FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
DRONE GUARDER, INC.
(Exact name of registrant as specified
in its charter)
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Nevada
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7363
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39-2079422
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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86-90 Paul Street
London, England EC2A 4NE
415-835-9463
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Spring Valley Solutions, LLC
4955 S. Durango Rd. Ste. 165.
Las Vegas, NV 89113
(702) 982-5686
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(Address, including zip code, and telephone number, including area code, of principal executive offices)
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(Name, address, including zip code, and telephone number, including area code, of agent for service)
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Approximate date of commencement of proposed sale to the
public:
From time to time after this registration
statement becomes effective.
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If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the
following box. [X]
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. [ ]
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting
company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☐
(Do not check if a smaller reporting company)
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Smaller reporting company
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☑
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Emerging growth company
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☑
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.
☑
CALCULATION OF REGISTRATION FEE
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Title of each class of
securities to be registered
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Amount to be
Registered(1)
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Proposed
Maximum
Offering Price
per Share(4)
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Proposed
Maximum
Aggregate
Offering Price
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Amount of
Registration Fee
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Common Stock, par value $0.001 per share
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42,500,000 (2)
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$0.0225
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$956,250
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$119.05
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Common Stock, par value $0.001 per share
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42,500,000(3)
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$0.0225
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$956,250
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$119.05
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Total
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85,000,000
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$0.0225
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$1,912,500
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$238.11
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(1)
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Represents shares of our common stock being registered for resale that have been issued or will be issued to the sole selling stockholder named in this registration statement. Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), the shares being registered hereunder include such indeterminate number of shares of our Common Stock as may be issuable with respect to the shares being registered hereunder to prevent dilution by reason of any stock dividend, stock split, recapitalization or other similar transaction.
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(2)
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Represents shares of common stock issuable upon conversion of 12% Convertible Promissory Notes by the selling stockholder named in this registration statement.
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(3)
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Represents shares of common stock issuable upon conversion of 12% Convertible Promissory Notes by the selling stockholder named in this registration statement.
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(4)
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Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act based upon the closing price per share of our Common Stock as reported on the OTCQB, on August 16, 2018.
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THE REGISTRANT HEREBY AMENDS THIS
REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
With copies to:
Scott Doney, Esq.
The Doney Law Firm
4955 S. Durango Rd. Ste 165
Las Vegas, NV 89113
Telephone: (702) 982-5686
The information in this prospectus
is not complete and may be changed. This prospectus is included in a registration statement that we filed with the Securities and
Exchange Commission. The Selling Shareholders cannot sell these securities under this registration statement until this registration
statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, dated August
28, 2018
PROSPECTUS
DRONE GUARDER, INC.
85,000,000 Shares of Common Stock
This prospectus relates to the registration
and resale of up to 85,000,000 shares of our common stock, par value $0.001 per share, by the selling stockholders EMA Financial,
LLC and Auctus Fund, LLC (the “Selling Stockholders”). The shares of common stock offered under this prospectus by
the Selling Stockholders are issuable, or may in the future become issuable, in connection with the conversion of convertible promissory
notes sold to the Selling Stockholders pursuant to securities purchase agreements between the Selling Stockholders and us (the
“Note Financings”).
We will pay all expenses of registering
the shares of common stock. We will not receive any proceeds from the sale of the common stock by the Selling Stockholders.
Our common stock is currently listed
on the OTC Markets OTCQB under the symbol “DRNG.” On August 16, 2018, the last reported sale price of our common stock
as reported on the OTCQB was $0.0225 per share.
The Selling Stockholders may sell the
shares of common stock described in this prospectus in a number of different ways and at varying prices. We provide more information
about how the Selling Stockholders may sell its respective shares of common stock in the section of this prospectus entitled “Plan
of Distribution.”
The Selling Stockholder may be deemed
to be an “underwriter” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”),
in connection with the resale of the common stock offered pursuant to this prospectus.
This investment involves a high
degree of risk. You should purchase shares of common stock only if you can afford a complete loss. See “Risk Factors”
beginning on page 9 to read about factors you should consider before investing in shares of our common stock.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus August
28, 2018
Table of Contents
Neither we nor the Selling Stockholders
have authorized any person to give you any supplemental information or to make any representations for us. You should not rely
upon any information about our company that is not contained in this prospectus. Information contained in this prospectus may become
stale. You should not assume that the information contained in this prospectus or any prospectus supplement is accurate as of any
date other than their respective dates, regardless of the time of delivery of this prospectus, any prospectus supplement or of
any sale of the shares. Our business, financial condition, results of operations and prospects may have changed since those dates.
The Selling Stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where
offers and sales are permitted.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement we filed with the Securities and Exchange Commission, or the SEC. Under this registration process, the Selling Stockholders
may, from time to time, offer and sell up to 85,000,000 shares of our common stock, as described in this prospectus, in one or
more offerings. This prospectus provides you with a general description of the securities the selling shareholders may offer. You
should read this prospectus carefully before making an investment decision.
You may only rely on the information
contained in this prospectus or that we have referred you to. We have not authorized anyone to provide you with additional or different
information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than
the shares of our common stock offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any common stock in any circumstances or any jurisdiction in which such offer or solicitation is not permitted.
You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front
cover of this prospectus regardless of the time of delivery of this prospectus or any sale of our common stock. The rules of the
SEC may require us to update this prospectus in the future.
As used in this prospectus, unless the
context requires otherwise, the terms “we”, “us”, “our”, or “the Company” refer
to Drone Guarder, Inc. and its subsidiaries on a consolidated basis. References to “Selling Stockholders” refers to
EMA Financial, LLC and its successors, assignees and permitted transferees.
ABOUT FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus
are “forward-looking statements.” These forward-looking statements involve certain known and unknown risks, uncertainties
and other factors which may cause our actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the
factors set forth above under “Risk Factors”. The words “believe,” “expect,” “anticipate,”
“intend,” “plan,” and similar expressions identify forward-looking statements. We caution you not to place
undue reliance on these forward-looking statements. We undertake no obligation to update and revise any forward-looking statements
or to publicly announce the result of any revisions to any of the forward-looking statements in this document to reflect any future
developments.
Our businesses and operations are and
will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially
differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that could cause actual
results and experience to differ from those projected include, but are not limited to, the risk factors set forth in the section
entitled “Risk Factors” beginning on page 9 of this prospectus.
All written or oral forward-looking
statements attributable to us or any person acting on our behalf made after the date of this prospectus are expressly qualified
in their entirety by the risk factors and cautionary statements contained in and incorporated by reference into this prospectus.
Unless legally required, we do not undertake any obligation to release publicly any revisions to such forward-looking statements
to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.
SUMMARY
The following summary highlights
selected information contained elsewhere in this prospectus and in the documents incorporated by reference in this prospectus and
does not contain all the information you will need in making your investment decision. You should read carefully this entire prospectus
and the documents incorporated by reference in this prospectus before making an investment decision, especially the information
presented under the heading “Risk Factors.”
Business Summary
We are an early stage security and surveillance
company focusing on commercializing a drone enhanced home security system as a turnkey solution. The solution is app-based and
includes a drone, infrared camera, and Android mobile app component: once an alarm has been triggered, the DroneGuarder™
will immediately take off from a wireless charging pad. The camera within the drone will record video for a few seconds, process
it and then send an alert if a threat is found, which the DroneGuarder™ app sends in the form of a text, image or short recorded
video if supported by the GSM network. The DroneGuarder™ can fly for up to 20 minutes, using GPS to navigate in its preprogrammed
areas and return back to its charging pad after completing surveillance.
Once an alarm has been triggered the
drone will instantly leave its charging pad and fly to the destination where the alarm was activated, or any other predefined destination
programmed for the specific alarm. The infrared (IR) camera will recognize any human movement night or day, and stream it directly
to the smartphone that is connected to the drone when the app is open and the user is on that screen, recording all activity. On
this drone and all drones from DJI, simultaneous action is not possible. The video must end before the phone can do other things.
This is because if the video goes into the background, the video will stop and the drone will immediately return. All homes or
businesses are great candidates for the drone alarm system as it is compatible with standard surveillance cameras and movement
detectors. Each sensors GPS position has been registered in the drone with a smartphone, so it knows exactly where to go.
The solution is expected to come as
a packaged solution that can be tailored to fit the requirements of an individual security installation company and will be sold
to U.S. based companies that provide security solutions for private homes, gated communities and construction sites. The solution
is designed to be flexible enough to integrate into all existing security solutions that a gated community or private home might
already have, as well incorporate add-ons with extra features if needed. The targeted markets include the USA, Canada, Europe,
South Africa and the Asia-Pacific region.
Our primary revenue model is expected
to consist of selling home security systems directly to the clients (e.g. homes, business, or security resellers). We plan to focus
on selling to resellers, as it enables the Company to reach the widest customer base for the lowest cost. Our secondary business
model is expected to be leasing home security systems for a monthly flat fee and pre-selling discounted first-versions of the product.
We plan to develop our own software and acquire the hardware needed from a third party in an attempt to lower expenses.
We have recently decided to pursue an
agreement with a Chinese company to develop our drone hardware. We expect this agreement to be completed in the coming weeks. This
will delay our final prototype, but we have completed the AI portion of the system. In addition, our new App is expected to be
launched in June 2018.
The App is a key component of our security
solution with our proprietary functionality built into the App controlled by a customer’s iPhone or iPad. The performance
includes “Patrol” where a customer clicks the Patrol button on the App and the drone autonomously patrols the entire
grid of the customer’s property using pre-designated GEO Fencing GPS weigh points that stream a real-time video feed back
to the phone or tablet via the App.
Our new App will have a function called
“Go Home” where at any time a customer can call the drone back to its home wireless charging base, normally located
on the roof of the home or business. Additionally, we have a live weather function on the App and other abilities that are all
part of the Drone Guarder App platform.
Note Financings
EMA Financial, LLC
On May 8, 2018 we entered into a Securities
Purchase Agreement (“ EMA SPA”) with EMA Financial, LLC, a Delaware limited liability company, pursuant to which we
issued and sold to EMA a convertible promissory note, dated May 8, 2018 in the principal amount of $125,000 (the “EMA Note”).
In connection with the foregoing, we also entered into a registration rights agreement with EMA dated May 10, 2018 (the “EMA
Registration Rights Agreement”).
The EMA Note, which is due on February
8, 2019, bears interest at the rate of 12% per annum. All principal and accrued interest on the Note is convertible into shares
of our common stock at the election of EMA at any time at a conversion price equal to the lesser of (i) the trading price for our
common stock on the trading day prior to the closing date of the EMA Note, or (ii) a 50% discount to the lowest trading or lowest
closing bid price for our common stock during the 25 trading day period immediately prior to conversion, whichever is lower.
