YSTRATEGIES
CORP.
BALANCE
SHEETS
|
|
September 30, 2017
(Unaudited)
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash
|
|
|
2,500
|
|
|
|
834
|
Prepaid expenses
|
|
|
54,502
|
|
|
|
2,934
|
Total Current Assets
|
|
|
57,002
|
|
|
|
3,768
|
|
|
|
|
|
|
|
|
Long term assets
|
|
|
|
|
|
|
|
Prepaid expenses, non-current
|
|
|
50,314
|
|
|
|
8,231
|
Total long-term assets
|
|
|
50,314
|
|
|
|
8,231
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
107,316
|
|
|
$
|
11,999
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
85,005
|
|
|
$
|
69,211
|
Due to related parties
|
|
|
156,099
|
|
|
|
77,385
|
Total current liabilities
|
|
$
|
241,104
|
|
|
$
|
146,596
|
|
|
|
|
|
|
|
|
Long term liabilities
|
|
|
|
|
|
|
|
Convertible notes payable-related parties, net
|
|
|
3,500
|
|
|
|
23,420
|
Convertible note payable-net
|
|
|
4,144
|
|
|
|
—
|
Total long term liabilities
|
|
|
7,644
|
|
|
|
23,420
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
248,748
|
|
|
|
170,016
|
|
|
|
|
|
|
|
|
Stockholders' deficit
|
|
|
|
|
|
|
|
Common stock, $0.001 par value; 75,000,000 shares authorized; 17,113,728 and 14,837,915 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
|
|
|
17,114
|
|
|
|
14,838
|
Additional paid-in capital
|
|
|
3,312,059
|
|
|
|
2,678,728
|
Stock payable
|
|
|
1,700
|
|
|
|
—
|
Accumulated deficit
|
|
|
(3,472,305
|
)
|
|
|
(2,851,583)
|
Total stockholders' deficit
|
|
|
(141,432
|
)
|
|
|
(158,017)
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' deficit
|
|
$
|
107,316
|
|
|
$
|
11,999
|
The
accompanying notes are an integral part of these unaudited financial statements
YSTRATEGIES
CORP.
STATEMENT
OF OPERATIONS
(UNAUDITED)
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Revenue
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,580
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,966
|
General and administrative
|
|
|
169,133
|
|
|
22,213
|
|
|
598,370
|
|
|
1,973,343
|
Total operating expenses
|
|
|
169,133
|
|
|
22,213
|
|
|
598,370
|
|
|
1,977,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(169,133)
|
|
|
(22,213)
|
|
|
(598,370)
|
|
|
(1,968,729)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(13,934)
|
|
|
(845)
|
|
|
(49,352)
|
|
|
(1,770)
|
Gain on settlement of accrued liabilities
|
|
|
—
|
|
|
—
|
|
|
27,000
|
|
|
—
|
Total other income (expense)
|
|
|
(13,934)
|
|
|
(845)
|
|
|
(22,352)
|
|
|
(1,770)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(183,067)
|
|
$
|
(23,058)
|
|
$
|
(620,722)
|
|
$
|
(1,970,499)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share: basic and diluted
|
|
$
|
(0.01)
|
|
$
|
(0.00)
|
|
$
|
(0.04)
|
|
$
|
(0.21)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted
|
|
|
16,668,214
|
|
|
13,589,654
|
|
|
16,080,415
|
|
|
9,174,138
|
The
accompanying notes are an integral part of these unaudited financial statements
YSTRATEGIES
CORP.
STATEMENT
OF CASH FLOWS
(UNAUDITED)
|
|
For the nine months ended
|
|
|
September 30, 2017
|
|
September 30, 2016
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(620,722)
|
|
$
|
(1,970,499)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
Amortization of debt discount
|
|
|
38,380
|
|
|
60
|
Expenses paid by related party on behalf of Company
|
|
|
52,314
|
|
|
|
Gain on settlement of accrued liabilites
|
|
|
(27,000)
|
|
|
—
|
Common stock and warrants issued for services
|
|
|
253,435
|
|
|
1,901,677
|
Depreciation
|
|
|
—
|
|
|
357
|
Changes in assets and liabilities
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
48,885
|
|
|
(165)
|
Accounts receivable
|
|
|
—
|
|
|
7,090
|
Accounts payable and accrued liabilities
|
|
|
199,674
|
|
|
21,855
|
Net cash from operating activities
|
|
|
(55,034)
|
|
|
(39,625)
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
Proceeds from the sale of common stock
|
|
|
1,700
|
|
|
30,000
|
Proceeds from convertible notes payable
|
|
|
50,000
|
|
|
10,000
|
Proceeds from convertible notes payable; related party
|
|
|
5,000
|
|
|
—
|
Net cash from financing activities
|
|
|
56,700
|
|
|
40,000
|
|
|
|
|
|
|
|
Net increase in cash
|
|
|
1,666
|
|
|
375
|
|
|
|
|
|
|
|
Cash, beginning of period
|
|
|
834
|
|
|
1,766
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
2,500
|
|
$
|
2,141
|
|
|
|
|
|
|
|
Non-Cash investing and financing transactions
|
|
|
|
|
|
|
Beneficial conversion feature
|
|
$
|
58,450
|
|
$
|
945
|
Shares issued for prepaid expenses
|
|
$
|
77,550
|
|
$
|
12,000
|
Warrants issued for prepaid expenses
|
|
$
|
64,986
|
|
$
|
—
|
Conversion of accrued comp to convertible note
|
|
$
|
108,600
|
|
$
|
—
|
Common stock issued for conversion of convertible note
|
|
$
|
160,186
|
|
$
|
—
|
Common stock issued for conversion of accrued comp
|
|
$
|
21,000
|
|
$
|
—
|
The
accompanying notes are an integral part of these unaudited financial statements
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED)
NOTE 1 – DESCRIPTION OF
BUSINESS
Ystrategies
Corp., located in Pittsburgh PA, was incorporated, on January 19, 2011, as India Ecommerce Corporation (the "Company")
under the laws of the State of Nevada. On March 9, 2016, India Ecommerce Corporation completed a merger with its wholly owned subsidiary,
Ystrategies Corp., a Nevada corporation, which was incorporated solely to effect a change of name. As a result, the Company
changed its name from India Ecommerce Corporation to Ystrategies Corp. The Company has modified its business model to include
the management of interests in technology platforms and growth businesses with a focus on long term ownership in strong intellectual
property positions.
