a profound impact on the global economy. Many industries have been impacted by these market conditions. Market events and conditions, including volatility in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede the Company's access to capital or increase the cost of capital and may adversely affect the Company's operations. The Company is also exposed to liquidity risks in meeting its operating and capital expenditure requirements in instances where the Company's cash position is unable to be maintained or appropriate financing is unavailable. These factors may impact the Company's ability to obtain capital on terms favourable to it or at all. Increased market volatility may impact the Company's operations which could adversely affect the trading price of the Common Shares.
Operating and Capital Requirements
The Company competes for financing and personnel with other financial technology companies. There can be no assurance that additional capital or other types of financing will be available, when needed, or that, if available, the terms of such financing will be favourable to the Company. The Company may need to make significant expenditures in connection with the development of its platform or other lines of business. There is no assurance that any such funds will be available for operations and the ability of the Company to raise such capital will depend, in part, upon conditions in the capital markets at the time and its historical business performance. If additional capital is raised by the issuance of shares from the treasury of the Company, shareholders may suffer dilution. Future borrowings by the Company or its subsidiaries may increase the level of financial and interest rate risk to the Company as the Company will be required to service future indebtedness. Further, failure to obtain additional financing on a timely basis could cause the Company to reduce, suspend, or terminate its proposed operations.
Dependence on Highly Skilled Personnel
The Company's prospects depend in part on the services of key executives and other highly skilled and experienced personnel focused on managing the Company's interests, in addition to the identification of new opportunities for growth and funding. The loss of these persons or the Company's inability to attract and retain additional highly skilled employees required for the Company's activities may have a material adverse effect on its business or future operations. The Company does not currently maintain "key person" life insurance on any of its key employees.
Negative Operating Cash Flow
The Company has negative operating cash flow and may continue to have negative operating cash flow in future periods. To the extent that the Company has negative operating cash flow, the Company will need to continue to deploy a portion of its cash reserves to fund such negative operating cash flow.
Limited operating history of the Company's new direction; No assurance of profitability; anticipated losses.
The Company has a limited operating history and, accordingly, has a limited operating history on which to base an evaluation of our business. Our business must be considered in light of the risks, expenses and problems frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving markets which involve technology. The in-development operations are subject to all of the risks inherent in the establishment of a new business enterprise. Accordingly, the likelihood of our success must be considered in the light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the starting and expansion of a business and the relatively competitive environment in which we will operate. Unanticipated delays, expenses and other problems such as setbacks in launch and development, product sourcing manufacturing, and market acceptance are frequently encountered in establishing a new business such as the Company`s. There can be no assurance that the Company will be successful in addressing such risks, and any failure to do so could have a material adverse effect on the Company's business, results of operations and financial condition.
Because of the Company`s limited operating history, the Company has limited historical financial data on which to base planned operating expenses. Accordingly, our expense levels, which are, to a large extent, variable, will be based in part on our expectations of future revenues. As a result of the variable nature of many of our expenses, we may be unable to adjust spending in a timely manner to compensate for any unexpected delays in the development and
marketing of our products or any subsequent revenue shortfall. Any such delays or shortfalls will have an immediate adverse impact on our business, operating results and financial condition.
The Company has not achieved profitability to date. To the extent that net revenue does not grow at anticipated rates or that increases in its operating expenses precede or are not subsequently followed by commensurate increases in net revenue, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition will be materially and adversely affected. There can be no assurance that the Company's operating losses will not increase in the future or that the Company will ever achieve or sustain profitability.
Regulatory Risk
Although the Company follows certain laws and regulations and receives the requisite approvals to operate in the lines of business it currently or intends to operate in there is no guarantee that these laws, regulations and approvals will not be challenged or impugned. Further changing regulatory regimes may subject the Company to new laws and regulations. Changes in the regulatory environment the Company operates in can have a material adverse effect on operations.
Demand for our products and services may not develop as expected our projected revenues and profits will be affected.
Future profits are influenced by many factors, including economics, and will be predicated on a stable and/or growing market and the purchase and consumption of our products and services. The Company believes, and our growth expectations assume, that the markets for our suite of products and services will continue to grow, that the Company will increase its penetration of these markets and that our anticipated revenue from selling into this market will continue to increase. If the Company's expectations as to the size of these markets and its ability to sell our products and services in this market are not correct, our revenue may not materialize, and our business will be harmed.
Operating results may fluctuate and may fall below expectations in any fiscal quarter.
Our operating results are difficult to predict and are expected to fluctuate from quarter to quarter due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results or future predictions prepared by the Company as an indication of our future performance. If our revenue or operating results fall in any period, the value of our common stock would likely decline.
Factors that may cause our operating results to fluctuate include:
● our ability to arrange potential financing or generate operating cash flows;
● our ability to acquire products to resell to our customers;
● changes in federal, state and local government;
● availability and costs of labor and equipment;
● the addition of new customers or the loss of existing customers;
● our ability to control costs, including operating expenses;
● changes in the mix of our products and services;
● the length of our sales cycle;
● the productivity and growth of our sales force;
● the timing of opening of new offices or making other significant investments in the growth of our business, as the revenue we hope to generate from those expenses often lags several quarters behind those expenses:
● changes in pricing by us or our competitors;
● costs related to the acquisition and integration of companies or assets;
● general economic trends, including changes in geopolitical events such as war or incidents of terrorism; and
● future accounting pronouncements and changes in accounting policies.
The Company operates in a highly competitive industry and competitors may compete more effectively.
Many of our competitors have longer operating histories and greater resources than us, and could focus their substantial financial resources to develop a competing business model, develop products or services that are more attractive to potential customers than what we offer or convince our potential customers that they should require financing arrangements that would be impractical for smaller companies to offer. Our competitors may also offer
products and services at prices below cost and/or devote significant sales forces to competing with us or attempt to recruit our key personnel by increasing compensation, any of which could improve their competitive positions. Any of these competitive factors could make it more difficult for us to attract and retain customers; cause us to lower our prices in order to compete, and reduce our market share and revenue, any of which could have a material adverse effect on our financial condition and operating results. We can provide no assurance that we will continue to effectively compete against our current competitors or additional companies that may enter our markets.
International operations could expose business to additional risks
The Company expects to generate a portion of sales outside of Canada in the future. Operating internationally is one of our growth strategies, and we expect our revenue and operations outside of North America will expand in the future. These operations will be subject to a variety of risks that we do not face currently:
• establishing and managing highly experienced foreign suppliers, distributors and relationships and overseeing and ensuring the performance of foreign subcontractors;
• increased travel, infrastructure and legal and compliance costs associated with multiple international locations;
• additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment;
• imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those which the Company currently operates in;
• increased exposure to foreign currency exchange rate risk;
• longer payment cycles for sales in some foreign countries and potential difficulties in enforcing contracts and collecting accounts receivable;
• difficulties in repatriating overseas earnings;
• general economic conditions in the countries in which we operate; and
• political unrest, war, incidents of terrorism or responses to such events.
Our overall success in international markets will depend, in part, on our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not be successful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we do business. Our failure to manage these risks successfully could harm our international operations, reduce our international sales and increase our costs, thus adversely affecting our business, financial condition and operating results.
The Company relies on outside consultants, service providers and suppliers
We will rely on the experience of consultants, service providers and suppliers. In the event that one or more of these consultants or terminates its relationship with the Company, or becomes unavailable, suitable replacements will need to be obtained and there is no assurance that such consultants, service providers and suppliers could be obtained under conditions favorable to us.
We rely on strategic relationships to promote our products
The Company relies on strategic partnerships with outside companies and individuals to promote and supply certain of our products and services, thus making the future success of our business particularly contingent on the efforts of other parties. An important part of our strategy is to promote acceptance of our products through with certain service providers who we feel could assist us with our promotion strategies. Our dependence raises potential risks with respect to the future success of our business. Our success is dependent on the successful completion and commercial deployment of our products and services and on the future commitment of our distributors to our products and technology.
Reliance on our suppliers
The Company relies vendors and suppliers to provide power, as well as high quality products and services on a consistent basis. The future success of the Company is contingent on the efforts and performance of these suppliers. The Company may have difficulty in locating or using alternative resources should supply problems arise with the current suppliers. An interruption or reduction in the source of supply of or an unanticipated increase in vendor prices, could materially affect our operating results and damage customer relationships as well as our business.
Future growth could strain resources, and if the Company is unable to manage growth, it may not be able to successfully implement our business plan.
The Company hopes to experience rapid growth in operations, which will place a significant strain on our management, administrative, operational and financial infrastructure. Our future success will depend in part upon the ability of our executive officers to manage growth effectively. This will require that we hire and train additional personnel to manage our expanding operations. In addition, we must continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we may be unable to execute upon our business plan.
Failure to protect intellectual property, our planned business could be adversely affected.
Despite efforts to protect and ensure the Company has proprietary rights, parties may attempt to copy aspects of our products, obtain, claim and use information that we regard as proprietary. Unauthorized use of our proprietary technology could harm our business. Litigation to protect our intellectual property rights can be costly and time-consuming to prosecute, and there can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action.
Unforeseen Liabilities from Past Acquisitions
There may be liabilities and claims that the Company has failed to discover or has underestimated in connection with previous acquisitions. In addition, there may be expenditure requirements that the Company has failed to discover or underestimated in connection with these acquisitions, which amounts may be material. Any such liabilities or expenditure requirements could have a material adverse effect on the Company's business, financial condition or future prospects.
Conflicts of Interest
Certain of the directors and officers of the Corporation also serve as directors and/or officers of other companies there exists the possibility for such directors and officers to be in a position of conflict. Any decision made by any of such directors and officers will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its shareholders. In addition, each director is required to declare and refrain from voting on any matter in which such director may have a conflict of interest.
If we issue additional shares in the future, it will result in the dilution of our existing stockholders.
Our articles of incorporation authorize the issuance of up to 500,000,000 shares of our common stock, with a par value of $0.0001 per share. Our board of directors may choose to issue some or all of such shares to acquire one or more companies or products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change of control of our company.
Trading of our stock is restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our common stock.
The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority ("FINRA") has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our stock.
The price of our common stock may be negatively impacted by factors that are unrelated to our operations.
Although our common stock is currently listed for quotation on the OTC Markets and a market is established and trading has begun, trading through the OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will continue in our stock, in which case it could be difficult for stockholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.
We do not intend to pay dividends on any investment in the shares of stock of our company.
We have never paid any cash dividends, and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price. This may never happen, and investors may lose all of their investment in our company.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