We have the right to prepay the EMA
Note within 90 days of the closing date at a premium of 135% of all amounts owed to EMA and at a premium of 150% if prepaid more
than 90 but less than 180 days following the closing date. We have no right to prepay the Note more than 180 days after the closing
date.
The EMA Note contains customary default
events which, if triggered and not timely cured, will result in default interest and penalties. The EMA Note also contains a right
of first refusal provision with respect to future financings by us. Pursuant to the EMA Registration Rights Agreement, we are required
to register the shares into which the EMA Note is converted. We must file the registration statement within 10 days of the closing
date and have it declared effective within 90 days of the closing date.
If the EMA Note is converted prior to
us paying off such notes under the prepayment provisions, it would lead to substantial dilution to our shareholders as a result
of the conversion discounted for the EMA Note. There can be no assurance that there will be any funds available to pay of the EMA
Note, or if available, on terms that will be acceptable to us or our shareholders. If we fails to obtain such additional financing
on a timely basis, EMA may convert the EMA Note and sell the underlying shares, which may result in significant dilution to shareholders
due to the conversion discount, as well as a significant decrease in our stock price.
Auctus Fund, LLC
On May 10, 2018, we entered into a Securities
Purchase Agreement (the “Auctus SPA”), under which we agreed to sell a 12% convertible promissory note in an aggregate
principal amount of $165,000.00 (the “Auctus Note”) to Auctus Fund, LLC (“Auctus”). The Auctus Note will
bear interest at a rate of 12% per annum and will mature on February 10, 2018. The net proceeds of the sale of the Auctus Note,
after deducting the expenses payable by us, were $162,500. In connection with the foregoing, we also entered into a registration
rights agreement with Auctus dated May 10, 2018 (the “Auctus Registration Rights Agreement”).
At any time after the issue date of
the Auctus Note, Auctus has the option to convert all or any part of the outstanding and unpaid principal amount and accrued and
unpaid interest of the Auctus Note into shares of our common stock at the Conversion Price. The “Conversion Price”
will be the lesser of (i) the lowest trading price of our common stock during the twenty-five-day trading period prior to the issue
date of the Auctus Note and (ii) 50% of the lowest trading price or closing bid price of our common stock during the twenty-five-day
trading period prior to the conversion. The Conversion Price is subject to further reduction upon certain events specified in the
Auctus Note.
We have the right to prepay the Auctus
Note at any time until the 180th calendar day after the issue date of the Auctus Note, in an amount equal to 150% (or 135% if we
prepay the Auctus Note on or before the date that is 90 days after the issue date of the Auctus Note) of the outstanding balance
of the Auctus Note (including principal and accrued and unpaid interest). We may not prepay the Auctus Note after the 180th calendar
day after the issue date of the Auctus Note. We will be subject to a liquidated damages charge of 25% of the outstanding principal
amount of the Auctus Note if we effect certain exchange transactions in accordance with, based upon or related or pursuant to Section
3(a)(10) of the Securities Act.
The Auctus Note contains customary default
events which, if triggered and not timely cured, will result in default interest and penalties. The Auctus Note also contains a
right of first refusal provision with respect to future financings by us. Pursuant to the Auctus Registration Rights Agreement,
we are required to register the shares into which the Auctus Note is convertible into. We must file the registration statement
within 10 days of the closing date and have it declared effective within 90 days of the closing date.
If the Auctus Note is converted prior
to us paying off such notes under the prepayment provisions, it would lead to substantial dilution to our shareholders as a result
of the conversion discounted for the Auctus Note. There can be no assurance that there will be any funds available to pay of the
Auctus Note, or if available, on terms that will be acceptable to us or our shareholders. If we fails to obtain such additional
financing on a timely basis, Auctus may convert the Auctus Note and sell the underlying shares, which may result in significant
dilution to shareholders due to the conversion discount, as well as a significant decrease in our stock price.
The Offering
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Common stock offered by the Selling Shareholders
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Up to 85,000,000 shares of common stock.
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Selling Stockholders
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EMA Financial, LLC and Auctus Fund, LLC See “Selling Stockholders.”
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Common stock outstanding
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134,100,000 common shares as of August 28, 2018.
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Use of proceeds
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We will not receive any proceeds from the sale or other disposition of the shares of common stock covered by this prospectus. See “Use of Proceeds”
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OTCQB Symbol
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Our Common Stock is quoted on the OTCQB under the ticker symbol “DRNG”.
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Risk Factors
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You should consider
the matters set forth under “
Risk Factors
” beginning on page 9, as well as other cautionary statements
throughout or incorporated by reference in this prospectus, before deciding to invest in shares of our common stock.
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Summary Financial Information
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Balance Sheet Data
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January 31, 2018
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January 31, 2017
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April 30, 2018
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Cash
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$
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19,525
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$
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2,726
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$
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53,425
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Total Assets
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$
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97,658
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$
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2,944
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$
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296,302
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Liabilities
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$
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805,973
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$
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105,763
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$
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1,487,102
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Total Stockholders’ Deficit
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$
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(708,315
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)
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$
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(102,819
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)
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$
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(1,190,800)
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Statement of Operations
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Year Ended January 31, 2018
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Year Ended January 31, 2017
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Three Months Ended April 30, 2018
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Three Months Ended April 30, 2017
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Revenue
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$
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—
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$
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—
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$
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—
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$
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—
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Income (Loss) for the Period
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$
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(662,996
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)
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$
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(47,907
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)
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$
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(482,485
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)
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$
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(44,240)
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RISK FACTORS
Readers and prospective investors
in our common stock should carefully consider the following risk factors as well as the other information contained or incorporated
by reference in this prospectus.
If any of the following risks actually
occurs, our financial condition, results of operations and liquidity could be materially adversely affected. If this were to happen,
the value of our common stock could decline, and if you invest in our common stock, you could lose all or part of your investment.
The discussion below highlights some
important risks we have identified related to our business and operations and an investment in shares of our common stock, but
these should not be assumed to be the only factors that could affect our future performance and condition, financial and otherwise.
We do not have a policy of updating or revising forward-looking statements except as otherwise required by law, and silence by
management over time should not be construed to mean that actual events are occurring as estimated in such forward-looking statements.
Risks Relating to Our Financial Position,
Our Need for Additional Capital and Our Business
We have not generated any significant
third party external revenue to date, and we anticipate that we will incur losses for the foreseeable future.
We may not generate the cash that is necessary
to finance our operations in the foreseeable future. We have not generated any significant third party external revenues to date.
We expect to continue to incur substantial losses for the foreseeable future as we complete development of our product prototype
and website.
We will require additional capital to
fund our operations, and if we are unable to obtain such capital, we will be unable to successfully develop and commercialize our
drone enhanced home security system.
We anticipate that we will require additional
capital in the future in order to continue the research and development of our drone security system. Our future capital requirements
will depend on many factors that are currently unknown to us, including, without limitation: the timing of progress, results and
costs of our product development; the costs of product manufacturing and of establishing commercial manufacturing arrangements;
the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related
claims; our ability to establish research collaborations, strategic collaborations, licensing or other arrangements; the costs
to satisfy our obligations under potential future collaborations; and the timing, receipt, and amount of revenues or royalties,
if any, from any approved products.
We have based our expectations relating to
liquidity and capital resources on assumptions that may prove to be wrong, and we could use our available capital resources sooner
than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization
of our products, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing
the development of our current products.
In order to develop and obtain regulatory approval
for our products we will need to raise substantial additional funds. We expect to raise any such additional funds through public
or private equity or debt financings, collaborative agreements with corporate partners or other arrangements. Additional funds
may not be available when we need them on terms that are acceptable to us, or at all. General market conditions may make it very
difficult for us to seek financing from the capital markets. If we raise additional funds by issuing equity securities, substantial
dilution to existing shareholders would result. If we raise additional funds by incurring debt financing, the terms of the debt
may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability
to operate our business. We may be required to relinquish rights to our technologies or drones or grant licenses on terms that
are not favorable to us in order to raise additional funds through strategic alliances, joint ventures or licensing arrangements.
If adequate funds are not available on a timely
basis, we may be required to: terminate or delay testing or other development for our products; delay arrangements for activities
that may be necessary to commercialize our products; or cease operations.
In addition, if we do not meet our payment
obligations to third parties as they come due, we may be subject to litigation claims. Even if we are successful in defending against
these claims, litigation could result in substantial costs and distract management, and may have unfavourable results that could
further adversely impact our financial condition.
Risks Related to the Development and Regulatory
Approval of Products
Our success largely depends on the success
of our drone prototype development, which is at an early stage.
The success of our business depends substantially
upon our ability to develop, obtain regulatory approval for and commercialize our drones successfully. Our research and development
programs are prone to the significant and likely risks of failure inherent in product development. We intend to continue to invest
most of our time and financial resources in our research and development programs.
Before obtaining regulatory approvals for the
commercial sale of any drone product for a target indication, we must demonstrate with substantial evidence gathered in well-controlled
product trials, and, with respect to approval in the United States, to the satisfaction of the Federal Aviation Administration,
or FAA, or, with respect to approval in other countries, similar regulatory authorities in those countries, that the product is
safe and effective for use for that target indication. Satisfaction of these and other regulatory requirements is costly, time
consuming, uncertain, and subject to unanticipated delays. Despite our efforts, our products may not: offer improvement over existing,
comparable products; be proven safe and effective in product trials; or meet applicable regulatory standards.
Furthermore, we have not marketed, distributed
or sold any products. Our success will, in addition to the factors discussed above, depend on the successful commercialization
of our products, which may require: obtaining and maintain commercial manufacturing arrangements with third-party manufacturers;
or collaborating with security companies or contract sales organizations to market and sell any approved product.
Many of these factors are beyond our control.
We do not expect any of our products to be commercially available for several months. Accordingly, we do not anticipate generating
revenues from the sale of products in the near- or medium-term.
If trials of our products are prolonged,
delayed, suspended or terminated, we may be unable to commercialize our products on a timely basis, which would require us to incur
additional costs and delay our receipt of any revenue from potential product sales.
We cannot predict whether we will encounter
problems with our product trials or any future trials that will cause us or any regulatory authority to delay or suspend those
trials or delay the analysis of data derived from them. A number of events, including any of the following, could delay the completion
of our planned product trials and negatively impact our ability to obtain regulatory approval for, and to market and sell, a particular
product: conditions imposed us on us by the Federal Aviation Authority (FAA) or any foreign regulatory authority regarding the
scope or design of our product trials; delays in obtaining, or our inability to obtain, required approvals from institutional review
boards, or IRBs, or other reviewing entities at clinical sites selected for participation in our clinical trials; insufficient
supply or deficient quality of our products or other materials necessary to conduct our trials; failure of our third-party contractors
to meet their contractual obligations to us in a timely manner.