NOTE 2 – BASIS OF PRESENTATION
AND SIGNIFICANT ACCOUNTING POLICIES
Basis of
Presentation
The accompanying
unaudited interim financial statements of Ystrategies have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with
the audited financial statements and notes thereto for the year ended December 31, 2016 contained in the Company's Form 10-K originally
filed with the Securities and Exchange Commission on April 21, 2017. In the opinion of management, all adjustments, consisting
of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the
interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited consolidated financial statements for year ended December 31, 2016 as reported in the Company's
Form 10-K have been omitted.
Use of Estimates
The preparation
of financial statements in accordance with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. A change in managements' estimates or assumptions could have a material impact on the Company's financial condition
and results of operations during the period in which such changes occurred.
Actual results
could differ from those estimates. The Company's financial statements reflect all adjustments that management believes are necessary
for the fair presentation of their financial condition and results of operations for the periods presented.
Cash and
Cash Equivalents
For purposes
of the statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months
or less which are not securing any corporate obligations. The Company maintains its cash in bank deposit accounts, which, at times,
may exceed federally insured limits. The Company has not experienced any losses in such accounts.
Property
and Equipment
Property and
equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments
that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. Depreciation
is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets. The estimated
useful lives of depreciable assets are:
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
Classification
|
|
|
Estimated
Useful Lives
|
Furniture
and fixtures
|
|
|
5-7
years
|
Computers
and office equipment
|
|
|
3-5
years
|
Revenue Recognition
The Company recognizes
revenue for its professional services and product sales when persuasive evidence of an arrangement exists, performance of services
has occurred or the product has been delivered, and the sales price is fixed or determinable and collectability is probable.
During the
nine months ended September 30, 2017 the Company did not earn any fees for consulting services or from commissions.
Impairment of Long-lived Assets
The Company reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable
based on the undiscounted future cash flows of the asset. If the carrying amount of the asset is determined not to be recoverable,
a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external
appraisals, as applicable. The Company reviews long-lived assets for impairment at the individual asset or the asset group level
for which the lowest level of independent cash flows can be identified. No impairment expense has been recorded on long-lived
assets for the nine months ended September 30, 2017.
Income Taxes
Income taxes
are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either
expire before the Company is able to realize their benefits, or that future deductibility is uncertain.
The
Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income
taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax
authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than
not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent
likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax
benefits was recorded as of September 30, 2017 or December 31, 2016.
Fair Value
Measurements
The fair value
of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial
liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy
is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within
the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair
value hierarchy is defined into the following three categories:
Level
1: Quoted market prices in active markets for identical assets or liabilities
Level
2: Observable market-based inputs or inputs that are corroborated by market data
Level
3: Unobservable inputs that are not corroborated by market data
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
Stock-Based
Compensation
The Company
records stock-based compensation at fair value as of the date of grant and recognizes the corresponding expense over the requisite
service period. Compensation expense is generally recognized on a straight line basis over the service period.
Loss per
Common Share
Basic earnings
per share are calculated dividing income available to common stockholders by the weighted average number of common shares outstanding.
Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were
converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, warrants and options are
assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby
were used to purchase common stock at the average market price during the period. There were 2,462,535
dilutive
shares outstanding as of September 30, 2017.
Research
and Development Costs
The Company
has and will continue to enter into participation contracts with third party entities that will require funding for the development
and production of various products. Each contract will be analyzed and reviewed based on its specific content, to determine
its specific disclosure with regard to ASC 350-30. The Company has reviewed the existing agreements and has determined that
it is not economically feasible, at this time, to determine, for any of the products being developed, the economic benefit to be
received, nor their future useful life and therefore has expensed $40,027 previous to the current nine months and $0, as research
and development costs, during the nine months ended September 30, 2017.