---

ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
We maintain our head office at 2075 Kennedy Rd, Suite 404, Toronto, ON M1T 3V3, Canada.

---

ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business.
During the year ended December 31, 2017, the Company learned that a class action complaint (the “Class Action Complaint”) had been filed against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the District of New Jersey. The Class Action Complaint alleges, inter alia, that defendants violated the federal securities laws by, among other things, failing to disclose that the Company was engaged in an unlawful scheme to promote its stock. The Company has been served with the Class Action Complaint. The Company has analyzed the Class Action Complaint and, based on that analysis, has concluded that it is legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.
On August 7, 2018, the United States District Court for the District of New Jersey dismissed the Class Action Complaint. Additionally, subsequent to the year end on August 21, 2018, the Company was served with the Second Amended Complaint in the District of New Jersey. The Company filed a motion to dismiss the Second Amended Complaint on September 18, 2018. On January 23, 2019, the United States District Court for the District of New Jersey dismissed the Second Amended Complaint with prejudice. Plaintiff filed a motion for reconsideration of the dismissal order on February 7, 2019. On May 14, 2019, the Plaintiff’s motion to reconsider was denied. On June 10, 2019, the plaintiffs filed an appeal with United States Court of Appeals for the Third Circuit. As of May 27, 2020, the Class Action Complaints, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.
Also during the year ended December 31, 2017, the Company learned that two derivative complaints (the “Derivative Complaints”) on behalf of the Company have been filed against the Company’s Directors and Chief Executive Officer, President, Corporate Secretary, and Chief Financial Officer, and nominally against the Company, in Nevada state and federal court. The state court action subsequently was removed to federal court. The Derivative Complaints allege, inter alia, that the Company’s officers and directors directed the Company to undertake an unlawful scheme to promote its stock. The Company has been served with the Derivative Complaints. The Company has analyzed them and, based on its analysis, has concluded that the Derivative Complaints are legally deficient and otherwise without merit. As of May 27, 2020, the Derivative Complaints, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.
The Company was also served with a third derivative action, which was filed March 23, 2018, against the Company’s Directors and Chief Executive Officer, President, and Corporate Secretary, and nominally against the Company, in Nevada state court. Subsequently, this case was removed to federal court. As of May 27, 2020, the Derivative Complaint, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.

---

ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market for Our Common Stock
Since November 2016, our common stock has been quoted on the OTCQB, which is part of the OTC Market Group's quotation system. We were initially traded under the symbol "UVVC" but beginning in January 2017, our stock began trading under the symbol "ZPAS".
The following table sets forth, for the periods indicated, the high and low closing prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Closing Prices (1)
High Low
FISCAL YEAR ENDED DECEMBER 31, 2020:
Fourth Quarter $ 0.28 0.17
Third Quarter 0.36 0.246
Second Quarter 0.39 0.123
First Quarter 0.21 0.052
FISCAL YEAR ENDED DECEMBER 31, 2019:
Fourth Quarter $ 0.13 0.054
Third Quarter 0.15 0.058
Second Quarter 0.13 0.05
First Quarter 0.205 0.10
_________________
(1) The above tables set forth the range of high and low closing prices per share of our common stock as per the OTC Markets.
Approximate Number of Holders of Our Common Stock
As of September 24, 2021, the Company had 155 active stockholders of record and 110,976,094 shares of common stock were issued and outstanding. Because some of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Our registrar and transfer agent for our common stock is VStock Transfer. Their address is 18 Lafayette Place, Woodmere, NY 11598 and their telephone number and facsimile are +1 (646) 536-3179 and +1 (212) 828-8436, respectively.
Dividend Policy
The Company has not declared any dividends since incorporation and does not anticipate doing so in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
Our board of directors has discretion on whether to pay dividends unless the distribution would render us unable to repay our debts as they become due. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
See Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, "Securities Authorized for Issuance Under Equity Compensation Plans".
Recent Sales of Unregistered Securities
Recent Sales of Unregistered Securities
During January 2018, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 200,000 non-registered shares of the Company's common stock was issued for proceeds of $40,671.
During April 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 687,500 non-registered shares of the Company's common stock was issued for proceeds of $39,672.
On April 11, 2018, the company issued 1,500,000 shares of the common stock to a corporation controlled by an officer of the company as compensation for services rendered, and on April 14, 2018, the company issued 1,000,000 shares of the common stock to a current officer of the company who at that time was an arm’s length consultant, as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.
On September 10, 2018, the Company issued 8,370,000 shares of the common stock to various arm’s length third parties upon settlement of promissory notes.
On October 17, 2018, the Company issued 44,911,724 shares of the common stock in respect of the assets purchase from Virtublock Global Corp.
During the months of November and December 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 5,450,000 non-registered shares of the Company's common stock was issued for proceeds of $399,483.
On January 20, 2019, the company issued 1,000,000 shares of the common stock to a consultant as compensation for services rendered, and on April 20, 2019, the company issued 500,000 shares of the common stock to a consultant as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.
In May 2019, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 1,038,461 non-registered shares of the Company's common stock was issued for proceeds of C$135,000.
In July 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 500,000 non-registered shares of the Company's common stock was issued for proceeds of C$55,000.
In August 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 500,000 non-registered shares of the Company's common stock was issued for proceeds of $50,000.
In December 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 757,575 non-registered shares of the Company's common stock was issued for proceeds of $39,041.
In January 2020, the Company issued 757,575 non-registered shares of the Company's common stock. The net proceeds in amount of $34,091 was received in December 31, 2019.
In January 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,030,300 non-registered shares of the Company's common stock was issued for gross proceeds of $151,515.
In January 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.
In March 2020, the company issued 1,160,000 shares of the common stock to as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.
In March 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 300,000 non-registered shares of the Company's common stock will be issued for gross proceeds of $15,000.
In April 2020, the Company issued 2,000,000 shares of the common stock to as compensation for services. The fair value of these shares, in amount of $250,000, was determined by using the market price of the common stock as at the date of issuance.
In June 2020, the Company issued total of 551,394 non-registered shares of common stock for net proceeds in the amount of $137,002.
In August 2020, the Company issued total of 400,000 non-registered shares of common stock for net proceeds in the amount of $100,000.
In August 2020, the Company issued 2,000,000 shares of the common stock to as compensation for services rendered. The fair value of these shares, in the amount of $644,000, was determined by using the market price of the common stock as at the date of issuance.
In September 2020, the Company issued 4,000,000 shares of the common stock in respect of the assets purchase from Moxie Holdings Private Ltd.
In September 2020, the Company issued 20,656,715 shares of the common stock upon closing the share exchange agreement with Blockgration Global Corp. and its subsidiaries.
In October 2020, the Company issued 1,000,000 shares of common stock to as compensation for services. The fair value of these shares in the amount of $202,000 was determined by using the market price of the common stock as at the date of issuance.
Purchases of Our Equity Securities
No repurchases of our common stock were made during our fiscal year ended December 31, 2020.