The regulatory approval processes of
the FAA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable
to obtain regulatory approval for our products, our business will be substantially harmed.
The time required to obtain approval by the
FAA and comparable foreign authorities is inherently unpredictable and depends upon numerous factors, including the substantial
discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of research data
necessary to gain approval may change during the course of a product’s development and may vary among jurisdictions. We have
not obtained regulatory approval for any products and it is possible that none of our existing products or any products we may
seek to develop in the future will ever obtain regulatory approval.
Our products could fail to receive regulatory
approval for many reasons, including the following: the FAA or comparable foreign regulatory authorities may disagree with the
design or implementation of our product trials; we may be unable to demonstrate to the satisfaction of the FAA or comparable foreign
regulatory authorities that a product is safe and effective for its proposed indication; we may be unable to demonstrate that a
product’s security and other benefits outweigh its safety risks; the FAA or comparable foreign regulatory authorities may
disagree with our interpretation of data from studies or trials; the FAA or comparable foreign regulatory authorities may fail
to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for commercial supplies;
or the approval policies or regulations of the FAA or comparable foreign regulatory authorities may significantly change in a manner
rendering our research data insufficient for approval.
Even if our products receive regulatory
approval in the United States, we may never receive approval or commercialize our products outside of the United States.
In order to market any products outside of
the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding
safety and efficacy. Approval procedures vary among countries and can involve additional product testing and additional administrative
review periods. The time required to obtain approval in other countries might differ from that required to obtain FAA approval.
The regulatory approval process in other countries may include all of the risks detailed above regarding FAA approval in the United
States as well as other risks. Regulatory approval in one country does not ensure regulatory approval in another, but a failure
or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. Failure
to obtain regulatory approval in other countries or any delay or setback in obtaining such approval would impair our ability to
develop foreign markets for our products.
Both before and after marketing approval,
our drones are subject to ongoing regulatory requirements and continued regulatory review, and if we fail to comply with these
continuing requirements, we could be subject to a variety of sanctions and the sale of any approved products could be suspended.
Any regulatory approvals that we receive for
our drones may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions
of approval, or contain requirements for potentially costly post-marketing testing, including product trials, and surveillance
to monitor the safety and efficacy of the product. Later discovery of previously unknown problems with a product, including adverse
events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to
comply with the regulatory requirements of the FAA and other applicable U.S. and foreign regulatory authorities could subject us
to administrative or judicially imposed sanctions, including: restrictions on the marketing of our products or their manufacturing
processes; warning letters; civil or criminal penalties; fines; injunctions; product seizures or detentions; import or export bans;
voluntary or mandatory product recalls and related publicity requirements; suspension or withdrawal of regulatory approvals; total
or partial suspension of production; and refusal to approve pending applications for marketing approval of new products or supplements
to approved applications.
The FAA’s policies may change and additional
government regulations may be enacted that could prevent, limit or delay regulatory approval of our drones. If we are slow or unable
to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain
regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business,
prospects and ability to achieve or sustain profitability.
Risks Related to the Commercialization of
Our Drones
Even if any of our drones receive regulatory
approval, if such approved product does not achieve broad market acceptance, the revenues that we generate from sales of the product
will be limited.
Even if any product we may develop or acquire
in the future obtain regulatory approval, they may not gain broad market acceptance among security and surveillance companies and
users. Consequently, even if we discover, develop and commercialize a product, the product may fail to achieve broad market acceptance
and we may not be able to generate significant revenue from the product.
If we are unable to establish sales and
marketing capabilities or enter into agreements with third parties to market and sell an approved product, we may be unable to
generate product revenue.
We do not currently have an organization for
the sales, marketing and distribution of our products. In order to market any products that may be approved by the FAA, we must
build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform
these services. If we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or
with third parties, we may not be able to generate product revenue and may not become profitable.
The markets for our products are subject
to intense competition. If we are unable to compete effectively, our products may be rendered noncompetitive or obsolete
.
We will face competition with respect to all
products we may develop or commercialize in the future from security and surveillance companies worldwide. The key factors affecting
the success of any approved product will be its indication, label, efficacy, safety profile, method of administration, pricing,
and level of promotional activity relative to those of competing drones.
Furthermore, many large security and surveillance
companies, academic institutions, governmental agencies and other public and private research organizations are pursuing the development
of novel drones that target the same indications we are targeting with our research and development program. We face, and expect
to continue to face, intense and increasing competition as new products enter the market and advanced technologies become available.
If a successful product liability claim
or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, we could incur substantial
liability.
The use of our products in product trials and
the sale of any products for which we obtain marketing approval will expose us to the risk of product liability claims. Product
liability claims might be brought against us by consumers, security and surveillance providers or others selling or otherwise coming
into contact with our products. If we cannot successfully defend ourselves against product liability claims, we could incur substantial
liabilities. In addition, regardless of merit or eventual outcome, product liability claims may result in: decreased demand for
any approved products; impairment of our business reputation; costs of related litigation; distraction of management’s attention;
substantial monetary awards to patients or other claimants; loss of revenues; and the inability to successfully commercialize any
approved products.
If our customers’ security systems
are breached by cyber hackers, we could lose consumer trust and incur substantial liability.
Our drone enhanced security systems may be
vulnerable to security breaches from cyber hackers, which may expose us to risk of liability claims as well as result in: decreased
demand for our products; impairment of our business reputation; costs of related litigation; distraction of management’s
attention; substantial monetary awards to patients or other claimants; loss of revenues; and the inability to successfully commercialize
any approved products.
Our customers must obtain approval from
local U.S. police in order to fly our drones; failure to do so could damage the reputation of the Company.
In order to fly drones over a certain area
in the U.S., consumers must contact their local police department and obtain approval to do so. If the user fails to do this and
is consequently reprimanded, it may damage the Company’s reputation and a decline in demand for our products; loss of revenues;
distraction of management’s attention; and the inability to successfully commercialize our products.
Risks Related to Our Dependence on Third
Parties
We have no manufacturing capacity and
depend on a third-party manufacturer to produce our products.
We do not currently operate manufacturing facilities
for production of any of our drones. We have no experience in drone manufacturing, and we lack the resources and the capabilities
to manufacture any of our drones on a commercial scale. As a result, we rely on a single third-party manufacturer to supply, store,
and distribute supply of our products, and plan to continue to do so for the foreseeable future.
Our drones require precise, high quality manufacturing.
Failure by our contract manufacturer to achieve and maintain high manufacturing standards could result in patient injury or death,
product recalls or withdrawals, delays or failures in testing or delivery, cost overruns, or other problems that could seriously
hurt our business. Contract manufacturers may encounter difficulties involving production yields, quality control, and quality
assurance. These manufacturers are subject to ongoing periodic and unannounced inspections by the FAA and corresponding state and
foreign agencies to ensure strict compliance with all applicable government regulations and corresponding foreign standards; however,
we do not have control over third-party manufacturers’ compliance with these regulations and standards.
We anticipate continued reliance on third-party
manufacturers if we are successful in obtaining marketing approval from the FAA and other regulatory agencies for any of our products,
and our commercialization of any of our products may be halted, delayed or made less profitable if those third parties fail to
obtain such approvals, fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or
prices.
If the FAA or other regulatory agencies approve
any of our products for commercial sale, we expect that we would continue to rely, at least initially, on third-party manufacturers
to produce commercial quantities of approved products. These manufacturers may not be able to successfully increase the manufacturing
capacity for any approved products in a timely or economic manner, or at all. Significant scale-up of manufacturing may require
additional validation studies, which the FAA must review and approve.
We depend on third-party suppliers for
key raw materials used in our manufacturing processes, and the loss of these third-party suppliers or their inability to supply
us with adequate raw materials could harm our business.
We rely on third-party suppliers for the raw
materials required for the production of our drones. Our dependence on these third-party suppliers and the challenges we may face
in obtaining adequate supplies of raw materials involve several risks, including limited control over pricing, availability, quality
and delivery schedules. We cannot be certain that our suppliers will continue to provide us with the quantities of these raw materials
that we require or satisfy our anticipated specifications and quality requirements. Any supply interruption in limited or sole
sourced raw materials could materially harm our ability to manufacture our products until a new source of supply, if any, could
be identified and qualified. Although we believe there are currently several other suppliers of these raw materials, we may be
unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms.
Risks Related to Our Intellectual Property
If we are unable to adequately protect
or enforce the intellectual property relating to our products, our ability to successfully commercialize our products will be harmed.
Our success depends in part on our ability
to protect our products from unauthorized or infringing use by third parties both in the United States and in other countries.
Due to evolving legal standards relating to the patentability, validity and enforceability of patents, rights under any issued
patents on existing technological features of our drones may not provide us with sufficient protection for our products or provide
sufficient protection to afford us a commercial advantage against competitive products or processes.
In the event that a third party has also filed
a U.S. patent application relating to our products or a similar invention, we may have to participate in interference or derivation
proceedings declared by the USPTO to determine priority of invention in the United States. The costs of these proceedings could
be substantial and it is possible that our efforts would be unsuccessful, resulting in a loss of our U.S. patent position. Furthermore,
we may not have identified all U.S. and foreign patents or published applications that affect our business either by blocking our
ability to commercialize our drones or by covering similar technologies.
We may be subject to a third-party pre-issuance
submission of prior art to the U.S. Patent and Trademark Office, or become involved in opposition, derivation, reexamination, inter
partes review, post-grant review, or other patent office proceedings or litigation, in the United States or elsewhere, challenging
our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could
reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete
directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing
third party patent rights.
We may not be able to protect our intellectual
property rights throughout the world.
The laws of some foreign jurisdictions do not
protect intellectual property rights to the same extent as in the United States and many companies have encountered significant
difficulties in protecting and defending such rights in foreign jurisdictions. If we encounter such difficulties in protecting
or are otherwise precluded from effectively protecting our intellectual property rights in foreign jurisdictions, our business
prospects could be substantially harmed.
Litigation regarding patents, patent
applications and other proprietary rights may be expensive and time consuming. If we are involved in such litigation, it could
cause delays in bringing products to market and harm our ability to operate.
Our success will depend in part on our ability
to operate without infringing the proprietary rights of third parties. Other parties may hold or obtain patents in the future and
allege that the use of our technologies infringes these patent claims or that we are employing their proprietary technology without
authorization.