Recently
Adopted Accounting Pronouncements
The Company
has evaluated recent accounting pronouncements, through September 30, 2017, and believes that none are expected to have a material
effect on the Company's financial statements.
NOTE 3 – GOING CONCERN
The accompanying
financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability
of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged
substantially in financing activities, developing its business plan and marketing. As a result, the Company incurred accumulated
net losses through September 30, 2017 of $3,466,805. In addition, the Company's development activities since inception have been
financially sustained through the sale of capital stock and capital contributions from note holders.
The ability
of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common
stock or through debt financing and, ultimately, the achievement of significant operating revenues.
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.
NOTE 4 – PREPAID
EXPENSES
Prepaid
Expenses
During
the nine months ended September 30, 2017 the Company issued 580,000 shares and 500,000 warrants for prepaid expenses of $142,536
for
consulting services and are being amortized over the life of the contracts. As of September 30, 2017 and December 31, 2016, there
were prepaid expenses of $104,816 and $154,827, respectively.
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
NOTE 5 –
PROPERTY AND EQUIPMENT
Property and
equipment consisted of the following as of September 30, 2017 and December 31, 2016.
|
September
30, 2017
|
|
December
31, 2016
|
Computer
and office equipment
|
$
|
8,614
|
|
$
|
8,614
|
Less accumulated depreciation
|
|
(8,614)
|
|
|
(8,614)
|
Equipment-net
|
$
|
—
|
|
$
|
—
|
Depreciation
expense was $0 and $0 and $0 and $357 for three and nine months ended September 30, 2017 and 2016, respectively.
NOTE 6– CONVERTIBLE NOTES
PAYABLE
The components
of notes payable at September 30, 2017 and December 31, 2016 are summarized in the following tables.
|
September
30, 2017
|
|
December
31, 2016
|
Note Payable
- 5% interest, unsecured and due January 2013
|
|
25,000
|
|
|
—
|
Less: unamortized discount
|
|
(20,856)
|
|
|
—
|
Balance - September
30, 2017
|
$
|
4,144
|
|
$
|
—
|
On March 14,
2017 the Company issued a convertible promissory note in the amount of $25,000 with principal and interest due and payable on or
before January 1, 2019, bearing interest of 5% per annum and convertible into common shares at $0.1333 per share after 180 days,
at the holder's option. Due to the fact that the trading price of the Company's stock was less than the stated conversion
rate of the note, there was no beneficial conversion feature.
On
July 7, 2017 the Company issued a convertible promissory note in the amount of $25,000 with principal and interest due and payable
on or before January 1, 2019, bearing interest of 5% per annum and convertible into common shares at $0.1333 per share after 180
days, at the holder's option. Due to the fact that the trading price of the Company's stock was greater than the stated conversion
rate of the note, the Company calculated the effective conversion price of the note based on the relative fair value allocated
to the debt to determine the fair value of any beneficial conversion feature, in accordance with ASC 470-20-30. A discount
of $25,000 for the relative fair value for the warrant valued at $17,187 and the beneficial conversion feature valued at $7,813
was recorded against the note and will be amortized over the life of the note to interest expense. As of September 30, 2017 interest
expense of $4,144 was recorded as part of the amortization of the beneficial conversion feature of the notes.
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
NOTE 7 –
RELATED PARTY TRANSACTIONS
On February
29, 2016, the Company resolved to sell 600,000 post-split common shares to, each of, two individuals, for a total consideration
of $30,000 cash, which was received on March 3, 2016.
On March 10,
2016, the Board of Directors appointed Messrs. Jim Kiles and Paul Overby to the two vacant positions on the Company's Board of
Directors. Mr. Kiles was also appointed President and Chief Executive Officer in the place of Ashish Badjatia, who resigned
as President and CEO. Mr. Overby was appointed Chief Strategy Officer.
On June 3,
2016 the Company issued 7,249,999 of its common restricted shares to seven individuals for past services provided as directors,
officers and employees. The shares were recorded at a cost of $0.26, each, for a total cost of $1,885,000.
On April 1,
2016, the Board of Directors passed a resolution to pay Ashish Badjatia, a director and operating officer, $3,000 per month as
compensation for services to be rendered. On October 1, 2016 the Company entered into a new contract with Mr. Badjatia to
compensate him at the rate of $8,000 per month plus out of pocket expenses. Unpaid compensation under the later contract
is convertible, quarterly, into restricted common shares, at a cost of $0.1333 per share. On December 31, 2016, Mr. Badjatia
was owed, as a result of both contracts, a total of $36,000 in unpaid compensation. In addition, the Company owed Mr. Badjatia
$36,548, for accrued but unpaid consulting fees of $24,500 and $12,048 for a convertible note and accrued interest. On December
31, 2016 the Company and Mr. Badjatia agreed to cancel that debt and issue 73,096 common stock warrants to Mr. Badjatia to be exercised,
any time after thirty days but within five years from the date of issuance, at $0.50 per share.