---

ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. Selected financial data
Smaller reporting companies are not required to provide the information required by this item.

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. Management's Discussion and Analysis of financial Condition and Results of Operations
The following management's discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto and the other financial information appearing elsewhere in this annual report. In addition to historical information, the following discussion contains certain forward-looking information. See "Special Note Regarding Forward-Looking Statements" above for certain information concerning those forward looking statements. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP. References in this Report to a particular "fiscal" year are to our fiscal year ended on December 31.
Nature of Operations
Zoompass Holdings, Inc. formerly known as UVIC. Inc. ("Zoompass Holdings" or the "Company") was incorporated under the laws of the State of Nevada on August 21, 2013. Effective August 22, 2016, the Company entered into an Agreement for the Exchange of Stock (the "Agreement") with Zoompass, Inc., an Ontario, Canada corporation ("Zoompass"). Pursuant to the Agreement, the Company agreed to issue 8,050,784 shares of its restricted common stock to Zoompass' shareholders ("Zoompass' shareholders") in exchange for all the shares of Zoompass Inc. owned by the Zoompass Inc.'s Shareholders. At the Closing Date, Rob Lee, a significant shareholder of the Company agreed to cancel 7,000,000 shares of the Company's common stock, which shares constituted the control shares of the Company. Other than this one significant shareholder, shareholders of the Company held 2,670,000 shares. As a result of the Agreement, Zoompass is now a wholly owned subsidiary of the Company. The Company has amended its Articles of Incorporation to change its name to Zoompass Holdings, Inc. and the appropriate forms were filed with FINRA and the SEC to change its name, address and symbol and complete a 3.5-1 forward split, which was consented to by the majority of shareholders on September 7, 2016 and approved in February 2017, for shareholders of record on September 7, 2016.
All share figures have been retroactively stated to reflect the stock split approved by shareholders, unless otherwise indicated. Additionally, the Company's shareholders consented to an increase of the shares authorized to 500,000,000 and a revision of the par value to $0.0001.
As the former Zoompass shareholders ended up owning the majority of the Company, the transaction does not constitute a business combination and was deemed to be a recapitalization of the Company with Zoompass being the accounting acquirer, accordingly the accounting and disclosure information is that of Zoompass going forward.
Effective March 6, 2018 (the "Closing Date"), Zoompass Holdings, Inc.'s (the "Company") Canadian operating subsidiary, Zoompass, Inc., entered into an Asset Purchase Agreement (the "Agreement") for the sale of its Prepaid Card Business ("Prepaid Business") to Fintech Holdings North America Inc., or its designee. The aggregate purchase price of the Prepaid Business was C$400,000. The transaction was completed on March 26, 2018.
During the first fiscal quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first fiscal quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.
On October 17, 2018, the Company reached an Asset Purchase Agreement and purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.
Zoompass Inc., was incorporated under the laws of Ontario on June 8, 2016. On October 17, 2018, pursuant to an asset purchase agreement with Virtublock, certain net assets were acquired by the Company in exchange for shares of the Company. The net assets primarily consisted of certain technology IP related to cryptocurrency exchange/wallet, certain strategic partnerships and customer contracts. On March 25, 2019, the name of the company was changed from Zoompass Inc. to Virtublock Canada Inc. (“VCI”).
On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.
On May 31, 2020, the Company closed a Share Exchange Agreement (the "Share Exchange Agreement") by and among the Company, Blockgration Global Corp., an Ontario corporation and its subsidiaries ("BGC"), and the shareholders of BGC (the "BGC Shareholders"). This acquisition gives the Company controlling interest in BGC’s subsidiaries in Canada and India which is engaged in the business of digital wallet deployments, prepaid card platform, blockchain and mobile apps deployment.
On September 30, 2020, the Company cancelled 9,330,000 shares of the common stock and 14,845,000 share purchase warrants which was allocated in connection with acquisition of MSS that was a 70% subsidiary of BGC on May 31, 2020. Refer to note 10 and 14 of the consolidated financial statements.
The Company is actively seeking opportunities to enter into partnership or acquire third parties with existing revenue streams. The company is well positioned to achieve this objective and will continue to pursue such opportunities going forward.
The Company will remain a Fintech company and continue to develop and acquire software platforms and services to sell to customers globally with a focus on leading edge technologies and software as a service.
The Company has incurred recurring losses from operations and as of December 31, 2020 had a net working capital deficiency and an accumulated deficit. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the consolidated financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.
During the three months period ended March 31, 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,614,685 non-registered shares of the Company's common stock was issued for gross proceeds of $298,355.
In August 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 1,200,000 non-registered shares of the Company's common stock was issued for gross proceeds of $96,000.
There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing in the future to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Sales of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.
The Company expects the forgoing, or a combination thereof, to meet the Company's anticipated cash requirements for the next 12 months; however, these conditions raise substantial doubt about the Company's ability to continue as a going concern.
These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business as they come due. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated statement of balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
For the year ended December 31, 2020, the Company incurred a net loss of $19,214,889 (2019 - $ 615,256).
The Company may incur additional operating losses for the 2021 fiscal year.
Beginning in March 2020, the Governments of Canada and the United States, as well as other foreign governments instituted emergency measures as a result of the COVID-19 virus outbreak. The virus has had a major impact on North America and international securities, currency markets and consumer activity which may impact the Company's financial position, its results of future operations and its future cash flows significantly. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of future operations, financial position, and liquidity in fiscal year 2021.
Results of operations for the years ended December 31, 2020 and December 31, 2019
Revenue and cost of sales
During the year ended December 31, 2019, the Company has not generated revenue and incurred no cost of sales.
During the year ended December 31, 2020, the Company generated revenue of $872,465 and cost of sales of $665,881. On May 31, 2020, the Company completed acquisition of Blockgration Global Corp. (“BGC”) and its subsidiaries that was engaged in the business of digital wallet deployments, prepaid card platform, blockchain and mobile apps deployment. The total revenues and cost of sales also included revenue of $148,701 and cost of sales of $45,539 from Msewa Software Solutions (“MSS”) that was a 70% subsidiary of BGC and the agreement with MSS was terminated as of September 30, 2020.
General and administrative and other expenses
For the year ended December 31, 2020, the Company incurred $696,650 in salaries and consultant costs. For the year ended December 31, 2019, the Company incurred $266,433 in salaries and consultant costs. The increase was due to the increase of the Company’s headcount during the year 2020 as a result of the acquisition of BGC and its subsidiaries.
Share-based payment expense was $1,549,762 for the year ended December 31, 2020, compared with $227,000 for the year ended December 31, 2019. The increase was due to increased level of activity in 2020 and issuance of stock options and shares as compensation when compared with December 2019.
Insurance expense was $111,754 for the year ended December 31, 2020, compared with $NIL for the year ended December 31, 2019 due to premium on the directors and officers’ insurance policy.
	