In addition, third parties may challenge or
infringe upon our existing or future patents. Proceedings involving our patents or patent applications or those of others could
result in adverse decisions regarding: the patentability of our inventions relating to our products; and/or the enforceability,
validity or scope of protection offered by patents relating to our products.
Even if we are successful in these proceedings,
we may incur substantial costs and divert management time and attention in pursuing these proceedings, which could have a material
adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, defend
an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may
not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop
or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid,
we may: incur substantial monetary damages; encounter significant delays in bringing our products to market; and/or be precluded
from participating in the manufacture, use or sale of our products.
If our trademarks and trade names are
not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be
adversely affected.
Our registered or unregistered trademarks or
trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may
not be able to protect our rights to these trademarks and trade names, which we need to build name recognition by potential partners
or customers in our markets of interest. Over the long term, if we are unable to establish name recognition based on our trademarks
and trade names, then we may not be able to compete effectively and our business may be adversely affected.
We may be unable to adequately prevent
disclosure of trade secrets and other proprietary information.
We rely on trade secrets to protect our proprietary
technologies, especially where we do not believe patent protection is appropriate or obtainable; however, trade secrets are difficult
to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored
researchers, and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively
prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of
confidential information. In addition, others may independently discover our trade secrets and proprietary information. Costly
and time consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain
or maintain trade secret protection could adversely affect our competitive business position.
If we are unable to maintain effective
internal controls, our business, financial position and results of operations could be adversely affected.
We are subject to the reporting and other obligations
under the Securities Exchange Act of 1934, as amended, or the Exchange Act, including the requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, which require annual management assessments of the effectiveness of our internal control over financial reporting.
However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting
pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the Jumpstart Our Business
Startups Act, or the JOBS Act, if we continue to take advantage of the exemptions available to us through the JOBS Act.
The rules governing the standards that must
be met for management to assess our internal control over financial reporting are complex and require significant documentation,
testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management
may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley
Act of 2002. These reporting and other obligations place significant demands on our management and administrative and operational
resources, including accounting resources.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements
for external purposes in accordance with accounting principles generally accepted in the United States. Any failure to maintain
effective internal controls could have an adverse effect on our business, financial position and results of operations.
For as long as we are an emerging growth
company, we will be exempt from certain reporting requirements, including those relating to accounting standards and disclosure
about our executive compensation, that apply to other public companies.
We are classified as an emerging growth company,
which is defined as a company with annual gross revenues of less than $1 billion, that has been a public reporting company for
a period of less than five years, and that does not have a public float of $700 million or more in securities held by non-affiliated
holders. For as long as we are an emerging growth company, unlike other public companies, we are eligible to take advantage of
certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies.” These include, but are not limited to, (i) reduced obligations with respect to the disclosure of selected
financial data in registration statements filed with the SEC, (ii) reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, (iii) an exception from compliance with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act of 2002, and (iv) exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and the requirement to obtain shareholder approval of any golden parachute payments not previously approved.
As noted above, under the JOBS Act, emerging
growth companies can delay adopting new or revised accounting standards that have different effective dates for public and private
companies until such time as those standards apply to private companies. We intend to take advantage of such extended transition
period. Since we would then not be required to comply with new or revised accounting standards on the relevant dates on which adoption
of such standards is required for other public companies, our financial statements may not be comparable to the financial statements
of companies that comply with public company effective dates. If we were to elect to comply with these public company effective
dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act.
Risks Relating to Our Securities
If a market for our common stock
does not develop, shareholders may be unable to sell their shares.
Our common stock is quoted under the
symbol “DRNG” on the OTCQB operated by OTC Markets Group, Inc., an electronic inter-dealer quotation medium for equity
securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market
will develop or, if developed, that it will be sustained.
Our securities are very thinly traded.
Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless
we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major
fluctuations in the price of the stock.
Because we are subject to the
“Penny Stock” rules, the level of trading activity in our stock may be reduced.
The Securities and Exchange Commission
has adopted regulations which generally define "penny stock" to be any listed, trading equity security that has a market
price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer
must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the
customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the
broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive
the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level
of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty
Purchasers may experience in attempting to liquidate such securities.
We do not expect to pay dividends
in the foreseeable future. Any return on investment may be limited to the value of our common stock.
We do not anticipate paying cash dividends
on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial
condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If
we do not pay dividends, our common stock may be less valuable because a return on your investment will occur only if our stock
price appreciates.
Provisions in the Nevada Revised
Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers
for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such
actions.
Members of our board of directors and
our officers will have no liability for breaches of their fiduciary duty of care as a director or officer, except in limited circumstances,
pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised Statutes. Specifically,
Section 78.138 of the Nevada Revised Statutes provides that a director or officer is not individually liable to the company or
its shareholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or
officer unless it is proven that (1) the director’s or officer’s act or failure to act constituted a breach of his
or her fiduciary duties as a director or officer and (2) his or her breach of those duties involved intentional misconduct, fraud
or a knowing violation of law. This provision is intended to afford directors and officers protection against and to limit their
potential liability for monetary damages resulting from suits alleging a breach of the duty of care by a director or officer. Accordingly,
you may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty
of care. In addition, our Bylaws allow us to indemnify our directors and officers from and against any and all costs, charges and
expenses resulting from their acting in such capacities with us. This means that if you were able to enforce an action against
our directors or officers, in all likelihood, we would be required to pay any expenses they incurred in defending the lawsuit and
any judgment or settlement they otherwise would be required to pay. Accordingly, our indemnification obligations could divert needed
financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely
affect prevailing market prices for our common stock.
Risks Related to the Note Financings
Common Shares that we
issue upon conversion of promissory notes will dilute our existing stockholders and depress the market price of our common stock.
As of the date of this prospectus, we
are obligated to issue approximately 85,000,000 common shares upon conversion of the currently outstanding EMA Note and Auctus
Note. For EMA, the share total is based on $125,000 of currently outstanding principal and unpaid interest and based upon a conversion
price equal to the lesser of (i) the trading price for our common stock on the trading day prior to the closing date of the Note,
or (ii) a 50% discount to the lowest trading or lowest closing bid price for our common stock during the 25 trading day period
immediately prior to conversion, whichever is lower. For Auctus, the shares total is based on $165,000 of currently outstanding
principal and unpaid interest and based upon a conversion price equal to the lesser of (i) the lowest trading price of our common
stock during the twenty-five-day trading period prior to the issue date of the Auctus Note and (ii) 50% of the lowest trading price
of our common stock during the twenty-five-day trading period prior to the conversion.
The total potential issuable shares
increases with the inclusion of additional interest and any decrease in our stock price. As of the date of this prospectus, no
shares have been issued pursuant to conversion of the notes and neither lender has elected to convert any part of the notes to
date.
The issuance of shares upon conversion
of the notes will dilute our existing shareholders. The number of common shares issuable by us upon conversion of the notes is
dependent on the trading price of our common shares during the twenty days prior to conversion. If the price of our stock declines
in value, we will be obligated to issue more shares to the note holders which would have a further dilutive effect on our stock
which could depress the market price of our common stock.
We may be required to issue significant
amount of common shares upon conversion of notes that could result in a change of control.
The conversion price of the notes is
based upon the trading price of our common shares. There is no way to determine with certainty the number of common shares we will
be required to issue should note holders convert their notes into our common shares. As the notes are converted our stock price
will decline requiring us to issue an increased number of common shares. We are currently authorized to issue 2,000,000,000 common
shares. We presently have 134,100,000 shares outstanding. We could be required to increase our authorized shares to provide sufficient
authorized common stock for conversion of the notes.
The holders of the notes convertible
into our common stock will pay less than the then- prevailing market price for our common stock.
The notes are convertible at the lesser
of (i) the trading price for our common stock on the trading day prior to the closing date of the Note, or (ii) a 50% discount
to the lowest trading or lowest closing bid price for our common stock during the 25 trading day period immediately prior to conversion,
whichever is lower. As such, the note holders have a financial incentive to sell our common stock immediately upon receiving the
shares to realize the profit equal to the difference between the discounted price and the market price. If the noteholders sell
shares, the price of our common stock will likely decrease. If our stock price decreases, the noteholders may have a further incentive
to sell the shares of our common stock that they hold. These sales may put further downward pressure on our stock price and reduce
the value of your common shares.
If our stock price materially
declines, the convertible note holders will have the right to a large number of shares of common stock upon exchange of amounts
due under the notes, which may result in significant dilution.
The notes have a conversion feature
which is based upon 50% of our lowest trading price over a twenty trading day period. If our common stock price materially declines,
we will be obligated to issue a large number of shares to the holders of these notes upon conversion. This will likely materially
dilute existing shareholders. The potential for such dilutive issuances upon conversion of outstanding notes may depress the price
of common stock regardless of our business performance, and could encourage short selling by market participants, especially if
the trading price of our common stock begins to decrease.
USE OF PROCEEDS
The Selling Stockholders will receive
all of the proceeds from the sale of shares of common stock under this prospectus. We will not receive any proceeds from these
sales.
The Selling Stockholders will pay any
agent’s commissions and expenses it incurs for brokerage, accounting, tax or legal services or any other expenses it incurs
in disposing of the shares of common stock. We will bear all other costs, fees and expenses incurred in effecting the registration
of the shares of common stock covered by this prospectus. These may include, without limitation, all registration and filing fees,
SEC filing fees and expenses of compliance with state securities or “blue sky” laws.
DETERMINATION OF OFFERING PRICE
The Selling Shareholders will determine
at what price they may sell the offered shares, and such sales may be made at prevailing market prices, or at privately negotiated
prices.
SELLING STOCKHOLDER
The following table details the name
of the sole Selling Stockholders, EMA Financial, LLC (“EMA”) and Auctus Fund, LLC (“Auctus”), the number
of shares beneficially owned by such Selling Stockholders and the number of shares that may be offered by such Selling Stockholders
for resale under this prospectus.
In accordance with Rule 13d-3 of the
Exchange Act, “beneficial ownership” includes any shares of common stock as to which the Selling Stockholders has sole
or shared voting power or investment power and any shares of common stock the Selling Stockholders have the right to acquire within
sixty (60) days (including shares of common stock issuable pursuant to securities currently convertible or exercisable, or convertible
or exercisable within sixty (60) days).
Each of EMA and Auctus may sell any
number of shares of our common stock which are issuable upon conversion of amounts due under the EMA Note and Auctus Note, respectively.
