ITEM 5. MARKET FOR COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is quoted
on OTC Markets under the symbol “JPEX”. We had approximately 313 registered holders of our common stock as of December
31, 2015. Registered holders do not include those stockholders whose stock has been issued in street name. The last reported price
for our common stock on April 5, 2016 was $0.0015 per share.
The following table reflects
the high and low closing sales prices per share of our common stock during each calendar quarter as reported on OTC Markets:
|
|
|
|
|
Price Range
(1)
|
|
|
High
|
|
Low
|
Fiscal 2015
|
|
|
|
|
|
|
|
|
Fourth quarter
|
|
$
|
0.29
|
|
|
$
|
0.0652
|
|
Third quarter
|
|
$
|
0.32
|
|
|
$
|
0.08
|
|
Second quarter
|
|
$
|
1.99
|
|
|
$
|
0.29
|
|
First quarter
|
|
$
|
1.99
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2014
|
|
|
|
|
|
|
|
|
Fourth quarter
|
|
$
|
3.00
|
|
|
$
|
1.00
|
|
Third quarter
|
|
$
|
1.39
|
|
|
$
|
0.27
|
|
Second quarter
|
|
$
|
1.45
|
|
|
$
|
0.26
|
|
First quarter
|
|
$
|
1.41
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
|
___________________
|
(1)
|
The above quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission
and may not necessarily represent actual transactions.
|
Number of Holders
As of March 31, 2016,
there were approximately 313 record holders of our common stock, not counting shares held in “street name” in
brokerage accounts which is unknown. As of March 31, 2016, there were 167,455,809 shares of common stock outstanding on
record with our stock transfer agent.
Dividends
The Company has not paid
any cash dividends on its Common Stock since inception and does not anticipate paying cash dividends in the foreseeable future.
The Company anticipates that any future earnings will be retained for use in developing and/or expanding the business.
Sales of Unregistered Securities
On February 5, 2014,
the Company entered into an agreement to acquire all of the assets of Scorpex, Inc., a Nevada corporation, in exchange for
105,000,000 shares of common stock and 10,000,000 shares of Series B Preferred Stock of the Company.
On January 6,
2014, the Company issued 1,000 shares of Series A Preferred Stock as security for outstanding debts of the Company to
Joseph Caywood. Although the preferred stock carries no dividend, distribution, liquidation or conversion rights, each share
of Series A preferred stock carries one hundred thousand (100,000) votes, and holders of our preferred stock are able to vote
together with our common stockholders on all matters upon which common stockholders may vote. Consequently, the holders of
our Series A preferred stock is able to unilaterally control the election of our board of directors and, ultimately, the
direction of our Company.
From May 6, 2014 to July
10, 2014, pursuant to the Consulting Agreement with South Bay Holdings, Inc. dated June 1, 2013 (term ended June 1, 2014), the
Company issued a total of 7,991,620 shares of common stock to 16 individuals/entities for services rendered to the Company. The
stock was valued at a total of $10,398,916 and is included in consulting fees on the 2014 statement of operations.
From May 23, 2014 to July
16, 2014, the Company sold a total of 2,820,000 shares of common stock to 17 individuals/entities at $0.10 per share for total
cash proceeds of $282,000.
On July 10, 2014, pursuant
to a Consulting Agreement with Joseph Caywood dated July 9, 2014 (term ended December 31, 2014), the Company issued 4,000,000 shares
of common stock to Mitchell Dean Hovendick for services rendered to the Company. The stock was valued at $1,080,000 and is included
in consulting fees on the 2014 statement of operations.
On August 7, 2014, pursuant
to a Consulting Agreement with Joseph Caywood dated August 7, 2014 (term ended December 31, 2014), the Company issued 10,250,000
shares of common stock to Mitchell Dean Hovendick for services rendered to the Company. The stock was valued at $12,402,500 and
is included in consulting fees on the 2014 statement of operations.
On October 23, 2014, pursuant
to a Consulting Agreement with Wild Cherry Limited, LLC dated October 1, 2014 (term ended December 31, 2014), the Company issued
3,000,000 shares of common stock to Wild Cherry Limited, LLC for services rendered to the Company. The stock was valued at $3,750,000
and is included in consulting fees on the 2014 statement of operations.
On December 2, 2014, the
Company issued 150,000 shares of common stock to an individual for services rendered to the Company. The stock was valued at $300,000
and is included in consulting fees on the 2014 statement of operations.
On February 17, 2015, the
Company issued 2,050,000 shares of restricted common stock for consulting services rendered.
With respect to the transactions
noted above, no solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The
Company believes that the issuance of the shares as described above was exempt from registration with the Securities and Exchange
Commission pursuant to Section 4(2) of the Securities Act of 1933.
Penny Stock Rules
The SEC has also adopted
rules that regulate broker-dealer practices in connection with transactions in “penny stocks” as such term is defined
by Rule 15g-9. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the Nasdaq system provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system).