Depreciation and amortization expenses from the tangible and intangible assets acquired from BGC and its subsidiaries was $437,128 for the year ended December 31, 2020 compared with $NIL for the year ended December 31, 2019.
For the year ended December 31, 2020 the Company incurred $200,637 in professional fees compared with $168,429 due to a reduction in legal costs during 2020.
Filing fees and regulatory costs were $43,877 for the year ended December 31, 2020 compared with $4,892 year ended December 31, 2019.
Bad debt expenses for the year ended December 31, 2020 was $330,886 from uncollectable receivables compared to $NIL for the year ended December 31, 2019.
Net Interest and bank charges for the year ended December 31, 2020 were $126,783 compared with $1,323 for the year ended December 31, 2019 as a result of interest accretion of $113,067 on long-term debt payable for the purchase of IP Technology asset in 2020.
For the year ended December 31, 2020, the Company incurred a net loss of $2,971,119 from operations compared with a net loss of $615,256 for 2019.
For year ended December 31, 2020, the impairment provision related to goodwill and intangible assets from the acquisition of BGC and its subsidiaries was $13,030,124 and $6,551,870 respectively compared to $NIL for the year ended December 31, 2019. The Company believes that the intangible assets have value and will be able to generate revenues, however due to the current economic downturn, management has taken a conservative approach to impair goodwill and intangible assets.
For the year ended December 31, 2020, the change in fair value of contingent consideration payable on acquisition of BGC and its subsidiaries was $387,356 and a gain of $3,574,368 was recognized on settlement of contingent consideration.
The loss per share from operations is 0.2073 and 0.006 for year ended December 31, 2020 and 2019 respectively.
Liquidity and Capital Resources
As at December 31, 2020, the Company had $64,412 in cash and cash equivalents compared with $21,477 as at December 31, 2019.
Operations for the year ended December 31, 2020 were primarily financed through the issuance of shares in the common stock of the Company and advances from related party corporations. Operations for the year ended December 2019 were primarily financed through the issuance of shares in the common stock of the Company, and the issuance of promissory notes.
There is no certainty that we will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable us to meet our obligations as they come due and consequently continue as a going concern. The Company may require additional funds to further develop our expanded business plan. The Company may require additional financing this year to fund our operations and is examining possible sources of funding beyond the existing cash generated from operations. Sales of additional equity securities would result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required. In the event that the necessary additional financing is not obtained, the Company would reduce its discretionary overhead costs substantially, or otherwise curtail operations.
Net Cash Used in Operating Activities
During the years ended December 31, 2020 and 2019, $545,580 and $538,609 in cash, respectively, was used for operations.
Net Cash Used in Investing Activities
During the year ended December 31, 2019, the Company generated $nil from investing activities compared with cash used in investing activities of $114,153 for year ended December 31, 2020.
Net Cash Provided by Financing Activities
For the year ended December 31, 2020 the Company raised $883,715 from financing activities that included $388,586 from the issuance of shares of its common stock, proceeds from note payable and debt of $365,068 and $75,600 respectively.
For the year ended December 31, 2019 the Company raised $264,337 from the issuances of shares of its common stock and received advances in amount of $286,188 from related party corporations.
Commitments
There were no commitments as of December 31, 2020 and December 31, 2019.
Financial instruments and risk factors
The Company has exposure to liquidity risk and foreign currency risk. The Company's risk management objective is to preserve and redeploy the existing treasury as appropriate, ultimately to protect shareholder value. Risk management strategies, as discussed below, are designed and implemented to ensure the Company's risks and the related exposure are consistent with the business objectives and risk tolerance.
Liquidity Risk: Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring that there is sufficient capital to meet short and long-term business requirements, after taking into account cash requirements from operations and the Company's holdings of cash and cash equivalents. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances.
Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements may be met through a combination of credit and access to capital markets. The Company's cash requirements are dependent on the level of operating activity, a large portion of which is discretionary. Should management decide to increase its operating activity, more funds than what is currently in place would be required. It is not possible to predict whether financing efforts will be successful or sufficient in the future. At December 31, 2020, the Company had $64,412 in cash and cash equivalents (December 31, 2019 - $21,477).
The following are the maturities, excluding interest payments, reflecting undiscounted future cash disbursements of the Company's financial liabilities based on the period year ended December 31, 2020.
Accounts payable and accrued liabilities
$ 1,843,780
$ -
Notes payable
530,896
Due to related party corporations
65,020
Long-term debt
353,498
762,147
$ 2,793,194
$ 762,147
Currency risk: The Company's expenditures are incurred in Canadian and US dollars. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.
Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2020, the Company's credit risk is primarily attributable to cash and cash equivalents, and accounts receivable. At December 31, 2020, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2020, the Company had an allowance for doubtful accounts of $NIL (December 31, 2019 - $NIL) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.
Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk as the promissory note have been settled during the year.
Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate fair value because of the short period of time between the origination of such instruments and their expected realization.
Related Party Transactions
The balances of due to related party corporations on December 31, 2020 represent advances and payment from related party corporations which is non-interest bearing, unsecured and due on demand. The amount of $100,201 that is recorded as due to related parties as of December 31, 2019 are eliminated upon consolidation of these related parties in year 2020, pursuant to the acquisition transaction in 2020, became inter-company.
The due to related parties on December 31, 2020 of $65,020 (December 31, 2019 - $100,201) is comprised of $53,882 (December 31, 2019 $Nil) representing amount due to the company under significant influence of a shareholder of the Company. It also includes an amount of $11,138 (December 31, 2019 - $Nil) paid to a shareholder of the Company. These amounts were made to provide working capital and are due on demand and have no set repayment terms.
The total amount owing to the former directors and officers of the Company and corporations controlled by the former directors and officers, in relation to the services they provided to the Company in their capacity as Officers and service provider on December 31, 2020 was $54,436 (December 31, 2019 - $319,969) which includes expense reimbursements. This amount is reflected in accounts payable and is further described below.
a) As of December 31, 2020, the Company had an amount owing to an entity owned and controlled by the former Chief Executive Officer of the Company of $Nil (December 31, 2019 - $265,533). The amount owing relates to services provided by the former Chief Executive Officer and expense reimbursements. During the six months period ended June 30, 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company. The fair value of these shares, in amount of 232,342, was determined by using the market price of the common stock as at the date of issuance. The Company recognized a Gain on settlement of debt in amount of $33,191 in statement of operations. (Note 10).
b) As of December 31, 2020, the Company had an amount owing to an entity owned and controlled by the former Secretary of the Company of $54,436 (December 31, 2019 - $54,436). The amount owing relates to services provided by the then Secretary and expense reimbursements.
During the year ended December 31, 2020, $982,176 (Issuance of shares for service - $838,400, stock options expenses - $143,776) was recognized for share-based payment expense to directors and officers of the Company. No expense for share based payments to directors and officers was recognized during the year ended December 31, 2019.
As of December 31, 2020, the Company had an amount owing to the Chief Executive Officer for $78,540 (December 31, 2019 - $Nil), included in Accounts payable and accrued liabilities. The amount owing relates to services provided and is recorded as consulting expenses.
As of December 31, 2020, the Company had an amount owing to the Chief Financial Officer for $30,909 (December 31, 2019 - $Nil), included in Accounts payable and accrued liabilities. The amount owing relates to services provided and is recorded as consulting expenses.
Subsequent events
During the three months period ended March 31, 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,614,685 non-registered shares of the Company's common stock was issued for gross proceeds of $298,355.
In March 2021, the Company announced that its subsidiary, BGC, signed a strategic partnership agreement to provide Business-to Business (B2B) solutions. Under the terms of the agreement the Company will receive a one-time customization and implementation fee of US$350,000.
In August 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 1,200,000 non-registered shares of the Company's common stock was issued for gross proceeds of $96,000.
The payment of all the Notes payable amounts disclosed in the consolidated financial statements as of December 31, 2020 has been extended based on the same terms. Subsequent to December 31, 2020, the Company’s received an additional CD$30,000 from a shareholder for payment of operating expenses. The loan does not bear any interest and is unsecured.
Subsequent to December 31, 2020, the Company received CD$300,000 from a Convertible Debenture offering of 1,000 units. Each unit is comprised of one (1) debenture in the principal amount of CD$1,000 per unit with a term of three (3) years from the date of issuance and bearing interest at the rate of 12% per annum. The whole or any part of the principal amount of the Debenture plus any accrued and unpaid interest may be convertible at the option of the debenture holder into common shares of the Company at a price equal to US$0.20 per share at any time up to the maturity date. The right of conversion in the Debenture may be accelerated by the Company if the closing price of the Company’s common shares exceeds 200% of the Conversion price for a period of 20 trading days in a 30 day period at any time up to the maturity date as more specifically set out in the Debenture agreement.
Subsequent to the year ended December 31, 2020, the Company repaid a long-term debt due to Moxies, an amount of $353,498
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.
Critical Accounting Policies
Basis of presentation
The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to present a fair statement of the results for the year.
Translation of foreign currencies
The functional currency of the Company, PM and ZTI is the US dollar. The Company has determined that the functional currency of ZM, BGC and ZMG is the Canadian dollar. (references to which are denoted "C$"), for BSP and MSS is the Indian Rupees and for VO is the Euro. The reporting currency of the Company is US Dollar.
Transactions in currencies other than the functional currency are recorded at the rates of the exchange prevailing on dates of transactions. At each balance sheet reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at each reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the historical date of the transaction. The impact from the translation of foreign currency denominated items are reflected in the statement of operations and comprehensive loss.
Translation of functional currencies to reporting currencies for assets and liabilities is done using the exchange rates at each balance sheet date; revenue and expenses are translated at average rates prevailing during the reporting period or at the date of the transaction; shareholders' equity is translated at historical rates. Adjustments resulting from translating the consolidated financial statements into the US Dollar are recorded as a separate component of accumulated other comprehensive income in the statement of changes in stockholders’ deficiency.
Revenue recognition
The Company's revenue recognition policy follows ASC 606, Revenue from Contracts with Customers, which provides guidance on the recognition, presentation and disclosure of revenue from contracts with customers in consolidated financial statements.
Revenue is measured based on the consideration specified in a contract with a customer. Once the Company determines a contract's performance obligations and the transaction price, including an estimate of any variable consideration, the Company allocates the transaction price to each performance obligation in the contract using a stand-alone selling price. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a customer. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.
Nature of performance obligations
At contract inception, the Company assesses the services promised in the contract with a customer and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all the services promised in the contract regardless of whether they are explicitly stated or implied.
The following is a description of the Company's principal revenue generating activities.
Revenue is principally derived from time basis billing for IT professional services provided to customers. Professional services in these contracts are primarily considered a single performance obligation. Revenue for these contracts is recognized over time for the amount which the Company has right to consideration. The Company also derived revenue from enabling various payment transactions which is recognized on a fixed fees per transaction basis at a point in time as services are rendered. Deferred revenue is recognized for transactions arising during the current reporting period when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized. Deferred revenue is a liability as of the reporting period related to revenue producing activity for which revenue has not yet been recognized.
Financial instruments
ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, cash in trust and customer deposits, accounts receivables and due from related party corporations, net of any allowances for doubtful accounts, accounts payable and accrued liabilities, promissory note, due to related party corporations, and client funds approximate fair value because of the short period of time between the origination of such instruments and their expected realization. The allowance for doubtful accounts is reflected in "Office and Sundry" expenses on the statement of operations and comprehensive loss. Per ASC Topic 820 framework these are considered Level 2 inputs where inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
The Company's policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the year.
Basic and diluted loss per share
Basic and diluted loss per share has been determined by dividing the net loss available to shareholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. The diluted weighted average number of shares outstanding is calculated as if all dilutive options had been exercised or vested at the later of the beginning of the reporting period or date of grant, using the treasury stock method.
Loss per common share is computed by dividing the net loss by the weighted average number of shares of common shares outstanding during the period. Common share equivalents, options and warrants are excluded from the computation of diluted loss per share when their effect as anti-dilutive.
Segment reporting
ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", establishes standards for the way that public business enterprises report information about operating segments in the Company's consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in, all revenues are currently earned in Canada and the Company’s research, development and strategical planning operations are carried out and served as an integral part of the Company’s business. The Company’s reportable segments and operating segments include rendering of professional services.
Cash and cash equivalents
Cash and cash equivalents include demand deposits held with banks and highly liquid investments with original maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. Cash in trust and customer deposits are amounts held by the Company at various financial institutions for settlement of clients' funds payable.
Property and Equipment
Equipment is stated at historic cost. The Company has the following sub-categories of property and equipment with useful lives and depreciation methods as follows:
• Office equipment and furniture - 20% declining balance per year
The cost of assets sold, retired, or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts. Expenditures for maintenance and repairs are charged to expense as incurred.
The Company follows the ASC Topic 360, which requires that long-lived assets be reviewed annually for impairment whenever events or changes in circumstances indicate that the assets' carrying amounts may not be recoverable.
In performing the review for recoverability, if future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets are less than their carrying values, an impairment loss represented by the difference between its fair value and carrying value, is recognized. When properties are classified as held for sale they are recorded at the lower of the carrying amount or the expected sales price less costs to sell.
Goodwill
Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business combinations. Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the acquisition amount over such fair value being recorded as goodwill and allocated to reporting units ("RU"). RUs are the smallest identifiable group of assets, liabilities and associated goodwill that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Given how the Company is structured and managed, the Company has one RU. Goodwill arises principally because of the following factors among other things: (1) the going concern value of the Company's capacity to sustain and grow revenues through securing additional contracts and customers,; (2) the undeserved market of consumers looking for financial transactional alternatives; (3) technological and mobile capabilities beyond acquired lines of business to capture buyer specific synergies arising upon a transaction and (4) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of the assets acquired and liabilities assumed in a business combination, if any.
Intangibles
The Company has applied the provisions of ASC topic 350 - Intangibles - goodwill and other, in accounting for its intangible assets. Intangible assets subject to amortization are amortized on a straight-line method on the basis over the useful life of the respective intangibles. The following useful lives are used in the calculation of amortization:
Trademark - 8 years
Customer base - 5 years
Intellectual property/Technology - 10 years
Impairment goodwill and indefinite-lived intangible assets and intangible assets with definite lives
The Company accounts for goodwill and intangible assets in accordance with ASC No. 350, Intangibles-Goodwill and Other ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.
The Company assesses the carrying value of goodwill, indefinite-lived intangible assets and intangible assets with definite lives, such as Trademark, Technology platform, customer base and other intangible assets for potential impairment annually as of December 31, or more frequently if events or changes in circumstances indicate such assets might be impaired.
When assessing goodwill for impairment the Company elects to first perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. If we do not perform a qualitative assessment, or if the qualitative assessment indicates it is more likely than not that the fair value of the reporting units, is less than its carrying amount, the Company performs a quantitative test. The Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company estimates fair value using the income approach, to estimate the future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets.
Income taxes
Deferred tax is recognized using the asset and liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, the deferred tax is not recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred taxes determined using tax rates (and laws) that have been enacted by the reporting date and are expected to apply when the related deferred taxation asset is realized, or the deferred taxation liability is settled. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Share-based payment expense
The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of warrants and other share-based awards are valued using the Black-Scholes model with assumptions based on historical experience and future expectations. All issuances of share-based payments have been fully-vested, otherwise the Company recognizes such awards over the vesting period based on expectations of the number of awards expected to vest over that period on a straight-line basis.
Business combinations
A business combination is a transaction or other event in which control over one or more businesses is obtained. A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits. A business consists of inputs and processes applied to those inputs that have the ability to create outputs that provide a return to the Company and its shareholders. A business need not include all of the inputs and processes that were used by the acquiree to produce outputs if the business can be integrated with the inputs and processes of the Company to continue to produce outputs. The Company considers several factors to determine whether the set of activities and assets is a business.
Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase consideration over such fair value being recorded as goodwill and allocated to reporting units (“RUs”). If the fair value of the net assets acquired exceeds the purchase consideration, the difference is recognized immediately as a gain in the consolidated statement of operations. Acquisition related costs are expensed during the period in which they are incurred, except for the cost of debt or equity instruments issued in relation to the acquisition which is included in the carrying amount of the related instrument. Certain fair values may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they are adjusted retrospectively in subsequent periods. However, the measurement period will not exceed one year from the acquisition date. If the assets acquired are not a business, the transaction is accounted for as an asset acquisition.
Leases
On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption.
The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor.
As our current operating lease of office space, at the commencement, has a term of less than 12 months, we elect not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.
Use of estimates
The preparation of the consolidated financial statements in conformity with US GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
The areas where management has made significant judgments include, but are not limited to:
Accounting for acquisitions: The accounting for acquisitions requires judgement to determine if an acquisition meets the definition of a business combination under ASC 805. Further, management is required to use judgement to determine the fair value of the consideration provided and the net assets and liabilities acquired.
Assessment of Impairment: The Company has certain assets for which a determination of an impairment, if any, requires significant judgement to determine if the carrying amount of any assets are impaired. Management uses judgement in determining among other things, whether or not an indicator of impairment has occurred, future cash flows, time horizons, and likelihood of recoverability. The assets where management has assessed the recoverability the carrying amount includes accounts receivable, equipment, intangibles and goodwill.
Deferred taxes: The Company recognizes the deferred tax benefit related to deferred income tax assets to the extent recovery is probable. Assessing the recoverability of deferred income tax assets requires management to make significant estimates of future taxable profit and the income tax rate at which the future tax assets will be realized. To the extent that future cash flows, taxable profit and income tax rates differ significantly from estimates, the ability of the Company to realize deferred tax assets could be impacted. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods from deferred income tax assets.
Share-based payment expense: The calculation of share-based payment expense requires management to use significant judgment in determining the fair value of share-based payment expense. Additionally, the management is required to make certain assumptions in arriving at the fair value of share-based payment expense.
Derivative financial instruments: The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.
The Company reviews the terms of equity instruments and other financing arrangements, if any, to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.
Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received an immediate charge to income is recognized in order to initially record the derivative instrument liabilities at their fair value.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.
NEWLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.
In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company adopted this pronouncement and such adoption did not have a material impact on our financial position and/or results of operations.
On January 1, 2018, the Company adopted the accounting pronouncement issued by the Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2014-09 (“ASU”), Revenue from Contracts with Customers (Topic 606) to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted this pronouncement on a modified retrospective and such adoption did not have a material impact on our financial position and/or results of operations.
On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires entities to show changes in the total of cash, cash equivalents and restricted cash in the combined statement of cash flows. This guidance was adopted on a retrospective basis, and such adoption did not have a material impact on combined financial position and/or results of operations.
On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. As our current operating lease of office space, at the commencement, has a term of less than 12 months, we elect not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
The follow discussion about our market risk disclosures involves forward-looking statements. Actual results could differ from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments for speculative or trading purposes.
Financial instruments and risk factors
Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements may be met through a combination of credit and access to capital markets. The Company's cash requirements are dependent on the level of operating activity, a large portion of which is discretionary. Should management decide to increase its operating activity, more funds than what is currently in place would be required. It is not possible to predict whether financing efforts will be successful or sufficient in the future. At December 31, 2020, the Company had $64,412 in cash and cash equivalents (December 31, 2019 - $21,477).
The following are the maturities, excluding interest payments, reflecting undiscounted future cash disbursements of the Company's financial liabilities based on the period year ended December 31, 2020.
2022 and after
Accounts payable and accrued liabilities $ 1,843,780 $ -
Notes payable 530,896
Due to related party corporations 65,020
Long-term debt 353,498 762,147
$ 2,793,194 $ 762,147
Currency risk: The Company's expenditures are incurred in Canadian and US dollars. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.
Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2020, the Company's credit risk is primarily attributable to cash and cash equivalents, and accounts receivable. At December 31, 2020, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2020, the Company had an allowance for doubtful accounts of $NIL (December 31, 2019 - $NIL) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.
Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk as the promissory note have been settled during the year.
Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8 Financial Statements and Supplementary Data
Consolidated Financial Statements
The financial statements required by this item begin on page hereof.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9 Changes in and Disagreements with Accountants and Accounting and Financial Disclosure
On November 10, 2016, our board of directors approved the engagement of MNP, LLP ("MNP"), as the Company's new independent registered public accounting firm.
On June 19, 2019, our board of directors approved the engagement of SRCO Professional Corporation ("SRCO"), as the Company's new independent registered public accounting firm.
During the fiscal years ended December 31, 2014 and 2015, and the subsequent interim period prior to the engagement of MNP, the Company has not consulted MNP regarding (i) the application of accounting principles to any specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company's financial statements, and either a written report was provided to the registrant or oral advice was provided that the new accountant concluded was an important factor considered by the registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(o)(1)(iv)) or a reportable event (as defined in Item 304(a)(1)(v)).