On October
1, 2016 the Company entered into a consulting contract with James Kiles to compensate him at the rate of $8,000 per month plus
out of pocket expenses. Unpaid compensation under the consulting contract is convertible into restricted common shares quarterly
at the cost of $0.1333 per share. On January 1, 2016, per the consulting contract terms, the Company issued Mr. Kiles a convertible
note, which included unpaid compensation for the previous quarter of $24,000 plus out of pocket expenses of $17,385.
During the
year ended December 31, 2016
two directors and two affiliates were issued convertible
promissory notes repayable on or before January 1, 2019, bearing interest of 5% per annum and convertible into common shares at
a cost of $0.135 per share after 180 days, at the holder's option.
On
January 1, 2017 a director was issued a convertible promissory note, convertible at $0.13333 per share after 180 days at the
holder's option, bearing interest of 5% per annum, principal and interest due, in full if not paid sooner, on January 1, 2019,
in the amount of $41,385, of which $17,385 was to pay overhead items and $24,000 was to pay accrued salary owing under a consulting
agreement
.
On January
20, 2017 the Company issued, to a director, a $5,000 convertible promissory note to secure a cash advance, principal and interest
repayable on or before January 1, 2019, bearing interest of 5% per annum and convertible into common shares at a cost of $0.135
per share after 180 days, at the holder's option. Because the trading price of the Company's stock was less than the stated
conversion rate of the note, there was no beneficial conversion feature.
On
April 24, 2017 the Company issued 932,523 common shares to one director for conversion of notes payable and advance through March
31, 2017 amounting to $123,372.
On
July 27, 2017 the Company issued 77,665 of its common restricted shares to note holders in settlement of notes payable and accrued
interest amounting to $10,463
.
The components
of notes payable -related party at September 30, 2017 and December 31, 2016 are summarized in the following tables.
|
September
30, 2017
|
|
December
31, 2016
|
Related
party convertible notes payable - 5% interest;due January 1, 2019
|
$
|
3,500
|
|
$
|
24,796
|
Less: unamortized discount
|
|
—
|
|
|
(786)
|
Balance - September
30, 2017
|
$
|
3,500
|
|
$
|
23,420
|
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
NOTE
8 – STOCKHOLDERS' DEFICIT
The
total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of $0.001 per
share. There are no preferred shares authorized to be issued. There were 17,113,728 and 14,837,915 shares of post-split
common stock issued and outstanding at September 30, 2017 and December 31, 2016.
On
September 30, 2017, the Company's Board unanimously authorized the Company to buy back its own stock in the open market within
compliance of Rule 10b-18 of the US Securities and Exchange Commission, and authorizes these repurchases for a period of one year
commencing on October 1, 2018. As of the date of this filing the Company has not purchased any of it’s own stock.
On
March 3, 2016 the Company received a cash payment of $30,000, for the sale of 12,000,000 pre-reverse split shares at a cost of
$0.0025 per share or 1,200,000 post-reverse common shares, at a cost of $0.025 per share.
On
September 3, 2016, the Company issued 7,249,999 common restricted shares to seven individuals, officers and directors, to compensate
them for past services. The shares were recorded, based on the fair market value of the stock on that date, at $0.26 per
share for a total cost of $1,885,000.
On
September 3, 2016, the Company approved the issuance of 50,000 common restricted shares to a consultant for services provided
and to be provided. The shares were recorded, based on the fair market value of the stock on that date, at $0.26 per share,
for a total cost of $13,000.
On
September 30, 2016 the Company issued 25,000 common restricted shares to the same consultant for services rendered, based on the
fair market value of the stock on that date, at $0.1051 per share or a total cost of $2,628.
On
September 27, 2016 the Company issued 700,000 and 500,000 shares, respectively, to two consultants for services to be
provided, based on the fair market value of the stock on that date of $0.01 per share or a total cost of $12,000. The
700,000 common shares were recorded at $0.01 per share, based on the fair market value of the stock on September 27, 2016,
and were recorded as a prepaid expense, of $7,000, to be amortized, over the term of the contract. In addition, this
consultant will accrue $8,000 in fees with the consultant having the option to convert the accrued fees into 25,000 shares of
common stock each quarter. Similarly, the 500,000 common shares were valued at $0.01, based on the fair market value of
the stock on September 27, 2016, and were recorded as a prepaid expense, of $5,000, to be amortized, over the term of the
contract. The contracts contained a commitment to issue an additional 300,000 and 250,000 shares, respectively, by
September 30, 2017.
On
September 27, 2016 the Company also issued 105,000 common shares to seven consultants in return for the Company's right to utilize
the consultants' images and profiles in marketing and other materials to be disseminated from time to time. The shares were recorded
at a cost of $0.10 per share for a total cost of $10,500.