Because the Selling Stockholders may offer all, some or none of the shares they hold, and because, based upon information provided
to us, there are currently no agreements, arrangements or understandings with respect to the resale of any of the shares, no definitive
estimate as to the number of shares that will be held by the Selling Stockholders after the offering can be provided. Therefore,
the following table has been prepared on the assumption that the entire 85,000,000 common shares being registered under this prospectus
will be sold by the Selling Stockholders to parties unaffiliated with them. Because the conversion price of the notes is variable
based on 50% of the lowest traded price of our common stock in the twenty five (25) trading days prior to the conversion date,
the number of shares of common stock that will actually be issued upon conversion of the notes may be more or less than the number
of shares of common stock being offered by this prospectus.
The following table is based on 134,100,000
shares outstanding as of the date of this registration statement.
|
|
|
Shares of Common Stock
|
|
Name of Selling Shareholder
|
|
Beneficially
Owned Prior to
the Sale of all
Shares covered by
this Prospectus
|
|
|
Covered by
this Prospectus
|
|
|
Beneficially
Owned After
the Sale of all
Shares covered by
this Prospectus(3)
|
|
|
As a Percent of
Total Outstanding
After the Sale of
Shares covered by
this Prospectus(4)(5)
|
|
EMA Financial, LLC(1)
|
|
42,500,000(6)
|
|
|
42,500,000
|
|
|
0
|
|
|
0
|
|
Auctus Fund, LLC(2)
|
|
42,500,000(6)
|
|
|
42,500,000
|
|
|
0
|
|
|
0
|
|
|
(1)
|
EMA Group, LLC (“EMA Group”) is the investment manager
of EMA Financial, LLC (“EMA”), and Felicia Preston (“Preston”) is the managing member of EMA Group. Therefore
each of EMA Group and Preston may be deemed to have voting and investment power over the securities. Each of EMA Group and Preston
expressly disclaims any equitable or beneficial ownership of such securities.
|
|
|
(2)
|
Alfred Sollami and Louis Posner of Auctus Fund LLC, have voting and
investment power over the shares owned by Auctus Fund LLC.
|
|
|
(3)
|
We have assumed that all shares registered for sale under this prospectus
will be sold, but there is no obligation on the part of the Selling Stockholders to sell all of our shares offered by this prospectus
as detailed below in the section entitled “Plan of Distribution.”
|
|
|
(4)
|
After the offering is complete, assuming all of the notes are converted
into the 85,000,000 shares being registered we would have 219,100,000 common shares outstanding. The 85,000,000 shares being registered
upon issuance will represent approximately 39% of our common shares.
|
|
|
(5)
|
Under the terms of the notes, conversions shall not be permitted
if such conversion will result in either Selling Stockholder owning more than 4.99% of our common shares outstanding after giving
effect to such conversion.
|
|
|
(6)
|
Assumes shares owned directly after conversion of the EMA Note and/or Auctus Note, as applicable,
or reflects shares underlying unconverted portions of the EMA Note and/or Auctus Note, or both.
|
To our knowledge, neither the Selling
Stockholders nor their beneficial owners:
|
|
§
|
has ever been one of
our officers or directors or an officer or director of our predecessors or affiliates; or
|
|
|
§
|
are broker-dealers or
affiliated with broker-dealers.
|
PLAN OF DISTRIBUTION
We are registering the shares of Common
Stock to permit the resale of these shares of Common Stock by the Selling Stockholders and any of its transferees, pledgees, assignees,
donees, and successors-in-interest from time to time after the date of this prospectus. We will not receive any of the proceeds
from the sale by the Selling Stockholders of the shares of Common Stock.
The Selling Stockholders and any of
their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby
on the OTCQB or any other stock exchange, market or trading facility on which the securities are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when
selling securities:
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§
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ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers;
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§
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block trades in which
the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
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§
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purchases by a broker-dealer
as principal and resale by the broker-dealer for its account;
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§
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an exchange distribution
in accordance with the rules of the applicable exchange;
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§
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privately negotiated
transactions;
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§
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settlement of short sales
entered into after the effective date of the registration statement of which this prospectus is a part;
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§
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in transactions through
broker-dealers that agree with the Selling Shareholders to sell a specified number of such securities at a stipulated price per
security;
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§
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through the writing or
settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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§
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a combination of any
such methods of sale; or
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§
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any other method permitted
pursuant to applicable law.
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The Selling Stockholders may also sell
securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Shareholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts
to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess
of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with FINRA IM-2440.
In connection with the sale of the securities
or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders
may also sell securities short and deliver these securities to close out its short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholder may also enter into option or other transactions
with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers
or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. The Selling Stockholders have informed the Company that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the securities. In no event shall any broker-dealer receive fees, commissions and
markups which, in the aggregate, would exceed eight percent (8%).
The Company is required to pay certain
fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the
Selling Shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be
deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The
Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed
sale of the resale securities by the Selling Stockholders.
We agreed to keep this prospectus effective
until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without
regard to any volume or manner-of-sale limitations by reason of Rule 144, or (ii) all of the securities have been sold pursuant
to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold
only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain
states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations
under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the
commencement of the distribution. In addition, the Selling Shareholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities
of the common stock by the Selling Shareholders or any other person. We will make copies of this prospectus available to the Selling
Shareholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time
of the sale (including by compliance with Rule 172 under the Securities Act).
LEGAL PROCEEDINGS
We are not subject to any legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
The following information sets forth the names,
ages, and positions of our current directors and executive officers.
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Name
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Age
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Positions and Offices Held
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Adam Taylor
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53
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Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director
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Johanne Margot Elizabeth Ellis
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56
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Chief Operating Office
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Set forth below is a brief description of the
background and business experience of each of our current executive officers and directors.
Adam Taylor
From 2003 to 2014, Taylor was Options Strategist
and Sales Director and serviced clients in a hedge fund trading through MF Global with £20m under management. In 2014, he
worked for Impregnable Security as its Sales and Marketing Director where he secured partnerships with some of the largest security
companies in the UK. In 2016, he worked for LP Investment Management as a Sales and Marketing Director where he engaged in trading
private client accounts through its trading desk at Central Markets. Taylor is an FSA Certified Trader and Broker authorized to
trade on the IPE.
Aside from that provided above, Mr. Taylor
does not hold and has not held over the past five years any other directorships in any company with a class of securities registered
pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered
as an investment company under the Investment Company Act of 1940.
Mr. Taylor is qualified to serve on our Board
of Directors because of his sales, marketing and business development experience.
Johanne Margot Elizabeth Ellis
From 2013 to the present, Ms. Ellis has been
working in a consultant capacity in Internet e-commerce. This involves researching trends and market fluctuations, building websites
and creating an online presence for businesses and retailers influencing buyers with online content using social media platforms
such as Instagram, Facebook and Twitter alongside giving advice and support as a consultant to clients in order to build brands.
Ms. Ellis has a BA in English Literature.
Aside from that provided above, Ms. Ellis does
not hold and has not held over the past five years any other directorships in any company with a class of securities registered
pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered
as an investment company under the Investment Company Act of 1940.
Term of Office
Our Directors are appointed for a one-year
term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our
bylaws. Our officers are appointed by our board of directors and hold office until removed by the board, subject to their respective
employment agreements.
Significant Employees
We have no significant employees other than
our officers and directors.
Family Relationships
There are no family relationships between or
among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
During the past 10 years, none of our current
directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f)
of Regulation S-K, including:
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1.
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Any petition under the Federal bankruptcy laws or any state insolvency
law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of
such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing,
or any corporation or business association of which he or she was an executive officer at or within two years before the time of
such filing;
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2.
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Any conviction in a criminal proceeding or being named a subject
of a pending criminal proceeding (excluding traffic violations and other minor offenses);
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3.
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Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or
otherwise limiting, the following activities: i. Acting as a futures commission merchant, introducing broker, commodity trading
advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures
Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer
in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or
insurance company, or engaging in or continuing any conduct or practice in connection with such activity; ii. Engaging in any type
of business practice; or iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or
in connection with any violation of Federal or State securities laws or Federal commodities laws;
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4.
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Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days
the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment,
insurance or banking activities, or to be associated with persons engaged in any such activity;
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5.
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Being found by a court of competent jurisdiction in a civil action
or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission
has not been subsequently reversed, suspended, or vacated;
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6.
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Being found by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action
or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
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7.
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Being subject to, or a party to, any Federal or State judicial or
administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation
of: i. Any Federal or State securities or commodities law or regulation; or ii. Any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or iii. Any law or regulation
prohibiting mail or wire fraud or fraud in connection with any business entity; or
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8.
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Being subject to, or a party to, any sanction or order, not subsequently
reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.
78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated
with a member.
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Committees of the
Board
Our company currently
does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have
a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such committees,
at this time, because the functions of such committees can be adequately performed by the board of directors.
Our company does not
have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The
board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or
minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for
evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and
make recommendations for election or appointment.
A shareholder who wishes to communicate with
our board of directors may do so by directing a written request addressed to our CEO and director, Adam Taylor, at the address
appearing on the first page of this annual report.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent
of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent
beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the
best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us, no persons have
failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended
December 31, 2017, other than the Form 3 for Mr. Taylor, which has not yet been filed and a Form 3 for Mr. Ellis, which has not
yet been filed.
Code of Ethics
As of the date of this Prospectus, we had not
adopted a Code of Ethics. We are a small company with few individuals comprising our board and management, which does not warrant
the adoption of a Code of Ethics.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of
August 28, 2018, certain information as to shares of our voting stock owned by (i) each person known by us to beneficially own
more than 5% of our outstanding voting stock, (ii) each of our directors, and (iii) all of our executive officers and directors
as a group.
Unless otherwise indicated below,
to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of voting stock,
except to the extent authority is shared by spouses under applicable law. Unless otherwise indicated below, each entity or person
listed below maintains an address of
86-90 Paul Street London, England EC2A 4NE.
The number of shares beneficially owned
by each stockholder is determined under rules promulgated by the SEC. The information is not necessarily indicative of beneficial
ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity
has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial
ownership within 60 days through the exercise of any stock option, warrant or other right. The inclusion in the following
table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial
owner.
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Common Stock
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Name and Address of Beneficial Owner
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Number of Shares
Owned (1)
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Percent of Class (2)
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Adam Taylor
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10,000,000
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(3)
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7%
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Johanne Ellis
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0
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0%
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All Directors and Executive Officers as a Group (1 person)
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10,000,000
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7%
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5% Holders
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Jose Del La Cruz
64 Rue Vieille Du Temple
Paris, France 75004
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10,000,000
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8%
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Gimwork Project LP(4)
SL014174 78 Montgomery St. Suite 6
Scoltand
Edinburg EH7 5JA
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78,700,000
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59%
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(1)
Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares
that power with that person’s spouse) with respect to all shares of voting stock listed as owned by that person or
entity.