The shares offered by this
prospectus constitute penny stocks under the Exchange Act. The shares may remain penny stocks for the foreseeable future. The classification
of our shares as penny stocks makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes
it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose
of selling his or her shares in JPX Global will be subject to the penny stock rules.
The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure
document approved by the SEC, which: (i) contains a description of the nature and level of risk in the market for penny stocks
in both public offerings and secondary trading; (ii) contains a description of the broker’s or dealer’s duties to the
customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements
of the Securities Act; (iii) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for
penny stocks and significance of the spread between the bid and ask price; (iv) contains a toll-free telephone number for inquiries
on disciplinary actions; (v) defines significant terms in the disclosure document or in the conduct of trading in penny stocks;
and (vi) contains such other information and is in such form as the SEC shall require by rule or regulation. The broker-dealer
also must provide to the customer, prior to effecting any transaction in a penny stock, (i) bid and offer quotations for the penny
stock; (ii) the compensation of the broker-dealer and its salesperson in the transaction; (iii) the number of shares to which such
bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
(iv) monthly account statements showing the market value of each penny stock held in the customer’s account.
In addition, the penny
stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those 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 acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks,
and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing
the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders
may have difficulty selling those securities.
ITEM 7. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This report contains forward-looking
statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar
expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements.
Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons.
Overview
On February 5, 2014,
the Company entered into an agreement to acquire all of the assets of Scorpex, Inc., a Nevada corporation, in exchange for
105,000,000 shares of Common Stock and 10,000,000 shares of Series B Preferred Stock. We are now expanding our business to
further develop our operations to capitalize on the opportunities available primarily in Mexico, in the integrated waste, and
waste management service
operations, including the receiving, storage,
transfer and disposal of waste in an environmental manner. In providing these services, we intend to actively pursue projects and
initiatives that we believe make a positive difference for our environment which will be focused on gasification of waste in an
environmental manner. It is expected that our customer base will include commercial, industrial, municipal and residential customers,
other waste management companies, electric utilities, and governmental entity properties. We are an exploration stage company and
we have not realized any revenues to date. We do not have sufficient capital to enable us to commence and complete our exploration
program. We will require additional financing in order to conduct the exploration program described herein." Our auditors
have issued a going concern opinion, raising substantial doubt about the Company's financial prospects, and the Company’s
ability to continue as a going concern. As a waste management company, our principal sources of revenue will result from waste
management contracts, but will also include revenue from ancillary services related to the handling and conversion of waste. Expenses
which comprise the costs of goods sold include the operational and staffing costs of the trucks and other vehicles used for transporting
and special licensing where required. General and administrative expenses have been comprised of administrative wages and benefits;
occupancy and office expenses; outside legal, accounting and other professional fees; travel and other miscellaneous office and
administrative expenses. Selling and marketing expenses include selling/marketing wages and benefits, advertising and promotional
expenses, as well as travel and other miscellaneous related expenses.
Because we have incurred
losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards, given our
uncertainty of being able to utilize such loss carryforwards in future years. We anticipate incurring additional losses during
the coming year.
Results of Operations
Following is management’s
discussion of the relevant items affecting results of operations for the years ended December 31, 2015 and 2014.
Revenues
. The Company
generated net revenues of $-0- during both years ended December 31, 2015 and 2014.
Consulting
Fees
. Consulting fees for the year ended December 31, 2015 were $2,050,000 compared to $28,156,416 for the year ended
December 31, 2014. During the year ended December 31, 2014 the Company issued 25,391,620 shares of common stock for services
rendered to the Company. The shares were valued at $27,931,416 which represented the market price on the dates of
issuance.
Professional
Fees.
Professional fees for the year ended December 31, 2015 were $52,557 compared to $88,906 for the year ended
December 31, 2014. Professional fees consist mainly of the fees for the audits and reviews of the Company’s financial
statements as well as the filings with the SEC. We anticipate that professional fees will increase in future periods as we
scale up our operations.
Other General and
Administrative Expenses.
Other general and administrative expenses for the year ended December 31, 2015 were $1,592
compared to $22,191 for the year ended December 31, 2014. The Company expects other general and administrative expenses to
increase in future periods as we scale up our operations.
Other Income
(Expense).
The Company had net other expenses of $752 for the year ended December 31, 2015 compared to net other income
of $2,152,956 during 2014. The net other income in 2014 includes a gain on the change in fair value of derivative liability
of $2,255,855. This derivative liability was calculated using the Black-Scholes model. Other expenses consist of interest
expenses and the fair value of preferred stock issued to a related party in 2014 as security for liabilities due to the
related party.
Liquidity and Capital Resources
As of December 31,
2015, the Company’s primary source of liquidity consisted of $83 in cash and cash equivalents. Since inception, the
Company has financed its operations through a combination of short -term loans from related parties and others and through
the private placement of its common stock.