---

ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports it files or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports it files or submitted under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, as well as internal control over financial reporting, may not prevent or detect all inaccurate statements or omissions.
Our management, with the supervision and participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2020, were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 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 management 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.
Inherent Limitations Over Internal Controls
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles ("GAAP"). Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on the Company's assessment, management has concluded that its internal control over financial reporting was ineffective as of December 31, 2020, to provide e reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
We have assessed the effectiveness of our internal control over financial reporting as of December 31, 2020, the period covered by this Annual Report on Form 10-K, as discussed above. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based upon this evaluation, our chief executive officer and chief financial officer concluded that our internal control over financial reporting as of the end of December 31, 2020, were ineffective due to the following: lack of segregation of duties, due to limited administrative and financial personnel and related resources.
Changes In Internal Control Over Financial Reporting
During the year ended December 31, 2020, there were no changes in our internal controls over financial reporting that materially affected, or is reasonably likely to have a materially affect, on our internal control over financial reporting.

---

ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
None.
Where You Can Find More Information
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Our Commission filings are available to the public over the Internet at the Commission's website at http://www.sec.gov. The public may also read and copy any document we file with the Commission at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. We maintain a website at http://www. yappn.com (which website is expressly not incorporated by reference into this filing). Information contained on our website is not part of this report on Form 10-K.
PART III