(2)
Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole
or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days,
including upon exercise of common shares purchase options or warrants. The percent of class is based on 134,100,000 voting shares
as of August 28, 2018.
(3) Mr.
Taylor holds 1,000,000 shares of the company’s Series A Preferred Stock, which is 100% of the outstanding shares of Series
A Preferred Stock. These preferred shares are able to convert into 10,000,000 shares of common stock.
(4)
Gimwork Project LP is beneficially owned by Michael Heiberg and Rasmus Refer.
DESCRIPTION OF SECURITIES
The following descriptions are summaries
of the material terms that are included in our amended and restated articles of incorporation (as amended) and our bylaws (as amended)
as well as the specific agreements such descriptions relate to. This summary is qualified in its entirety by the specific terms
and provisions contained in our restated articles of incorporation, bylaws and the specific agreements described herein, copies
of which we have filed as exhibits to the registration statement of which this prospectus is a part, and by the provisions of applicable
law.
Overview
Our authorized capital stock consists
of 2,000,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001
per share. As of the date of this Prospectus, there were 134,100,000 shares of our common stock issued and outstanding and 1,000,000
shares of preferred stock issued and outstanding.
Common Stock
The holders of our common stock currently
have (i) equal ratable rights to dividends from funds legally available therefore, when, as and if declared by the Board of Directors
of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of
common stock upon liquidation, dissolution or winding up of the affairs of the Company (iii) do not have preemptive, subscription
or conversion rights and there are no redemption or sinking fund provisions or rights applicable thereto; and (iv) are entitled
to one non-cumulative vote per share on all matters on which stock holders may vote. All shares of common stock now outstanding
are fully paid for and non-assessable and all shares of common stock which are the subject of this offering, when issued, will
be fully paid for and non-assessable. Please refer to the Company’s Articles of Incorporation, Bylaws and the applicable
statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of the Company’s
securities.
Preferred Stock
Our board of directors may become authorized
to authorize preferred shares of stock and to divide the authorized shares of our preferred stock into one or more series, each
of which must be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series
and classes. Our board of directors is authorized, within any limitations prescribed by law and our articles of incorporation,
to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of
preferred stock including, but not limited to, the following:
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(1)
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The number of shares constituting that series and the distinctive designation of that series, which may be by distinguishing number, letter or title;
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(2)
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The dividend rate on the shares of that series, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, of payment of dividends on shares of that series;
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(3)
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Whether that series will have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;
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(4)
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Whether that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors determines;
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(5)
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Whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
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(6)
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Whether that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
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(7)
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The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series; and
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(8)
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Any other relative rights, preferences and limitations of that series.
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Series A Preferred Stock
On July 16, 2018, pursuant to Article III of
our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred
Stock, consisting of up 1,000,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred
Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution,
or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters
submitted to shareholders at a rate of 1,000 votes for each share held. Holders of Series A Preferred Stock are entitled to convert
each share held for 10 shares of common stock.
Registration Rights
In connection with the Note Financings,
we entered into registration rights agreements with EMA and Auctus. The agreements required us to file a registration statement
with the Securities and Exchange Commission in connection with shares underlying the EMA Note and Auctus Note. We are filing this
registration statement to maintain the registered status of those shares underlying the EMA Note and Auctus Note.
Dividend Policy
We have never declared or paid any cash
dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.
Options
We do not have any outstanding options
or warrants to purchase shares of our common stock.
Certain Anti-Takeover Provisions
Nevada Revised Statutes sections 78.378 to
78.379 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations unless the articles
of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply. Our articles of incorporation
and bylaws do not state that these provisions do not apply. The statute creates a number of restrictions on the ability of a person
or entity to acquire control of a Nevada company by setting down certain rules of conduct and voting restrictions in any acquisition
attempt, among other things. The statute is limited to corporations that are organized in the state of Nevada and that have 200
or more stockholders, at least 100 of whom are stockholders of record and residents of the State of Nevada; and does business in
the State of Nevada directly or through an affiliated corporation. Because of these conditions, the statute currently does not
apply to our company.
Listing of Common Stock
Our common stock is currently traded on the OTCQB under the
trading symbol “DRNG.”
Transfer Agent and Registrar
The transfer agent and registrar of our common stock is Island
Stock Transfer.
INTERESTS OF NAMED EXPERTS
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant
or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries
as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The Doney Law Firm, our independent legal counsel,
has provided an opinion on the validity of our common stock.
L&L CPAs, P.A. has audited our financial
statements included in this prospectus and registration statement to the extent and for the periods set forth in their audit report.
L&L CPAs, P.A. has presented their report with respect to our audited financial statements. The report of L&L CPAs, P.A.
is included in reliance upon their authority as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the following
provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person
in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the shares being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
DESCRIPTION OF BUSINESS
Overview
We are an early stage security and surveillance
company focusing on commercializing a drone enhanced home security system as a turnkey solution. The solution is app-based and
includes a drone, infrared camera, and Android mobile app component: once an alarm has been triggered, the DroneGuarder™
will immediately take off from a wireless charging pad. The camera within the drone will record video for a few seconds, process
it and then send an alert if a threat is found, which the DroneGuarder™ app sends in the form of a text, image or short recorded
video if supported by the GSM network. The DroneGuarder™ can fly for up to 20 minutes, using GPS to navigate in its preprogrammed
areas and return back to its charging pad after completing surveillance.
Once an alarm has been triggered the
drone will instantly leave its charging pad and fly to the destination where the alarm was activated, or any other predefined destination
programmed for the specific alarm. The infrared (IR) camera will recognize any human movement night or day, and stream it directly
to the smartphone that is connected to the drone when the app is open and the user is on that screen, recording all activity. On
this drone and all drones from DJI, simultaneous action is not possible. The video must end before the phone can do other things.
This is because if the video goes into the background, the video will stop and the drone will immediately return. All homes or
businesses are great candidates for the drone alarm system as it is compatible with standard surveillance cameras and movement
detectors. Each sensors GPS position has been registered in the drone with a smartphone, so it knows exactly where to go.
The solution is expected to come as
a packaged solution that can be tailored to fit the requirements of an individual security installation company and will be sold
to U.S. based companies that provide security solutions for private homes, gated communities and construction sites. The solution
is designed to be flexible enough to integrate into all existing security solutions that a gated community or private home might
already have, as well incorporate add-ons with extra features if needed. The targeted markets include the USA, Canada, Europe,
South Africa and the Asia-Pacific region.
Our primary revenue model is expected
to consist of selling home security systems directly to the clients (e.g. homes, business, or security resellers). We plan to focus
on selling to resellers, as it enables the Company to reach the widest customer base for the lowest cost. Our secondary business
model is expected to be leasing home security systems for a monthly flat fee and pre-selling discounted first-versions of the product.
We plan to develop our own software and acquire the hardware needed from a third party in an attempt to lower expenses.
We have recently decided to pursue an
agreement with a Chinese company to develop our drone hardware. We expect this agreement to be completed in the coming weeks. This
will delay our final prototype, but we have completed the AI portion of the system. In addition, our new App is expected to be
launched in December 2018.
The App is a key component of our security
solution with our proprietary functionality built into the App controlled by a customer’s iPhone or iPad. The performance
includes “Patrol” where a customer clicks the Patrol button on the App and the drone autonomously patrols the entire
grid of the customer’s property using pre-designated GEO Fencing GPS weigh points that stream a real-time video feed back
to the phone or tablet via the App.
Our new App will have a function called
“Go Home” where at any time a customer can call the drone back to its home wireless charging base, normally located
on the roof of the home or business. Additionally, we have a live weather function on the App and other abilities that are all
part of the Drone Guarder App platform.
Security System Setup
The drone security system customer (hereafter
known as the “Customer”) buys a security system either in parts or as a package. There are two apps within the system:
a controller app for the Android used as a home base for IoT that can only receive alarms from IoT, send messages and control the
drone, and a presenter app for Android and iOS that can receive messages from the controller app, see video from the drone (via
the sky) and send controls to the drone via the controller app. The Customer then downloads the security system Android app (hereafter
known as the Controller App) from the Google Play Store on to an Android phone that is part of the security system, i.e., it must
not leave the WiFi network it is connected to. If this happens, the Controller App must present a message saying that it has lost
access to the home security WiFi network. Then, the customer downloads the presenter app from either the Google Play Store (for
Androids) or the Apple Store.
The Customer is then able to perform the following
actions:
1. The Customer is able to connect to the cloud
service which is the backend of the Apps (we will need to confirm this with our web developer). Prior to the app download the Customer
must have purchased a subscription from the website. In-App purchases are not available and must be done beforehand. The Apps must
immediately offer a login window to the web service so that the Customer can be authorized.
2. The Customer is then able to connect to
the home WiFi system. This is compulsory for the steps that follow.
3. The IoT device system is discoverable over
WiFi (it usually broadcasts a second WiFi signal) and the user must connect the Controller App to the IoT system (similar to Chromecast)
and then authorize themselves. This is part of the web service setup done separately and will use the same username and password
used when purchasing the subscription. This connection window has options including error messages and contact options in case
of errors.
4. Then the Apps must connect to the drone
via its controller (only DJI Maveric Pro is supported). A connection window is then shown showing success or failure.
5. The Apps are finally ready for service.
6. The Apps will push notifications of ALIVE
configurable as to the number of minutes to show that it is still connected to the drone and security system. Will push error notifications
also.
7. The Customer will then select up to 5 phone
numbers and 5 email addresses that they will receive alerts at (does not include livestream). The Apps may be programmed to choose
the most common email addresses or phone numbers to send messages to them first. However, they do not have the capability to reply
to messages or emails.
Sensor System Setup
The Customer starts up the Apps in Sensor Setup
mode. This must be done at least once in order for the system to operate correctly. This can be removed from the other setup steps;
however, if not done, the drone will not operate and all alerts from the sensors will be directly alerted to the Customer on the
phone numbers and email addresses they have set up in their contact list.
The Customer shall then set up their Location
settings to authorize the Apps to access the Location while active. Then they shall use this phone and take it to each sensor location
and press a button to add that sensor location with a unique ID (indoors might be an issue so if there are no GPS coordinates,
an error will be displayed when trying to add that location. Also if the GPS coordinate is identical to a previous sensor location,
another error will be thrown).
Once all are added, the Customer shall be able
to close the sensor setup and restart the Apps. Such a message must be displayed. The Customer shall then be able to see all sensors
on a map and manually draw a path between them that is clear of obstacles. A third party Maps API will be used.