On
January 19, 2017 and March 27, 2017 the Company issued 30,000 and 10,000 restricted common shares pursuant to a consulting agreement,
recorded at a cost of $0.1281 and $0.17 per share for a total cost of $5,543.
On
February 6, 2017 the Company issued 15,000 common shares to one consultant in return for the Company's right to utilize the consultants'
images and profiles in marketing and other materials to be disseminated from time to time. The shares were recorded at a
cost of $0.1281 per share for a total cost of $1,922.
On
February 17, 2017 the Company issued 105,000 common shares to seven consultants in return for the Company's right to utilize the
consultants' images and profiles in marketing and other materials to be disseminated from time to time. The shares were
recorded at a cost of $0.1285 per share for a total cost of $13,493.
On
February 28, 2017 the Company issued 15,000 common shares to one consultant in return for the Company's right to utilize the consultants'
images and profiles in marketing and other materials to be disseminated from time to time. The shares were recorded at a
cost of $0.13 per share for a total cost of $1,950.
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
On March
26, 2017, the Company issued 10,000 common shares to a consultant for services rendered. Based on the fair market value
of the stock on that day the shares were recorded at a cost of $0.17 per share or a total cost of $1,700. As of September 30,
2017, the shares have not been issued and have been recorded as stock payable.
On March
31, 2017 the Company issued 550,000 common shares to two consultants as payment for their services. The shares were recorded
at a cost of $0.141 per share or a total of $77,000 and charged to prepaid expense, to be amortized over 42 months, which is the
remaining term of the consulting agreements.
On
April 24, 2017 the Company issued 150,000 common shares to one consultant as payment for their services. The shares
were recorded at a cost of $0.17 per share or a total of $25,485 and charged to prepaid expense, to be amortized over 42
months, which is the remaining term of the consulting agreements.
On
April 24, 2017 the Company issued 932,523 common shares to one director for conversion of notes payable and advance through March
31, 2017 amounting to $123,372.
On July
27, 2017 the Company issued 268,290 common shares to various note holders director for conversion of convertible notes payable
– related parties and advances amounting to $35,880.
On July
5, 2017, the Company issued 25,000 common shares to a consultant for services rendered valued as of the date of the agreement
at $5,500.
On July
17, 2017, the Company issued 100,000 common shares to a consultant for services rendered valued as of the date of the agreement
at $22,000.
On
September 20, 2017, the Company issued 100,000 common shares to a consultant for services rendered valued as of the date of the
agreement at $12,100
.
NOTE 9 – STOCK PURCHASE
WARRANTS
On
March 14, 2017, 500,000 warrants were issued, to a consultant, in consideration of consulting services to be provided during the
ensuing year
.
The value of these warrants of $64,986 have been recorded as prepaid expenses (See Note 4).
On
June 27, 2017, the Company granted stock warrants for 932,523 shares of common stock in association with a consulting agreement
with a director. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price
at the grant date was $0.20/share, the exercise price is $0.50/share, the value of the issuance is $186,276
.
YSTRATEGIES
CORP.
Notes
to Unaudited Financial Statements
September
30, 2017
(UNAUDITED
On July 27,
2017, the Company granted stock warrants for 47,656 shares of common stock in association with a the conversion of a convertible
note. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the
grant date was $0.18/share, the exercise price is $0.13333/share, the value of the issuance is $8,521.
In applying
the Black-Scholes options pricing model to the options and warrant grants, the fair value of our share-based awards granted were
estimated using the following assumptions for the periods indicated below:
|
September
30, 2017
|
Risk-free
interest rate
|
|
1.06
- 2.32%
|
Expected options life
|
|
5.00
|
Expected dividend yield
|
|
—
|
Expected price volatility
|
|
313-330.11%
|
A
summary of the status of the Company's stock options as of September 30, 2017 and changes during the nine months ended September
30, 2017 is presented below:
|
Number
of Warrants
|
Outstanding
at December 31, 2016
|
|
1,739,763
|
Warrants granted during
the nine months ended September 30, 2017
|
|
1,480,179
|
Warrants exercised
|
|
—
|
Warrants forfeited or expired
|
|
—
|
Outstanding at September 30, 2017
|
|
3,219,942
|
Exercisable at September 30, 2017
|
|
3,219,942
|
The following table
summarizes information about options and warrants as of September 30, 2017:
Warrants Outstanding
|
|
|
Warrants Exercisable
|
Exercise Price
|
|
|
Number Outstanding
|
|
|
Weighted Average Remaining Contractual Life (in years)
|
|
|
Weighted Average Exercise Price
|
|
|
Number Exercisable
|
|
|
Weighted Average Exercise Price
|
$
|
0.06
|
|
|
1,666,667
|
|
|
2.17
|
|
$
|
0.06
|
|
|
1,666,667
|
|
$
|
0.06
|
$
|
0.50
|
|
|
1,005,619
|
|
|
4.50
|
|
$
|
0.50
|
|
|
1,005,619
|
|
$
|
0.50
|
$
|
0.1333
|
|
|
547,656
|
|
|
4.64
|
|
$
|
0.1333
|
|
|
547,656
|
|
$
|
0.1333
|
Item 2 Management’s Discussion
and Analysis of Financial Condition and Results of Operations
The following discussion and analysis
of our financial condition and plan of operations should be read in conjunction with our unaudited interim financial statements
and related notes appearing elsewhere in this Quarterly Report. Various statements have been made in this Quarterly Report
on Form 10-Q that may constitute "forward-looking statements". Forward-looking statements may also be made
in our other reports filed with or furnished to the United States Securities and Exchange Commission (the "SEC") and
in other documents. In addition, through our management we may make oral forward-looking statements.