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10 Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
The following table sets forth the names, ages and positions held with respect to each Director and Executive Officer of the Company as of the date of this Annual Report.
Name Age Position Appointed/Elected
Emanuel (Manny) Bettencourt
Director and Chief Executive Officer March 1, 2020
Steven Roberts
Director November 2019
Mahendra Naik
Director March 1, 2020
Shibu Abraham
Chief Financial Officer June 3, 2020
Bharat Vivek
Chief Operating Officer, Blockchain July 16, 2020
Pankaj Kumar**
Chief Operating Officer, Payment Technologies July 16, 2020
**Mr. Kumar has resigned as Chief Operating Officer of the Company effective July 26, 2021.
The former officers and directors for the period ended December 31, 2020 were as follows:
Name Age Position
Appointed/
Elected
Served till
Roger Charles Connors
Director December 2018 October 2019
Mahmoud Hashem
Director and Chief Executive Officer September 2018 November 2019
Manish Grigo
Director and Chief Financial Officer July 2019 November 2019
Each Director serves until the next annual stockholders meeting and until their respective successors are duly elected and qualified or earlier resignation or removal.
Mr. Bettencourt has been the Chairman & CEO of Sensor Technologies Inc. since December 2019. He has also been the Executive Chairman of W2E technology Corp. since January 2018, and Managing Director of First Principles Group Inc. since May 2002. From January 2018 until November 2018, Mr. Bettencourt was CEO and CO-Founder of Demand Power Group Inc. Mr. Bettencourt is a graduate of the University of Toronto at Mississauga (B.COMM 1995) and holds both a CPA, CA designation.
Mr. Roberts has been the CEO of Epic NRG LLC from 2018 to present. He served as President for Zoompass Inc. from September 2016 through September 2018. From December 2013 through 2016, Mr. Roberts was the Vice President of Mobility for Ingram Micro. Mr. Roberts earned his Bachelors of Arts Degree in 1991 from the University of Guelph, in Guelph, Ontario.
Mr. Naik has been Director of IAMGOLD Corporation, a TSX and NYSE listed company from 1990 to present. Since 2006, Mr. Naik has been Chairman and Director of Fortune Minerals Limited, a TSX listed company. From 2003 to date, Mr. Naik has been a Director of Goldmoney Inc, a TSX listed financial services company specializing in precious metals. From 2012 to 2017, Mr. Naik was a Director of FirstGlobal Data Limited. Mr. Naik earned his Bachelor of Commerce Degree in 1981 from University of Toronto and holds a CPA, CA designation.
Mr. Hashem Founded . in July 2018 and has served as the Chief Executive Officer since inception. Mr. Hashem also founded ZeroWire Group in January 2009 and has served Managing Director since inception. Mr. Hashem graduated from Ain Shams University in July 1996 with a Bachelor of Engineering - Electronics & Communication Department, Cairo, Egypt.
Mr. Grigo has spent over ten years as a Technology Analyst with various boutique investment banking firms in Toronto; where he covered a wide range of technology sectors ranging from Gaming, FinTech and Telcos. Since 2017 he has been working as an independent consultant and advising companies on their capital markets strategies. Mr. Hashem on behalf of the board appointed Mr. Grigo as a Director effective July 25, 2019.
Mr. Connors has been the President and Director of Southern Sky Resources Corp. in Toronto, Canada since 2011. Mr. Connors earned a Bachelor of Business Administration from Acadia University in Wolfville, Canada in 1992. Mr. Connors resigned as Director effective October 15, 2019.
Mr. Abraham has over 20 years of experience in senior management and leadership skills combined with in-depth Canadian and US regulatory and technical accounting knowledge. He was most recently head of Shibu Abraham Professional Corporation and prior to that he was partner at Abraham Chan LLP. He is a Chartered Professional Accountant in Canada, Chartered Accountant in India and Certified Public Accountant is the USA (Illinois).
Mr. Vivek is currently CEO of Blockline Solutions Private Limited and has been in this role since the inception of the company. Prior to that he served in various roles culminating in Engagement Manager with PwC (2012 to 2019). Mr. Vivek is an accomplished business leader and entrepreneur with more than 15 years of experience in the financial services, payment, retail, healthcare, telecom, energy and utilities sector. He also serves as CEO of Moxie Holdings Private Ltd., which manages technology focused companies in various sectors. Mr. Vivek earned his Master of Business Administration from York University, Schulich School of Business in Toronto in 2012.
Mr. Kumar is an experienced and successful business founder with a demonstrated history of working in the financial services and technology industry. Mr. Kumar is the CEO of MSS Payments since June 2014, a company that deploys digital payment platforms for financial institutions, remittance companies and NBFC’s. Mr. Kumar earned his MBA from the James Cook University in Australia in 2008.
Family Relationships
There are no family relationships between any directors or officers of the Company.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
1. had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; except for (i) Mr Bettencourt served as CFO of Distinct Infrastructure Group Inc. between Aug 2015 and December 2017; subsequent to his departure the company was placed into receivership in March 2019 ;
2. been convicted in a criminal proceeding or is a named subject to a pending criminal (excluding traffic violations and other minor offenses);
3. been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or
4. been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission statements of ownership and changes in ownership. The same persons are required to furnish us with copies of all Section 16(a) forms they file. We believe that, during fiscal 2020, all of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities complied with the applicable filing requirements.
In making these statements, we have relied upon examination of the copies of all Section 16(a) forms provided to us and the written representations of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities.
Code of Business Conduct and Ethics
A Code of Business Conduct and Ethics is a written standard designed to deter wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements, (c) compliance with applicable laws, rules and regulations, (d) prompt reporting of violations of the code to an appropriate person and (e) accountability for adherence to the Code. We are not currently subject to any law, rule or regulation requiring that we adopt a Code of Business Conduct and Ethics. However, the Company is in the process of preparing a code of business conduct and ethics policy during 2021.
Committees of Board of Directors
There are currently no committees of the Board of Directors. Our board of directors is of the view that it is appropriate for us not to have a standing nominating, audit or compensation committee because the current size of our board of directors does not facilitate the establishment of a separate committee. Our board of directors has performed, and will perform adequately, the functions of any specific committee.
Board Oversight of Risk
Our Board of Directors recognizes that, although risk management is a primary responsibility of the Company's management, the Board plays a critical role in oversight of risk. The Board, in order to more specifically carry out this responsibility, has assigned certain task focusing on reviewing different areas including strategic, operational, financial and reporting, compensation, compliance, corporate governance and other risks to the relevant Board Committees as summarized above. Each Committee then reports to the full Board ensuring the Board's full involvement in carrying out its responsibility for risk management.