The Company
has sustained significant net losses which have resulted in an accumulated deficit at December 31, 2015 of $33,303,334 and
is currently experiencing a substantial shortfall in operating capital which raises doubt about the Company’s ability
to continue as a going concern. The Company generated a net loss for the year ended December 31, 2015 of $2,104,901 compared
to a net loss for the year ended December 31, 2014 of $26,114,557. Without additional revenues, working capital loans, or
equity investment, there is substantial doubt as to our ability to continue operations.
We believe these conditions
have resulted from the inherent risks associated with small public companies. Such risks include, but are not limited to, the ability
to (i) generate revenues and sales of our products and services at levels sufficient to cover our costs and provide a return for
investors, (ii) attract additional capital in order to finance growth, and (iii) successfully compete with other comparable companies
having financial, production and marketing resources significantly greater than those of the Company.
We believe that our capital
resources are insufficient for ongoing operations, with minimal current cash reserves, particularly given the resources necessary
to expand our waste management business. We will likely require considerable amounts of financing to make any significant advancement
in our business strategy. There is presently no agreement in place that will guarantee financing for our Company, and we cannot
assure you that we will be able to raise any additional funds, or that such funds will be available on acceptable terms. Funds
raised through future equity financing will likely be substantially dilutive to current shareholders. Lack of additional funds
will materially affect our Company and our business, and may cause us to substantially curtail or even cease operations. Consequently,
you could incur a loss of your entire investment in the Company.
Off-Balance Sheet Arrangements
We do not have any off-balance
sheet arrangements.
Critical Accounting Policies
We believe the following
critical accounting policies are used in the preparation of our financial statements:
Use of Estimates.
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates. On a periodic basis, management reviews those estimates, including those
related to valuation allowances, loss contingencies, income taxes, and projection of future cash flows.
Research and Development.
Research
and development costs are charged to operations when incurred and are included in operating expenses.
Recent Accounting Pronouncements
See Note 3 in the Notes
to the Financial Statements for recent accounting pronouncements.
There were various other
accounting standards and interpretations recently issued, none of which are expected to a have a material impact on the Company's
financial position, operations or cash flows.
Forward-Looking Statements
This report contains or
incorporates by reference forward-looking statements within the meaning of the United States Private Securities Litigation Reform
Act of 1995 concerning our future business plans and strategies, the receipt of working capital, future revenues and other statements
that are not historical in nature. In this report, forward-looking statements are often identified by the words “anticipate,”
“plan,” “believe,” “expect,” “estimate,” and the like. These forward-looking statements
reflect our current beliefs, expectations and opinions with respect to future events, and involve future risks and uncertainties
which could cause actual results to differ materially from those expressed or implied.
Other uncertainties that
could affect the accuracy of forward-looking statements include:
•
|
|
the worldwide economic situation;
|
•
|
|
any changes in interest rates or inflation;
|
•
|
|
the willingness and ability of third parties to honor
their contractual commitments;
|
•
|
|
our ability to raise additional capital, as it may be
affected by current conditions in the stock market and competition for risk capital;
|
•
|
|
our capital expenditures, as they may be affected by
delays or cost overruns;
|
•
|
|
environmental and other regulations, as the same presently
exist or may later be amended;
|
•
|
|
our ability to identify, finance and integrate any future
acquisitions; and
|
•
|
|
the volatility of our common stock price.
|
This list is not exhaustive
of the factors that may affect any of our forward-looking statements. You should read this report completely and with the understanding
that our actual future results may be materially different from what we expect. These forward-looking statements represent our
beliefs, expectations and opinions only as of the date of this report. We do not intend to update these forward looking statements
except as required by law. We qualify all of our forward-looking statements by these cautionary statements.
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders
of
JPX Global, Inc.
I have audited the accompanying balance sheets
of JPX Global, Inc. (the “Company”) as of December 31, 2015 and 2014 and the related statements of operations, stockholders’
deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management.
My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of JPX Global, Inc. as of December 31, 2015 and 2014
and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted
in the United States.
The accompanying financial statements referred
to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern.
Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ MICHAEL T. STUDER,
CPA, P.C.
Michael T. Studer, CPA,
P.C.
Freeport, New York
April 14, 2016
JPX GLOBAL, INC.
|
(formerly Jasper Explorations Inc.)
|
Balance Sheets
|
|
|
|
|
|
ASSETS
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
83
|
|
|
$
|
342
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
|
83
|
|
|
|
342
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
83
|
|
|
$
|
342
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
29,902
|
|
|
$
|
15,338
|
|
Advances from related party
|
|
|
243,864
|
|
|
|
221,786
|
|
Notes payable to related party
|
|
|
18,000
|
|
|
|
—
|
|
Convertible loan payable - related party
|
|
|
1,500
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
293,266
|
|
|
|
238,624
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
293,266
|
|
|
|
238,624
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 40,000,000 shares authorized:
|
|
|
|
|
|
|
|
|
Series A Preferred Stock, $0.001 par value; 1,000 and
|
|
|
|
|
|
|
|
|
1,000 shares issued and outstanding, respectively
|
|
|
1
|
|
|
|
1
|
|
Series B Preferred Stock, $0.001 par value; 10,000,000 and
|
|
|
|
|
|
|
|
|
10,000,000 shares issued and outstanding, respectively
|
|
|
10,000
|
|
|
|
10,000
|
|
Common stock, $0.001 par value; 500,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
167,455,809 and 165,405,809 shares issued and outstanding, respectively
|
|
|
167,456
|
|
|
|
165,406
|
|
Additional paid-in capital
|
|
|
32,832,694
|
|
|
|
30,784,744
|
|
Accumulated deficit
|
|
|
(33,303,334
|
)
|
|
|
(31,198,433
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders' Deficit
|
|
|
(293,183
|
)
|
|
|
(238,282
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
83
|
|
|
$
|
342
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements
|
JPX GLOBAL, INC.