Forward-looking statements are subject
to risks and uncertainties which could cause actual results to differ materially from such statements. The words "believe,"
"expect," "anticipate," "optimistic," "intend," "plan," "aim," "will,"
"may," "should," "could," "would," "likely" and similar expressions are intended
to identify forward-looking statements. These statements are not guarantees of future performance, and therefore, you
should not put undue reliance upon them. Some of the statements that are forward-looking include: our ability to successfully
implement our business plan; our estimates of revenues and of other expenses associated with our operations; and our ability to
generate sufficient cash flows and maintain adequate sources of liquidity to finance our ongoing operations and capital expenditures. We
undertake no obligation to update or revise any forward-looking statements.
History and Overview
Ystrategies Corp., located in Pittsburgh
PA, was incorporated, on January 19, 2011, under the laws of the state of Nevada as India Ecommerce Corporation. On March
9, 2016, India Ecommerce Corporation completed a merger with its wholly owned subsidiary, Ystrategies Corp., a Nevada corporation,
which was incorporated solely to effect a change of name. As a result, the Company changed its name from India Ecommerce
Corporation to Ystrategies Corp. The Company has modified its business model to include the management of interests in technology
platforms and growth businesses with strong intellectual property positions.
Plan of Operations
Ystrategies
is in the business of managing interests in technology platforms and growth businesses with strong intellectual property positions.
The Company acquires these interests through partnership and investment. Ystrategies' business is based on recurring revenues from
technology platforms and sales of new energy efficiency and renewable energy products to businesses and consumers.
Ystrategies accelerates commercialization
for early stage businesses with significant development and strategy support, guidance and management. Our focus is long
term ownership positions in intellectual property driven businesses with strong technical leadership and proven, scalable value
for clearly identified customer segments. Our ideal investments drive aggressively to revenue through high quality strategic partner
driven sales with recurring revenue developed by a compelling intellectual property value proposition.
Intellectual Property
We currently have no patents or other
protection for our intellectual property, and will rely on copyrights, trademarks, and corporate secrecy for protection for the
foreseeable future.
Directors and Officers
Below are the names and certain information regarding our
executive officers and directors during the quarter ended September 30, 2017.
Name
|
Age
|
Position
|
James J. Kiles
|
64
|
Chief Executive Officer, President and Chairman
|
Ashish Badjatia
|
47
|
Chief Operating and Financial Officer, Secretary and Director
|
Paul I. Overby
|
60
|
Chief Strategy Officer and Director
|
There are no other directors or officers.
The biographies of each of the officer
and directors are listed below and contain information regarding the person's service as a director, business experience, public
company director positions currently held or held at any time during the last five years, information regarding involvement in
certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused
the Board to determine that the person should serve as a director in light of our business and structure.
Jim Kiles
is the Company's
President, Chief Executive and Financial Officer, Secretary and Director. He is responsible for driving investment, development
and strategic support for technology platforms. In this role, Jim helps start-ups validate markets, identify customers and
build value in business. Jim is a member of the Lawrence Livermore National Laboratory Industrial Advisory Board and an Instructor
for the Dept. of Energy's LabCorps program working with scientists from all 8 US National Labs in their efforts to commercialize
intellectual property targeting energy efficiency and renewable energy. Jim is the former Managing Director for Enabling
Technology Investments at Intel Capital (1995-2001- Akamai (IPO), Williams Communications (IPO), Digital Island (IPO), Sightpath
(Acquired-Cisco), Loudeye (IPO), Juno (IPO), iBeam (IPO-Acquired Williams), Convera (IPO); Investor and advisor to Angel Investors
LLC (1998-2004- Ask Jeeves, Loudeye, Google); Investor & Executive (Eyetide Media- CEO 2003-2008, Living Networks- CEO 2008-2011,
Visage Mobile VP Corp Dev 2011-2013, Cloudmark VP Strategy 2013, SAFE Managing Director 2011-2016, GroundControl Solutions 2015-2016). He
holds a BA and JD from Syracuse University.