Patrol Mode
The Customer is able to set a patrol mode where
the drone will patrol the home. This cannot be more frequent that once an hour since the battery takes time to charge for the drone.
The Customer is able to see time remaining for drone charge and to cancel a patrol if needed. On patrol, the Customer is able to
see images if he or she wants. By default this is turned OFF so that all the Customer gets is an “All is Well!” message
or similar. The drone will patrol the home area and return if battery is low or it is called back or if the patrol is complete.
Alert Mode
The Customer receives an alert notification
that a sensor has been breached on the Android device connected to the home network. The Apps then will display a message on screen
and in addition, it must send a message to all other devices registered with the Apps. It must receive messages from the drone
and process the images and must format the images and send them to registered devices if configured to do so.
Research and Development Pipeline
Our research and development pipeline currently
includes the development and testing of our drone product, website and software. We are approximately four weeks away from completing
the first prototype of the drone.
Our Strategy
Our aim is to be the leading security and surveillance
company focused on commercializing an innovative drone-enhanced home security system as a turnkey solution, generated from our
research and development activities for developing a prototype of the drone and the software.
• Strategically collaborate.
We intend to seek to collaborate with security
and surveillance providers/resellers for commercialization of our drone enhanced security systems to security and surveillance
providers/resellers.
• Highly leverage external talent and
resources.
We plan to maintain strong talent internally
having expertise in our core areas of focus and as needed to execute efficiently on our development and business objectives. We
operate by conducting in house development on critical elements in our drone software, while forming strategic alliances around
novel technologies and outsourcing generic development activities to established contract organizations. We plan to continue to
rely on the very extensive experience of our management team to execute on our objectives.
• Evaluate commercialization strategies
in order to maximize the value of our products or future potential products.
As we progress our product through development
toward commercialization, we plan to evaluate several options for the product’s commercialization strategy. These options
include building our own internal sales force; entering into a joint marketing partnership with another security and surveillance
company, whereby we jointly sell and market the product; and out-licensing our product, whereby another security and surveillance
company sells and markets our product and pays us a royalty on sales. Our decision will be based on a number of factors including
capital necessary to execute on each option, size of the market to be addressed and terms of potential offers from other security
and surveillance companies. It is too early for us to know which of these options we will pursue for our products, assuming their
successful development.
Patents and Intellectual Property Rights
We do not currently possess any patents of
our own; however, we rely on the intellectual property rights of the existing technologies as well as our trade secrets in order
to protect our proprietary drone enhanced security product assets and associated technologies.
Employees
As of the date of this Prospectus, we have
2 employees, our Chief Executive Officer and Chief Operating Officer. The programming team is currently being outsourced as it
keeps operational cost to the bare minimum until the Company has raised the necessary funds to hire the remainder of our personnel.
Description of Property
Currently, we do not own any real estate. Our
principal executive offices are located at
86-90 Paul Street London, England EC2A 4NE
.
Our lease on this property is $12,000 per month. We believe that our properties are adequate for our current needs, but growth
potential may require larger facilities due to anticipated addition of personnel. We do not have any policies regarding investments
in real estate, securities or other forms of property.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations for the Years Ended
January 31, 2018 and 2017
Revenues
We have not earned any revenues since our inception
on May 14, 2012. We do not expect to generate any revenue until we have successfully marketed and sold our drone security system.
Expenses
We incurred operating expenses in the amount
of $642,360 for the year ended January 31, 2018, as compared with $43,890 for the same period ended 2017. Our operating expenses
for the year ended January 31, 2018 mainly consisted of management compensation of $431,617, professional fees of $78,926, consulting
fees of $49,900, general and administrative expenses of $33,676, travel expenses of $32,272 and website expenses of $14,196, as
compared professional fees of $32,594 and general and administrative expenses of $5,668 for the year ended January 31, 2017.
We recorded other expense of $20,636 for
the year ended January 31, 2018, as compared with other expenses of $4,017 for the year ended January 31, 2017. Other income
in 2018 is the result of a change in derivative liability of $114,440, offset by amortization of debt discount of $112,500 and
interest expense of $22,576. Our other expenses 2017 were the result of interest expense.
Net Loss
We incurred a net loss in the amount of $662,996
for the year ended January 31, 2018, as compared with a net loss of $47,907 for the same period ended 2017. Our losses for each
period are attributable to operating expenses together with a lack of any revenues.
Liquidity and Capital Resources
As of January 31, 2018, we had total current
assets of $19,525. Our total current liabilities as of January 31, 2018 were $805,973. As a result, we had a working capital deficit
of $786,448 as of January 31, 2018.
Operating activities used $292,678 in
cash for the year ended January 31, 2018, as compared with $30,213 in cash for the same period ended 2017. Our net loss of $662,996
along with a change in derivative liability of $114,440, offset mainly by stock-based compensation of $333,333 and amortization
of debt discount of $112,500 were the main contributors of our negative operating cash flow for the year ended January 31, 2018.
Our net loss of $47,907 was the main contributor to our negative operating cash flow for the year ended January 31, 2017, offset
by an increase in accrued expenses of $13,469.
Investing activities used $20,623 in cash
for the year ended January 31, 2018, as compared with $0 cash used for investing activities for the year ended January 31, 2017.
Our negative investing cash flow for the year ended January 31, 2018 was the result of our investment in intellectual property.
Financing activities provided $330,100
for the year ended January 31, 2018, as compared with $26,963 for the same period ended 2017. Our positive cash flow from financing
activities for the years ended January 31, 2018 were mainly the result of proceeds from convertible notes and notes payable.
Subsequent to year end, we received proceeds
from convertible promissory notes with an aggregate principal amount of $330,000. These notes are described in our Current Reports
on Form 8-K filed with the SEC on February 12 and 14, 2018 and March 5, 2018.
Despite the short term loans, we have insufficient
cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals.
The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund
operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working
capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement
or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms,
or at all.
Going Concern
The accompanying financial statements
have been prepared in conformity with generally accepted accounting principle, which contemplate our continuation as a going concern.
However, we have no revenues as of January 31, 2018. We currently have negative working capital, and have not completed our efforts
to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.
Management anticipates that we will be dependent,
for the near future, on additional investment capital to fund operating expenses. We intend to position the company so that we
may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances
that we will be successful in this or any of our endeavors or become financially viable and continue as a going concern.
Critical Accounting Policies
In December 2001, the SEC requested that all
registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated
that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial
condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the
need to make estimates about the effect of matters that are inherently uncertain.
Our critical accounting policies are set forth
in Note 2 to the financial statements.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued
accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
Off Balance Sheet Arrangements
As of January 31, 2018, there were no off balance
sheet arrangements.
Results of operations for the three months
ended April 30, 2018 and 2017
We have not earned any revenues since our inception
on May 14, 2012. We do not expect to generate any revenue until we have successfully marketed and sold our drone security system.
We incurred operating expenses in the amount
of $228,727 for the three months ended April 30, 2018, as compared with $41,367 for the same period ended 2017. Our operating expenses
for the three months ended April 30, 2018 were mainly attributable to general and administrative expenses of $26,500, management
compensation of $184,667 and professional fees of $14,546 and whereas our operating expenses for the three months ended April 30,
2017 were mainly attributable to professional fees of $31,855 and general and administrative expenses of $7,270.
We expect our operating expenses to increase
in future quarters, as we take more steps to advance our business plan.
We incurred other expenses of $253,758
and other expenses of $2,873 for the three months ended April 30, 2018 and 2017, respectively. Our other expenses for the
three months ended April 30, 2018 is the result amortization of debt discount, interest expense, amortization of deferred
financing and change in derivative liability. Other expenses for the three months ended April 30, 2017 is the result
of interest expense.
We incurred a net loss in the amount of $482,485
for the three months ended April 30, 2018, as compared with a net loss of $44,240 for the same period ended 2017.
Liquidity and Capital Resources
As of April 30, 2018, we had current assets
of $212,179 and total assets of $296,302. Our total current liabilities as of April 30, 2018 were $1,522,805. As a result, we had
a working capital deficit of $1,310,626 as of April 30, 2018.
Operating
activities used $228,500 in cash for the three months ended April 30, 2018, as compared with $37,781 for the three months
ended April 30, 2017. Our negative operating cash in 2018 flow was mainly the result of our net loss for the period, and a
change in prepaid expenses, offset mainly by stock based compensation and amortization of debt discount. We primarily
relied on cash from loans to fund our operations during the period ended April 30, 2018.
Investing activities used $6,000 in cash for
the three months ended April 30, 2018, as compared with $20,000 for the three months ended April 30, 2017. Our negative investing
cash flow was related to software development of our drone technology.
Financing activities provided $268,400 in cash
for the three months ended April 30, 2018, as compared with $75,000 for the three months ended April 30, 2017.
We received proceeds
from convertible promissory notes with an aggregate principal amount of $330,000. These notes are described in our Current Reports
on Form 8-K filed with the SEC on February 12 and 14, 2018 and March 5, 2018.
Despite the short term loans, we have insufficient
cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals.
The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund
operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working
capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement
or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms,
or at all.
Off
Balance Sheet Arrangements
As of
April 30, 2018
, there were no off balance sheet arrangements.
Going Concern
We have negative working capital, have incurred
losses since inception, and have not yet received revenues from sales of products or services. These factors create substantial
doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary
if we are unable to continue as a going concern.
Our ability to continue as a going concern
is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable
operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement
and ongoing operations; however, there can be no assurance we will be successful in these efforts.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than described
below or the transactions described under the heading “Executive Compensation” (or with respect to which such information
is omitted in accordance with SEC regulations), there have not been, and there is not currently proposed, any transaction or series
of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser
of $120,000 or one percent of the average of our total assets at year-end for the last three completed fiscal years, and in which
any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of
any of the foregoing persons had or will have a direct or indirect material interest.
On December 6, 2016, Gimwork Project LP paid
expenses of $1,963 on our behalf. The balance due to the shareholder was $2,208 and $245 as of January 31, 2018 and January 31,
2017, respectively.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Our common stock is quoted under the symbol
“DRNG” on the OTCQB operated by OTC Markets Group, Inc. Only a limited market exists for our securities. There
is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder
may be unable to resell his securities in our company.