|
(formerly Jasper Explorations Inc.)
|
Statements of Operations
|
|
|
|
|
|
|
|
For the Years Ended
|
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
NET REVENUES
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting fees (including stock-based compensation of
|
|
|
|
|
|
|
|
|
$2,050,000 and $27,931,416, respectively)
|
|
|
2,050,000
|
|
|
|
28,156,416
|
|
Professional and accounting fees
|
|
|
52,557
|
|
|
|
88,906
|
|
Other general and administrative
|
|
|
1,592
|
|
|
|
22,191
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
2,104,149
|
|
|
|
28,267,513
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(2,104,149
|
)
|
|
|
(28,267,513
|
)
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of Series A Preferred Stock issued to related party
|
|
|
|
|
|
|
|
|
as security for liabilities due to related party
|
|
|
—
|
|
|
|
(100,000
|
)
|
Interest expense
|
|
|
(752
|
)
|
|
|
(2,899
|
)
|
Gain on change in fair value of derivative liability
|
|
|
—
|
|
|
|
2,255,855
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expenses)
|
|
|
(752
|
)
|
|
|
2,152,956
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
(2,104,901
|
)
|
|
$
|
(26,114,557
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share - basic and diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
|
|
|
|
|
|
|
|
|
outstanding - basic and diluted
|
|
|
167,186,220
|
|
|
|
137,037,069
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements
|
JPX GLOBAL, INC.
|
(formerly Jasper Explorations Inc.)
|
Statements of Stockholders' Deficit
|
From January 1, 2014 through December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
Series B
|
|
|
|
|
|
Additional
|
|
|
|
Total
|
|
|
Preferred Stock
|
|
Preferred Stock
|
|
Common Stock
|
|
Paid-in
|
|
Accumulated
|
|
Stockholders'
|
|
|
Shares
|
|
Par
|
|
Shares
|
|
Par
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2014
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,133,380
|
|
|
|
32,133
|
|
|
|
2,539,692
|
|
|
|
(5,083,876
|
)
|
|
|
(2,512,051
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for conversion of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
60,345
|
|
|
|
61
|
|
|
|
74,849
|
|
|
|
—
|
|
|
|
74,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for acquisition of assets (including 464 "round-up" shares from Scorpex, Inc. spin-off)
|
|
|
—
|
|
|
|
—
|
|
|
|
10,000,000
|
|
|
|
10,000
|
|
|
|
105,000,464
|
|
|
|
105,000
|
|
|
|
(115,000
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for security of debt
|
|
|
1,000
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
99,999
|
|
|
|
—
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,820,000
|
|
|
|
2,820
|
|
|
|
279,180
|
|
|
|
—
|
|
|
|
282,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,391,620
|
|
|
|
25,392
|
|
|
|
27,906,024
|
|
|
|
—
|
|
|
|
27,931,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(26,114,557
|
)
|
|
|
(26,114,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
|
1,000
|
|
|
|
1
|
|
|
|
10,000,000
|
|
|
|
10,000
|
|
|
|
165,405,809
|
|
|
|
165,406
|
|
|
|
30,784,744
|
|
|
|
(31,198,433
|
)
|
|
|
(238,282
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,050,000
|
|
|
|
2,050
|
|
|
|
2,047,950
|
|
|
|
—
|
|
|
|
2,050,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,104,901
|
)
|
|
|
(2,104,901
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
|
1,000
|
|
|
$
|
1
|
|
|
|
10,000,000
|
|
|
$
|
10,000
|
|
|
|
167,455,809
|
|
|
$
|
167,456
|
|
|
$
|
32,832,694
|
|
|
$
|
(33,303,334
|
)
|
|
$
|
(293,183
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements
|
JPX GLOBAL, INC.
|
(formerly Jasper Explorations Inc.)