Ashish Badjatia
is the
Company's Chief Operating and Financial Officer, Secretary and Director. In this role, he is responsible for the day-to-day
management of our Company, administrative functions, corporate filings and strategic evolution of its business. Ashish was the
founder & CEO of the India Ecommerce Company (IEEC- merged with YSTR in 2016) which developed internet software businesses
focused on integrated commerce opportunities between India and Indian communities in the US. He brings a stellar record of developing
and managing small public companies and 20 years of experience in various related activities, including social networking, international
trade, global investment banking, outsourcing, proposal management, and entrepreneurship. Included in those activities is a stint
as investment banking executive with Morgan Stanley in India. Ashish holds a Bachelor of Business Administration from the Williamson
School of Management at Youngstown State University, and a Master of International Affairs (International Business & Finance
and South Asian Affairs) from the School of International and Public Affairs at Columbia University.
Paul Overby
is the Company's
Chief Strategy Officer and Director. In this role, he provides strategic guidance to the Company. In addition, Paul serves
as the Honorary Consul of the Federal Republic of Germany in Pittsburgh and as President and Chairman of the Board of the Pittsburgh
Chapter of the German American Chamber of Commerce. He is also a strategist for Wabtec Corporation. A former U.S.
diplomat in the Middle East and executive in Bombardier's rail business, he is a start-up founder and early-stage investor. Paul
holds a BA from Yale University and a MBA from Harvard University.
Jim Kiles, Paul Overby and Ashish Badjatia
comprise the Board of Directors.
Employees and Consultants
On March 29, 2016 the Company signed
a consulting agreement with Neil Cohen, whereby Mr. Cohen, as Vice President of Marketing, will provide senior marketing and communications
consulting services. Mr. Cohen's compensation consists of 50,000 shares delivered subsequent to FINRA approval of the reverse
stock split, received on June 3, 2016, plus an additional 25,000 common restricted shares, to be delivered at the end of each
fiscal quarter commencing June 30, 2016. That contract was canceled on August 15, 2016 and replaced with a new one, dated
September 27, 2016 requiring the issuance of an additional 500,000 common restricted shares within 50 calendar days and 250,000
common restricted shares on or before March 31, 2017.
On June 10, 2016, the Company appointed
Robert Petchel the Senior Vice President of Project Development.
On September 27, 2016, the Company
signed a consulting agreement with Shirley Gee in the role of Venture Partner. In this role, Ms. Gee shall provide a broad range
of services with the intent to organize the internal structure and operations of the Company to facilitate larger levels of fundraising.
Ms. Gee's compensation in this role consists of 700,000 shares upon signing and an additional 300,000 shares at the end of 2017
Q1 contingent upon continuation of her role. In addition, consultant is to receive monthly compensation of $8,000 per month, commencing
at a, to be determined future date, deferred, and paid in full, when the Company secures funding of at least $750,000, at which
time the compensation shall increase to $12,000 per month, non-deferred. In any quarter, after the deferred compensation
has commenced, the consultant may elect to convert that quarter's unpaid compensation into 25,000 common restricted shares.
On April 23, 2017 Ms. Gee elected to convert the unpaid consulting fees and the Company issued, to her, 150,000 common shares.
On January 19, 2017 the Company entered
into a consulting agreement with Zachary Lebovitz to provide technology services as required thru March 25, 2017. The agreement
required compensation of 30,000 shares to be issued at the rate of 10,000 shares per month, was automatically renewable unless
otherwise canceled, for additional 10,000 common shares per month. The 30,000 shares were recorded at a cost of $0.1281 per share
for a total cost of $3,843 and the 10,000 renewal shares were recorded at a cost of $0.17 per share for a total cost of $1,700.
On March 14, 2017 the Company entered
into a one year consulting agreement, with Jon Sigerman, having an effective date of March 9, 2017 to compensate Mr. Sigerman
for services to be provided. Compensation is the issuance of a warrant, exercisable thirty days from the effective date,
to purchase up to 500,000 common shares of the Company at a cost of $0.13333 per share.
On May 17, 2017 the Company entered
into a consulting agreement with Joshua Pagonis to provide research analyst services as required thru September 30, 2017. The
agreement required compensation of 30,000 shares to be issued within 10 days after September 30, 2017.
Advisory Board
On September 27, 2016, the Company
formally created, and approved, a Science and Technology Advisory Board ("Advisory Board"). All of the Advisory Board
members serve for a period of one year at a cost of 15,000 common shares annually for each individual to serve in this role.
The purpose of the Advisory Board is
advisory only. The Advisory Board has no management or corporate governance responsibilities.
On September 27, 2016, six members
of this Advisory Board were approved to receive 15,000 shares of common stock each for serving in this role. This included
Dan Aronson, Kevin T. McLoughlin, Vi Rapp, Peter Therkelsen, Mike Tucker and Scott Wallace.
On December 31, 2016, Yurij Wowczuk
was approved to receive 15,000 shares of common stock for serving on this Advisory Board.
On February 17, 2017, the Company added
an additional eight members to the Advisory Board, also at a cost of 15,000 common shares for each individual. This included Mark
E. Avsec, Ben Bartlett, Lillian Chou, Del Christensen, Richard Samuelson, Mary Vincent, Jeff Weng, and Daniel Young.
Stock Buyback
On September 30, 2017, the Company's
Board unanimously authorized the Company to buy back its own stock in the open market within compliance of Rule 10b-18 of the
US Securities and Exchange Commission, and authorizes these repurchases for a period of one year commencing on October 1, 2017.