---

ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Persons Covered
As of December 31, 2020, there was the following Named Executive Officers:
Name Position
Emanuel (Manny) Bettencourt
Director and Chief Executive Officer
Shibu Abraham
Chief Financial Officer
Bharat Vivek
Chief Operating Officer, Blockchain
Pankaj Kumar
Chief Operating Officer, Payment Technologies
Compensation Discussion and Analysis
Overview
The Company's executive compensation program is generally designed to align the interests of executives with the interests of shareholders and to reward executives for achieving the Company's objectives. The executive compensation program is also designed to attract and retain the services of qualified executives.
The Board of Directors shall determine all compensation packages.
Executive compensation generally consists of base salary or fees, bonuses and long-term incentive equity compensation such as stock grants or additional options to purchase shares of the Company's common stock as well as various health and welfare benefits. The Board has determined that both the base salary or fees and long-term incentive equity compensation should be the principal component of executive compensation. The Board has not adopted a formal bonus plan, and all bonuses are discretionary.
Elements of Compensation
The executive compensation for the Named Executive Officers) for the period ended December 31, 2019, primarily consisted of base salary or fees, long term incentive equity compensation, and other compensation and benefit programs generally available to other employees,
Base Salary. The Board establishes base salaries or fees for the Company's Named Executive Officers based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies in the Company's peer group for similar positions. Generally, the Board believes that executive base salaries or fees should be in-line with similar responsibilities at comparable companies in line with our compensation philosophy.
Base salaries are reviewed annually, and may be adjusted to realign salaries with market levels after taking into account individual responsibilities, performance and experience.
Bonuses. Bonuses are intended to compensate the Named Executive Officers for achieving the Company's financial performance and other objectives established by the Board each year. The Board currently does not adopt a formal bonus plan and all bonuses are discretionary.
Long-Term Incentive Equity Compensation. The Board believes that stock-based awards promote the long-term growth and profitability of the Company by providing executive officers with incentives to improve shareholder value and contribute to the success of the Company and by enabling the Company to attract, retain and reward the best available persons for executive officer positions. The Named Executive Officers were eligible to receive certain number of shares of common stock of the Company. The Company cannot currently determine the number or type of additional awards that may be granted to eligible participants under the long-term incentive equity compensation plan in the future. Such determination will be made from time to time by the Board.
Change-In-Control and Termination Arrangements. The Company is in the process of formalizing Change-In-Control and Termination Arrangements that would be consistent with all officers of the Company.
Summary Compensation Table
The following table sets forth information concerning all compensation awarded to, earned by or paid during fiscal years 2020 and 2019, to the Named Executive Officers:
Name
Principal
position
Year
Salary
or fees
Bonus
Deferred stock
Units/ shares(8)
Option
awards
Total
Emanuel (Manny)
Bettencourt(1)
Chief Executive Officer $78,540 Nil $636,400 $19,131 $734,071
Nil Nil Nil Nil Nil
Mahmoud Hashem(2) Chief Executive Officer Nil Nil Nil Nil Nil
$19,158 Nil Nil Nil $19,158
Nayeem Saleem Alli(3) Chief Executive Officer Nil Nil Nil Nil Nil
$21,101 Nil Nil Nil $21,101
Steve Roberts(4) Chief Executive Officer $26,460 Nil Nil $55,272 $81,732
$2,412 Nil Nil Nil $2,412
Shibu Abraham(5) Chief Financial Officer $30,909 Nil $202,000 $14,102 $247,011
Nil Nil Nil Nil Nil
Manish Grigo(6) Chief Financial Officer Nil Nil Nil Nil Nil
$2,668 Nil Nil Nil $2,668
(1)
Emanuel (Manny) Bettencourt joined the Company as Director and CEO on March 1, 2020. Under his consulting agreement Mr. Bettencourt was compensated Cdn$10,000 per month plus certain travel related expenses as required by his duties as CEO. As at December 31, 2020, the fees noted above remain unpaid.
(2)
Mahmoud Hashem joined the Company as COO in September 2018 and in December 2018 was appointed as CEO. Under his consulting agreement Mr. Hashem was compensated Cdn$15,000 per month plus certain travel related expenses as required by his duties as President. Mr. Hashem resigned from the Company in November 2019.
(3)
Nayeem Alli became CEO in September 2018 and resigned effective December 12, 2018. Mr. Alli resigned from the Company in December 2018.
(4)
Steve Roberts joined the Company as President in September 2016. Under his employment agreement Mr. Roberts was compensated Cdn$10,000 per month plus certain travel related expenses as required by his duties as President. Effective January 2017, this was increased to Cdn$15,000 per month. In September 2018 Mr. Roberts resigned from the Company. In November 2019, Mr. Roberts was appointed became CEO of the company with compensation of Cdn$10,000 per month. He resigned as CEO on March 1, 2020.
(5)
(6)
Shibu Abraham joined as Chief Financial Officer in May 2020. Under his employment agreement Mr. Abraham was compensated Cdn$5,000 per month. As at December 31, 2020, the fees noted above remain unpaid.
Manish Grigo joined as Chief Financial Officer in September 2018. For 2018, fees were paid to a company owned and controlled by Manish Grigo for the time incurred. Effective January 2019, Mr. Grigo earned a salary of Cdn $7,000 per month. Mr. Grigo resigned from the Company in November 2019.
(7) As required by SEC rules, amounts in the column "Stock Awards" present the aggregate grant date fair value of awards made each year computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification™ 718 Compensation-Stock Compensation ("FASB ASC 718"). The grant date fair value of each of the executives' award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period. The SEC's disclosure rules previously required that we present stock award information based on the amount recognized during the corresponding year for financial statement reporting purposes with respect to these awards. However, the recent changes in the SEC's disclosure rules require that we now present stock award amounts using the grant date fair value of the awards granted during the corresponding year.
Outstanding Equity Awards as of December 31, 2020
Outstanding stock options granted to Named Executive Officers ("NEO's") and Directors as at December 31, 2020 are as follows:
Name
Type of
instrument
No. of securities underlying unexercised instrument available
No. of securities underlying unexercised instrument exercisable
Exercise
price(1)
Expiration
date
Steven Roberts
Options
2,000,000
611,150
0.10
3/1/2027
Emanuel (Manny) Bettencourt
Options
1,000,000
333,352
0.10
1/15/2027
Mahendra Naik
Options
1,000,000
277,798
0.10
3/1/2027
Shibu Abraham
Options
1,000,000
83,359
0.20
10/22/2027
_____________
(1) In US dollars
(2) No fees were paid to directors during the year.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Securities Authorized for Issuance Under Equity Compensation Plans
In December 2018, the Company's Board of Directors approved and the majority of shareholders consented to the adoption of an equity-based compensation plan. The total instruments convertible into common stock of the Company cannot exceed 20,000,000 options to purchase shares at any one point in time. The maximum awards to any one grantee is subject to certain restrictions.
On December 14, 2018, the Company issued 5,400,000 stock options to directors, officers, employees and consultants of the Company and have a life of five years from date of grant. All of them vest immediately and must be exercised by the recipient.
During year ended December 31, 2019 the Company cancelled the 5,400,000 stock options issued on December 14, 2018.
On January 15, 2020, the Company issued 3,000,000 common stock purchase options at an exercise price of $0.10 to directors, officers and consultants of the Company. 83,415 of these options vested immediately and are exercisable for seven years from the grant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.10 and would vest ratably over a three-year period from the date of grant.
On March 11, 2020, the Company granted 2,000,000 common stock purchase options at an exercise price of $0.10 to two directors of the Company. 55,610 of these options vested immediately and are exercisable for seven years from the grant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.10 and would vest ratably over a three-year period from the date of grant.
On October 22, 2020, the Company granted 1,000,000 common stock purchase options at an exercise price of $0.20 to an Officer of the Company. 27,805 of these options vested immediately and are exercisable for seven years from the grant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.20 and would vest ratably over a three-year period from the date of grant.
Security Ownership of Certain Beneficial Owners and Management
The following tables set forth information as of September 24, 2021, regarding the beneficial ownership of our common stock (a) by each stockholder who is known by the Company to own beneficially in excess of 5% of our outstanding common stock; (b) by each of the Company's officers and directors; (c) and by the Company's officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of stock. Unless otherwise identified, the address of the directors and officers of the Company listed above is 2455 Cawthra Rd, Unit 75 Mississauga, Ontario Canada, L5A3P1.
Title of Class Name of Beneficial Owner Office, if any Amount of
shares
controlled Percent
of
class
Common Stock 2425287 Ontario Inc.
6,335,612 5.71 %
Common Stock Jose Nieves
5,650,000 5.098 %
Common Stock Rob Lee
11,773,368 10.62 %
(1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities
Changes in Control
There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Other than as noted in Section 11 and mentioned in other items in the form, there are no related party transactions.
Promoters and Certain Control Persons
We did not have any promoters at any time during the past five fiscal years.
Our executive officers and directors from time to time may serve on the board of directors executive officers of other companies. However, none of our executive officer or directors serve as executive officers or directors or on the compensation committee of another company that has any executive officer serving on our Board of Directors (or Board of Directors acting as the Compensation Committee).
No person who served on our Board of Directors (or Board of Directors acting as the Compensation Committee) had any relationship requiring disclosure under Item 404 of Regulation S-K.
Director Independence
Steven Roberts and Mahendra Naik was deemed to be an "independent director", as that term is defined by the listing standards of the national exchanges and SEC rules during the period ended December 31, 2020.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
SRCO Professional Corporation is our Principal Independent Registered Public Accountants engaged to audit our financial statements for the period ended December 31, 2020. The following table shows the fees that we paid or accrued for the audit for the year ended December 31, 2020 and December 31, 2019.
Fee Category December 31, 2020 December 31, 2019
Audit Fees and quarterly review $ 85,000 $ 60,000
Audit-Related Fees $ - $ -
Tax Fees $ - $ -
All Other Fees $ - $ -
Audit Fees
This category consists of fees for professional services rendered by our principal independent registered public accountant for the audit of our annual financial statements, review of financial statements included in our quarterly reports and services that are normally provided by the independent registered public accounting firms in connection with statutory and regulatory filings or engagements for those fiscal years.
Audit-Related Fees
This category consists of fees for assurance and related services by our principal independent registered public accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees". The services for the fees disclosed under this category include consultations concerning financial accounting and reporting standards.
Tax Fees
This category consists of fees for professional services rendered by our principal independent registered public accountant for tax compliance, tax advice, and tax planning.
All Other Fees
This category consists of fees for services provided by our principal independent registered public accountant other than the services described above.
PART IV

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this Form 10-K:
Exhibit No.
Description
31.1
Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certifications of Principal Financial Officer furnished 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 Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document