|
Statements of Cash Flows
|
|
|
|
|
|
|
|
For the Years Ended
|
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(2,104,901
|
)
|
|
$
|
(26,114,557
|
)
|
Adjustments to reconcile net loss to net
|
|
|
|
|
|
|
|
|
cash used by operating activities:
|
|
|
|
|
|
|
|
|
Common stock issued for services
|
|
|
2,050,000
|
|
|
|
27,931,416
|
|
Series A Preferred Stock issued as security for liabilities
|
|
|
|
|
|
|
|
|
due to related party
|
|
|
—
|
|
|
|
100,000
|
|
Loss (Gain) on change in fair value of derivative liability
|
|
|
—
|
|
|
|
(2,255,855
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
14,564
|
|
|
|
5,962
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used by Operating Activities
|
|
|
(40,337
|
)
|
|
|
(333,034
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from advances from related party (net)
|
|
|
22,078
|
|
|
|
80,061
|
|
Proceeds from notes payable to related party
|
|
|
18,000
|
|
|
|
—
|
|
Proceeds from sale of common stock
|
|
|
—
|
|
|
|
282,000
|
|
Payments on convertible note payable
|
|
|
—
|
|
|
|
(29,250
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
|
40,078
|
|
|
|
332,811
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
(259
|
)
|
|
|
(223
|
)
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
342
|
|
|
|
565
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
83
|
|
|
$
|
342
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments For:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Non-cash activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of notes payable:
|
|
|
|
|
|
|
|
|
Satisfaction of notes payable
|
|
$
|
—
|
|
|
$
|
42,000
|
|
Reduction of derivative liability
|
|
|
—
|
|
|
|
32,910
|
|
Total
|
|
$
|
—
|
|
|
$
|
74,910
|
|
Series A Preferred Stock issued as security for liabilities
|
|
|
|
|
|
|
|
|
due to related party
|
|
$
|
—
|
|
|
$
|
100,000
|
|
Common stock issued for services
|
|
$
|
2,050,000
|
|
|
$
|
27,931,416
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements
|
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
1. ORGANIZATION
The Company was incorporated
under the laws of the state of Nevada on December 18, 2008, with 75,000,000 authorized common shares with a par value of $0.001.On
January 3, 2013, the Company approved the action to amend and restate the Articles of Incorporation to increase the authorized
common shares to 500,000,000 and create and authorize 40,000,000 shares of Preferred Stock which was approved by written consent
of the holder representing approximately 67% of the outstanding voting securities of the Company. Series A Preferred Stock was
created and designated with super-voting rights of 100,000 votes per share of Series A Preferred Stock held, but no conversion,
dividend, and liquidation rights.
On February 5, 2014, the
Company entered into an agreement to acquire all of the operating assets of Scorpex, Inc. (“Scorpex”) (an entity related
by common control) in exchange for 105,000,000 shares of common stock and 10,000,000 shares of Series B Preferred Stockof the Company.Scorpex
is majority owned and controlled by JPX Global, Inc.’s then controlling shareholder, Joseph Caywood. Each share of Series
B preferred stock is convertible into 10 shares of common stock and is entitled to vote ratably together with our common stockholders
on all matters upon which common stockholders may vote. With the acquisition of these assets, which consist primarily of a license
agreement, the Company has modified its business plan to include the development of waste management services including the storage,
recycling, and disposal of waste. The Company does not presently have any waste management operations.
The acquired assets consist
primarily of a license agreement between Scorpex and Tratamientos Ambientales Scorpion, S.A. de C.V. (a corporation formed under
the laws of Mexico) (“TAS”). This license agreement with TAS has been assigned to JPX. TAS is a wholly owned subsidiary
of Scorpex, and is, therefore, a common control entity. ASC 805-50-30-5 provides guidance on measuring assets and liabilities transferred
between entities under common control. As the entities are under common control and the license agreement had no basis on Scorpex’s
books they are being acquired at their carrying amounts (with no cost basis) on the date of transfer and, therefore, the transaction
value is $-0-.
The license agreement was
dated July 30, 2011 and provided Scorpex with an exclusive worldwide license for the permits, property, and any and all of TAS’s
other assets necessary for the business of storing, recycling, disposing, and treating waste in Mexico for a term of 10 years.
The agreement also provided for Scorpex’s annual payment to TAS of 20% of its Net Revenues (gross cash receipts less cost
of processing and other expenses excluding general, administrative, interest, and taxes) from the license. Pursuant to the Assignment
Consent dated February 3, 2014, TAS agreed to extend the term of the agreement every 10 years if operations have commenced pursuant
to the license agreement.
2. GOING CONCERN
The accompanying financial
statements have been prepared assuming that the Company will continue as a going concern. The company does not have sufficient
working capital for its planned activity, and to service its debt, which raises substantial doubt about its ability to continue
as a going concern. The Company has incurred accumulated losses of $33,303,334 since inception through December 31, 2015.
Continuation of the company
as a going concern is dependent upon obtaining additional working capital. The management of the Company has developed a strategy
which it believes will accomplish this objective through short term loans from related parties, and additional equity investments,
which will enable the company to continue operations for the coming year. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that
might result from this uncertainty.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes
income and expenses based on the accrual method of accounting. The Company follows accounting principles generally accepted in
the United States.