Subsidiaries
We do not currently have any subsidiaries.
Results of Operations for Three
and Nine Months Ended September 30, 2017 and 2016
The following discussion of the financial
condition and results of operations should be read in conjunction with the unaudited financial statements included herewith. This
discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that
any conclusion reached herein will necessarily be indicative of actual operating results in the future.
We
have generated minimal revenue from our core business model. During the three and nine months ended September 30, 2017,
we earned commissions of $0 from internet sales compared to $0 and $8,580 during the same three and nine months in 2016, respectively.
We
had
no consulting revenue during either three or nine month period. During the nine months ended September 30, 2017 and 2016, we recorded
cost of revenue of $0 and $3,966, respectively. Consulting contracts cover a variety of circumstances and needs and only become
available from potential clients on an "as needed" basis. No such contracts were entered into during the nine
months ended September 30, 2017 and 2016.
Our total operating expenses of $163,633
and $592,870 incurred during the three and nine months ended September 30, 2017 consisted of administrative and general costs
of $163,633 and $592,870, respectively. General and administrative expenses during the three and nine month period consisted primarily
of management and consulting fees of $135,166 and $282,502, respectively.
Total operating expenses during the
three and nine month period ended September 30, 2016 were $22,213 and $1,973,343, respectively, which consisted of General and
administrative expense of $22,213 and $1,973,343, respectively.
Interest
cost, due to additional notes and loans, for the three and nine months ended September 30, 2017 was $13, 934 and $49,352 compared
to $845 and $1,770 for the three and nine months ended September 30, 2016
.
During the nine months ended September 30, 2017 and 2016, the Company recorded a gain on settlement of accrued liabilities of
$27,000 and $0, respectively.
Liquidity and Capital Resources
Net cash used, by operating activities,
during the nine months ended September 30, 2017 was $53,334 compared to $39,625 for the nine months ended September 30, 2016.
Net cash used in operating activities was adjusted for common stock and warrants issued for service during the nine months ended
September 30, 2017 and 2016 of $253,435 and $1,901,677, respectively. he Company has stabilized its overhead while management
has provided the labor to create and develop the current projects.
Investing Activities
We did not use any cash resources for
investing activities during the nine months ended September 30, 2017 or 2016.
Financing Activities
During the nine months ended September
30, 2017 the Company generated $5,000 from the issuance of a convertible note to the Company Board Chairman and $50,000 from unrelated
investors. The Company sold common stock for $30,000 cash and received $10,000 from convertible notes payable during the nine
months ended September 30, 2016
Going Concern
Th
e
accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates
the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company
has been engaged substantially in financing activities, developing its business plan and marketing. As a result, the Company incurred
accumulated net losses through September 30, 2017 of $3,466,805. In addition, the Company's development activities since inception
have been financially sustained through the sale of capital stock and capital contributions from note holders.
These financial statements do not include
adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities
that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent upon
our ability to obtain additional financing or sale of its common stock and ultimately to attain profitability.
Management has adopted a new business
plan, which is to raise additional financing through a combination of equity and debt financing. Management believes this will
be sufficient to finance the continuing development for the next twelve months. However, there is no assurance that we will be
successful in raising such financing.
We currently do not have any other
arrangements for financing and we may not be able to obtain the financing required. Obtaining additional financing would be subject
to a number of factors, including our ability to attract investments prior to consistent revenue generation, and thereafter our
ability to grow our brand and for success in our market. We may also require additional financing to sustain our business
operations if we are not successful in earning significant revenues once our business plan is enacted.
Critical Accounting Policies
Our financial statements and related
public financial information are based on the application of accounting principles generally accepted in the United States ("GAAP").
GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an
impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information
contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe
our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We
base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant
estimates made during the preparation of our financial statements.
Our significant accounting policies
are summarized in Note 2 of our unaudited interim financial statements. While all these significant accounting policies impact
our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical
are those policies that have the most significant impact on our financial statements and require management to use a greater degree
of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our
results of operations, financial position or liquidity for the periods presented in this report.
We believe the following critical accounting
policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our unaudited
interim financial statements:
Cash and Cash Equivalents
For purposes of the statements of cash
flows, cash equivalents include all highly liquid investments with original maturities of three months or less which are not securing
any corporate obligations. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured
limits. The Company has not experienced any losses in such accounts.
Revenue Recognition
The Company recognizes revenue
for its professional services when persuasive evidence of an arrangement exists, performance of services has occurred, the sales
price is fixed or determinable and collectability is probable. During the three months ended September 30, 2017, the Company earned
$0 for product sales generated through the Amazon web site.
Website Development
We capitalize the costs associated
with the development of our website. Other costs related to the maintenance of the website are expensed as incurred. Amortization
will be provided over the estimated useful life of 3 years using the straight-line method for financial statement purposes.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet
arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose
entities" (SPEs).