Income Tax
The Company utilizes the
liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined
based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred
tax assets is recorded, when it is more likely than not that such tax benefits will not be realized.
Basic and Diluted Net Income (loss) Per
Share
The Company follows ASC
Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined
by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per
common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common
share equivalents outstanding.
For the years ended December
31, 2015 and 2014, the common shares underlying the following dilutive securities were excluded from the calculation of diluted
shares outstanding as the effect of their inclusion would be anti-dilutive:
|
|
Common Shares Issuable
|
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
Convertible loan payable – related party
|
|
|
1,500,000
|
|
|
|
1,500,000
|
|
Series B Preferred Stock
|
|
|
100,000,000
|
|
|
|
100,000,000
|
|
Total common shares issuable
|
|
|
101,500,000
|
|
|
|
101,500,000
|
|
Cash & Cash Equivalents
For the purposes of the
statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash
equivalents.
Revenue Recognition
Revenue is recognized upon
completion of services or delivery of goods where the sales price is fixed or determinable and the collectability is reasonably
assured. The Company has no revenue to date.
Advertising and Market Development
The Company expenses
advertising and market development costs. As of December 31, 2015, the company has not incurred any advertising and market
development costs.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
Impairment of Long-Lived Assets
The Company reviews and
evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may
not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate
that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the
analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-10 through 15-5, Impairment or Disposal
of Long-Lived Assets.
Environmental Requirements
At the report date, environmental
requirements related to a formally held mineral claim are unknown and therefore any estimate of future costs cannot be made.
Mineral Property Acquisition Costs
Costs of acquisition and
option costs of mineral rights are capitalized upon acquisition. Mine development costs incurred to develop new ore deposits, to
expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once
proven and probable reserves exist and the property is a commercially mineable property.
Costs incurred to maintain
current production or to maintain assets on a standby basis are charged to operations. If the Company does not continue with exploration
after the completion of the feasibility study, the mineral rights will be expensed at that time. Costs of abandoned projects are
charged to mining costs including related property and equipment costs. To determine if these costs are in excess of their recoverable
amount, periodic evaluation of carrying value of capitalized costs and any related property and equipment costs are based upon
expected future cash flows and/or estimated salvage value in accordance with FASB Accounting Standards Codification (ASC) 360-10-35-15,
Impairment or Disposal of Long-Lived Assets.
Various factors could impact
our ability to achieve forecasted production schedules. Additionally, commodity prices, capital expenditure requirements and reclamation
costs could differ from the assumptions the Company may use in cash flow models from exploration stage mineral interests. This,
however, involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves
have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
Estimates and Assumptions
Management uses estimates
and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates
and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial
statements.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
Stock-based compensation
The Company records stock
based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related
to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using
the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes
the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
The Company accounts for
equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC
718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or
completion of performance by the provider of goods or services as defined by FASB ASC 505-50.
Fair value of financial instruments
Fair value estimates discussed
herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2015. The
respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments
include cash and cash equivalents, accounts payable and accrued liabilities, advances from related party, notes payable to related
parties and convertible loan payable – related party. Fair values were assumed to approximate carrying values for cash and
payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Level 1: The preferred
inputs to valuation efforts are "quoted prices in active markets for identical assets or liabilities," with the caveat
that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions
involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items,
especially physical assets, actually trade in active markets.
Level 2: FASB
acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist,
they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second
level of inputs that can be applied in three situations.
Level 3: If inputs from
levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The
board describes Level 3 inputs as "unobservable," and limits their use by saying they "shall be used to measure
fair value to the extent that observable inputs are not available." This category allows "for situations in which there
is little, if any, market activity for the asset or liability at the measurement date". Earlier in the standard, FASB explains
that "observable inputs" are gathered from sources other than the reporting company and that they are expected to reflect
assumptions made by market participants.
Recent Accounting Pronouncements
The Company has evaluated
recent accounting pronouncements and believes that none of them will have a material effect on the company’s financial statements.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
4. ADVANCES FROM RELATED PARTY
The advances from related
party liability at December 31, 2015 ($243,864) and 2014 ($221,786) is due to Joseph Caywood, significant stockholder of the Company.
The liability is non-interest bearing and there are no terms of repayment.
5. NOTES PAYABLE TO RELATED PARTY
The notes payable to related party at December
31, 2015 ($18,000) is due to Mitchell Dean Hovendick, significant stockholder of the Company, and consist of:
Promissory note dated May 20, 2015, interest at 8% per annum, interest and principal due November 20, 2015
|
|
$
|
8,000
|
|
Promissory note dated June 24, 2015, interest at 8% per annum, interest and principal due December 24, 2015
|
|
|
8,000
|
|
Promissory note dated November 15, 2015, interest at 8% per annum, interest and principal due May 15, 2016
|
|
|
2,000
|
|
Total
|
|
$
|
18,000
|
|
6. CONVERTIBLE LOAN PAYABLE – RELATED
PARTY
On December 18, 2008, the
Company entered into a Promissory Note agreement with the then CEO of the Company. The note is for a sum of $1,500, is non interest
bearing, and was due and payable on December 31, 2010. The note provides that if the note was not paid on December 31, 2010, the
note can be converted to shares of common stock of the Company for $.001 per share. At the time the note was issued, the Company
did not have a fair value for the stock: therefore, no beneficial conversion feature was recorded. The Company and Joseph Caywood,
the current note holder, have verbally agreed that the Company will pay the loan off as it is able to without penalty, and the
current note holder will not convert the debt into shares of common stock. As of December 31, 2015 and December 31, 2014, the balance
of the loan is $1,500.
7. CONVERTIBLE NOTE PAYABLE
On June 25, 2013, the Company
entered into a Securities Purchase Agreement (“SPA”) in connection with the issuance of a convertible promissory note
in the aggregate principal amount of $47,500. The Note provided for interest at the rate of 8% per annum (default rate of
22% per annum) and was not prepayable prior to the maturity date of March 28, 2014. The Note, together with all interest as accrued,
was convertible into shares of the Company’s common stock at a price equal to 58% multiplied by the average of the lowest
three (3) trading prices for the Common Stock during the ten (10) trading day period ending on the latest complete trading day
prior to the date of conversion (representing a discount rate of 42%). The amount due and payable under the Note was to be increased
to 150% of the principal amount of the Note, plus default interest as accrued thereon, in the event of default. On November
20, 2013, the Company defaulted on this Note. As a result of this default, the Note became immediately due within 5 days
of the notice and the principal amount of $71,250 was demanded by the holder of the Note, Asher Enterprises, Inc.
During the year ended December
31, 2014, Asher Enterprises converted $42,000 of the note into 60,345 shares of common stock and the balance of the note of $29,250
was paid by the Company.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
8. DERIVATIVE LIABILITY
For the year ended December
31, 2014, the derivative liability changed as follows:
|
|
Convertible Loan Payable – Related Party (Note 6)
|
|
Convertible Note Payable (Note 7)
|
|
Total
|
Balance, December 31, 2013
|
|
$
|
2,113,526
|
|
|
$
|
175,239
|
|
|
$
|
2,288,765
|
|
Conversion of note payable into common stock
|
|
|
—
|
|
|
|
(32,910
|
)
|
|
|
(32,910
|
)
|
Change in fair value of derivative liability
|
|
|
(2,113,526
|
)
|
|
|
(142,329
|
)
|
|
|
(2,255,855
|
)
|
Balance, December 31, 2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. CAPITAL STOCK
On January 6, 2014, the
Company issued 1,000 shares of Series A Preferred Stock to Joseph Caywood as security for the Company’s indebtedness due
Mr. Caywood. The stock was valued at $100,000 and is included in other income (expenses) on the 2014 statement of operations. The
Series A Preferred Stock carries no dividend, distribution, liquidation or conversion rights. Each share of Series A Preferred
Stock carries 100,000 votes, and holders of our Series A Preferred Stock are able to vote together with our common stockholders
on all matters upon which common stockholders may vote.
On January 8, 2014, January
28, 2014, and February 14, 2014 (see Note 7 above), the Company issued a total of 60,345 shares of common stock to Asher Enterprises,
Inc. in satisfaction of a total of $42,000 of a convertible note payable due to Asher Enterprises.
On February 5, 2014 (see
Note 1 above), the Company issued 105,000,000 shares of common stock and 10,000,000 shares of Series B Preferred Stock to Scorpex
in connection with the Company’s acquisition of all the operating assets of Scorpex. Scorpex is majority owned and controlled
by the Company’s significant shareholder Joseph Caywood. Each share of Series B preferred stock is convertible into 10 shares
of common stock and is entitled to vote ratably together with our common stockholders on all matters upon which common stockholders
may vote.
From May 6, 2014 to July
10, 2014, pursuant to the Consulting Agreement with South Bay Holdings, Inc. dated June 1, 2013 (term ended June 1, 2014), the
Company issued a total of 7,991,620 shares of common stock to 16 individuals/entities for services rendered to the Company. The
stock was valued at a total of $10,398,916 and is included in consulting fees on the 2014 statement of operations.
From May 23, 2014 to July
16, 2014, the Company sold a total of 2,820,000 shares of common stock to 17 individuals/entities at $0.10 per share for total
cash proceeds of $282,000.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
On July 10, 2014, pursuant
to a Consulting Agreement with Joseph Caywood dated July 9, 2014 (term ended December 31, 2014), the Company issued 4,000,000 shares
of common stock to Mitchell Dean Hovendick for services rendered to the Company. The stock was valued at $1,080,000 and is included
in consulting fees on the 2014 statement of operations.
On August 7, 2014, pursuant
to a Consulting Agreement with Joseph Caywood dated August 7, 2014 (term ended December 31, 2014), the Company issued 10,250,000
shares of common stock to Mitchell Dean Hovendick for services rendered to the Company. The stock was valued at $12,402,500 and
is included in consulting fees on the 2014 statement of operations.
On October 23, 2014, pursuant
to a Consulting Agreement with Wild Cherry Limited, LLC dated October 1, 2014 (term ended December 31, 2014), the Company issued
3,000,000 shares of common stock to Wild Cherry Limited, LLC for services rendered to the Company. The stock was valued at $3,750,000
and is included in consulting fees on the 2014 statement of operations.
On December 2, 2014, the
Company issued 150,000 shares of common stock to an individual for services rendered to the Company. The stock was valued at $300,000
and is included in consulting fees on the 2014 statement of operations.
On February 17, 2015, pursuant to a Consulting
Agreement with Joseph Caywood dated January 1, 2015, (term ended March 31, 2015), the Company issued a total of 2,050,000 shares
of common stock to 18 individuals/entities for services rendered to the Company. The stock was valued at $2,050,000 and is included
in consulting fees on the 2015 statement of operations.
10. INCOME TAXES
The Financial
Accounting Standards Board (FASB) has issued FASB ASC 740-10. FASB ASC 740-10 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise's financial statements. This standard requires a company to determine whether it
is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position.
If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize
in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material
tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10.
Deferred taxes
are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.
At December 31,
2015 the Company had net operating loss carryforwards of approximately $671,000 that may be offset against future taxable income
through 2035. No tax benefits have been reported in the financial statements, because the potential tax benefits of the net operating
loss carry forwards are offset by a valuation allowance of the same amount.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
Due to the change
in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes
are subject to annual limitations. Should a significant change in ownership occur, net operating loss carryforwards may be limited
as to use in the future.
Net deferred
tax assets consist of the following components as of December 31, 2015 and 2014:
|
|
2015
|
|
2014
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
NOL Carryover
|
|
$
|
228,193
|
|
|
$
|
209,527
|
|
Valuation allowance
|
|
|
(228,193
|
)
|
|
|
(209,527
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
The income tax
provision (benefit) differs from the amount of income tax determined by applying the U.S. federal tax rates of 34% to pretax income
for the years ended December 31, 2015 and 2014 due to the following:
|
|
2015
|
|
2014
|
Expected tax at 34%
|
|
$
|
(715,666
|
)
|
|
$
|
(8,878,949
|
)
|
Non-deductible stock-based compensation
|
|
|
697,000
|
|
|
|
9,496,681
|
|
Non-deductible other expense relating to issuance of Series A Preferred Stock
|
|
|
—
|
|
|
|
34,000
|
|
Non-deductible loss (non-taxable gain) on change in fair value of derivative liability
|
|
|
—
|
|
|
|
(766,991
|
)
|
Change in valuation allowance
|
|
|
18,666
|
|
|
|
115,259
|
|
Provision for (benefit from) income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
A reconciliation of the
beginning and ending amount of unrecognized tax benefits is as follows:
|
|
|
Year ended December 31,
|
|
|
|
2015
|
|
|
|
2014
|
|
Beginning balance
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions based on tax positions related to current year
|
|
|
—
|
|
|
|
—
|
|
Additions for tax positions of prior years
|
|
|
—
|
|
|
|
—
|
|
Reductions for tax positions of prior years
|
|
|
—
|
|
|
|
—
|
|
Reductions in benefit due to income tax expense
|
|
|
—
|
|
|
|
—
|
|
Ending balance
|
|
$
|
—
|
|
|
$
|
—
|
|
At December 31,
2015, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate.
JPX Global, Inc.
(f/k/a Jasper Explorations Inc.)
|
NOTES TO THE FINANCIAL STATEMENTS
|
December 31, 2015 and 2014
|
The Company did
not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly
increase or decrease within the next 12 months.
The Company includes
interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision
for income taxes. As of December 31, 2015 and 2014, the Company had no accrued interest or penalties related to uncertain
tax positions.
The tax years
that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2015, 2014, 2013 and
2012.
11. CONTINGENCY
On May 20, 2014, the Company
was served in a Utah lawsuit entitled “Robert Denman, Plaintiff, v. JPX Global, Inc., Joseph A. Caywood, and John D. Thomas,
Defendents”. The lawsuit alleges breach of contract in connection with a December 2012 Stock Purchase Agreement (the “SPA”)
between Robert Denman (“Denman”) and Joseph Caywood (“Caywood”). The lawsuit alleges that Caywood failed
to pay Denman any of the $100,000 Promissory Note due February 28, 2013 which Denman received from Caywood as consideration for
the agreed sale of 20,000,000 shares of common stock pursuant to the SPA and that the Company has not returned the 20,000,000 shares
of common stock (which are still registered in the name of Denman) to Denman.
On August 28, 2014, pursuant
to a Motion to Dismiss filed by the Company on August 26, 2014, the Utah court dismissed all claims against the Company for lack
of personal jurisdiction but retained jurisdiction over the 20,000,000 shares of common stock in question until the issuance of
an appropriate, final order regarding the disposition thereof.