The following tables set forth the range of
high and low bid prices for our common stock for the each of the periods indicated as reported by the OTCQB. These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
|
Fiscal Year Ending January 31, 2018
|
|
Quarter Ended
|
|
High $
|
|
Low $
|
|
|
January 31, 2018
|
|
|
|
0.187
|
|
|
|
0.04
|
|
|
|
October 31, 2017
|
|
|
|
0.55
|
|
|
|
0.041
|
|
|
|
July 31, 2017
|
|
|
|
1.26
|
|
|
|
0.15
|
|
|
|
April 30, 2017
|
|
|
|
0.75
|
|
|
|
0.029
|
|
|
Fiscal Year Ending January 31, 2017
|
|
Quarter Ended
|
|
High $
|
|
Low $
|
|
|
January 31, 2017
|
|
|
|
0.055
|
|
|
|
0.031
|
|
|
|
October 31, 2016
|
|
|
|
0.0465
|
|
|
|
0.031
|
|
|
|
July 31, 2016
|
|
|
|
0.0225
|
|
|
|
0.0465
|
|
|
|
April 30, 2016
|
|
|
|
0.0767
|
|
|
|
0.04
|
|
On August 16, 2018, the last reported sale
price of our common stock as reported on the OTCQB was $0.0225 per share.
Penny Stock
The SEC has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market 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 penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure
document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) 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 of such duties or other requirements of the securities
laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and
the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary
actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains
such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior
to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation
of the broker-dealer and its salesperson in the transaction; (c) 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 (d) a monthly account statement
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 as to transactions involving penny stocks, and a signed and
dated copy of a written suitability statement.
These disclosure requirements may have the
effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.
Holders of Our Common Stock
As of the date of this Prospectus, we had 134,100,000
shares of our common stock issued and outstanding, held by thirty-five (35) shareholders of record, with others holding shares
in street name.
Dividends
There are no restrictions in our articles of
incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring
dividends where after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business, or;
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights
of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends and we do
not plan to declare any dividends in the foreseeable future.
Recent Sales of Unregistered Securities
On May 25, 2018, our board of directors resolved
to renew Mr. Taylor’s agreement for another year. As such, we agreed to issue to him 10,000,000 shares of restricted common
stock as provided in the agreement. On July 16, 2018, we issued to Mr. Taylor 1,000,000 shares of our newly created Series A Preferred
Stock in lieu of the 10,000,000 shares of common stock owed to him under his employment agreement.
Securities Authorized for Issuance under
Equity Compensation Plans
We do not have any equity compensation plans.
EXECUTIVE COMPENSATION
The table below summarizes all compensation awarded to, earned by,
or paid to our former or current executive officers for the fiscal years ended January 31, 2018 and 2017.
|
SUMMARY COMPENSATION TABLE
|
|
Name and principal position
|
Year
|
Salary ($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
|
Jorgen Frederiksen
Former Chief Executive Officer, Chief Financial Officer and
Director
|
2018
2017
|
n/a
n/a
|
n/a
0
|
n/a
0
|
n/a
0
|
n/a
0
|
n/a
0
|
n/a
0
|
n/a
0
|
|
Adam Taylor
Chief Executive Officer, Chief Financial Officer and Director
|
2018
2017
|
60,000
0
|
38,248
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
98,284
0
|
|
Johanne Ellis
Chief Operating Officer
|
2018
2017
|
36,000 n/a
|
n/a
n/a
|
n/a
n/a
|
n/a
n/a
|
n/a
n/a
|
n/a
n/a
|
n/a
n/a
|
36,000
n/a
|
Narrative Disclosure to the Summary
Compensation Table
Effective February 12, 2018, the Company entered into an employment
agreement with Johanne Ellis. Under the agreement, the Company agreed to compensate Ms. Ellis $36,000 annually.
Effective May 3, 2017, the Company entered into an employment agreement
with Adam Taylor. Under the agreement, the Company agreed to compensate Mr. Taylor $36,000 annually and provide him with 10 million
shares of common stock, if the Company’s renews after the first year. Subsequently, the board of directors modified the terms
of Mr. Taylor’s employment compensation by increasing his salary to $60,000 and providing a bonus of $38,248.
On May 25, 2018, our board of directors resolved
to renew Mr. Taylor’s agreement for another year. As such, we agreed to issue to him 10,000,000 shares of restricted common
stock as provided in the agreement. On July 16, 2018, we issued to Mr. Taylor 1,000,000 shares of our newly created Series A Preferred
Stock in lieu of the 10,000,000 shares of common stock owed to him under his employment agreement.
The table below summarizes all unexercised
options, stock that has not vested, and equity incentive plan awards for each named executive officer as of January 31, 2018.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
|
OPTION AWARDS
|
STOCK AWARDS
|
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or Units
of
Stock That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
|
Adam Taylor
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Johanne Ellis
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Director Compensation
We do not pay any compensation to our directors at this time.
However, we reserve the right to compensate our directors in the future with cash, stock, options, or some combination of the above.
FINANCIAL STATEMENTS
Index to Financial Statements Required by Article
8 of Regulation S-X:
|
Audited Financial Statements:
|
|
F-1
|
Report of Independent Registered Public Accounting Firm;
|
|
F-2
|
Balance Sheets as of January 31, 2018 and 2017;
|
|
F-3
|
Statements of Operations for the years ended January 31, 2018 and 2017;
|
|
F-4
|
Statement of Stockholders’ Equity as of January 31, 2018;
|
|
F-5
|
Statements of Cash Flows for the years ended January 31, 2018 and 2017; and
|
|
F-6
|
Notes to Financial Statements.
|
|
Unaudited Financial Statements:
|
|
F-12
|
Balance Sheets as of April 30, 2018 and January 31 2017;
|
|
F-13
|
Statements of Operations for the three months ended April 30, 2018 and 2017;
|
|
F-14
|
Statements of Cash Flows for the three months ended April 30, 2018 and 2017; and
|
|
F-15
|
Notes to Financial Statements.
|
NC Office
19720 Jetton Road, 3rd
Floor
Cornelius, NC 28031
Tel: 704-897-8336
Fax: 704-919-5089
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors and
Drone Guarder,
Inc. (Formerly Vopia, Inc.)
Opinion
on the Financial Statements
We have audited
the accompanying balance sheets of Drone Guarder, Inc. (“the Company”) as of January 31, 2018 and 2017 the related
statement of operations, stockholders’ deficit, and cash flow and the related notes (collectively referred to as the “financial
statements”) for the years ended January 31, 2018 and 2017. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audit. In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January
31, 2018 and 2017, and the results of its operations, changes in stockholders’ deficit and cash flows for the years then
ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 11 to the consolidated financial
statements, the Company has an accumulated deficit, recurring losses, and expects continuing future losses, and has stated that
substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the
events and conditions and management’s plans regarding these matters are also described in Note 11. The consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
The firm has
served this client since April 2016.
/s/ L&L CPAS, PA
L&L CPAS, PA
Certified Public Accountants
Cornelius, NC
The United States of America
June 15, 2018
www.llcpas.net
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
BALANCE
SHEETS
(Audited)
|
ASSETS
|
|
January
31, 2018
|
|
January
31, 2017
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
19,525
|
|
|
$
|
2,726
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
19,525
|
|
|
|
2,726
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
|
|
|
|
|
|
Furniture
and Equipment
|
|
|
1,050
|
|
|
|
1,050
|
|
Accumulated
Depreciation
|
|
|
(1,040
|
)
|
|
|
(832)
|
|
Total
Fixed Assets
|
|
|
10
|
|
|
|
218
|
|
|
|
|
|
|
|
|
|
|
Investment
in intellectual property
|
|
|
78,123
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
97,658
|
|
|
$
|
2,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accrued
expenses
|
|
$
|
33,016
|
|
|
$
|
16,875
|
|
Accrued
expense-related party
|
|
|
333,333
|
|
|
|
|
|
Accrued
interest
|
|
|
28,756
|
|
|
|
6,180
|
|
Convertible
note payable, net of debt discount of $112,500
|
|
|
112,500
|
|
|
|
—
|
|
Promissory
notes payable
|
|
|
192,500
|
|
|
|
62,500
|
|
Advances
from related party
|
|
|
18,000
|
|
|
|
18,000
|
|
Due
to shareholder
|
|
|
2,308
|
|
|
|
2,208
|
|
Derivative
Liability
|
|
|
85,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
805,973
|
|
|
$
|
105,763
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity (Deficiency)
|
|
|
|
|
|
|
|
|
Common
stock, par value $0.001; 250,000,000 shares authorized, 133,400,000 (January 31, 2017 – 132,900,000) shares issued and
outstanding
|
|
|
133,400
|
|
|
|
132,900
|
|
Additional
paid in capital
|
|
|
130,123
|
|
|
|
73,123
|
|
Deficit
accumulated
|
|
|
(971,838
|
)
|
|
|
(308,842)
|
|
Total
Stockholders’ Equity (Deficiency)
|
|
|
(708,315
|
)
|
|
|
(102,819)
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$
|
97,658
|
|
|
$
|
2,944
|
The accompanying
notes are an integral part of these financial statements
.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
STATEMENTS
OF OPERATIONS
(Audited)
|
|
|
Year
Ended
|
|
|
|
January
31, 2018
|
|
January
31, 2017
|
|
|
|
|
|
|
|
REVENUES
|
|
$-
|
|
$-
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Depreciation
Expense
|
|
|
208
|
|
|
|
208
|
|
General and administrative
|
|
|
33,676
|
|
|
|
5,668
|
|
Bank fees
|
|
|
1,565
|
|
|
|
20
|
|
Consulting fees
|
|
|
49,900
|
|
|
|
5,400
|
|
Travel
|
|
|
32,272
|
|
|
|
—
|
|
Management compensation
|
|
|
431,617
|
|
|
|
—
|
|
Professional
fees
|
|
|
78,926
|
|
|
|
32,594
|
|
|
|
|
|
|
|
|
|
|
TOTAL
OPERATING EXPENSES
|
|
|
642,360
|
|
|
|
43,890
|
|
|
|
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS
|
|
|
(642,360
|
)
|
|
|
(43,890)
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
(22,576
|
)
|
|
|
(4,017)
|
|
Amortization of
debt discount
|
|
|
(112,500
|
)
|
|
|
—
|
|
Change
in derivative liability
|
|
|
114,440
|
|
|
|
—
|
|
TOTAL
OTHER INCOME (EXPENSE)
|
|
|
(20,636
|
)
|
|
|
(4,017)
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAXES
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$
|
(662,996
|
)
|
|
$
|
(47,907)
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE: BASIC AND DILUTED
|
|
|
*
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED (as adjusted for 20-1 forward stocks split)
|
|
|
133,066,067
|
|
|
|
132,900,000
|
* Less than $0.00 per share
The accompanying notes are an integral part
of these financial statements.
DRONE GUARDER, INC.
(FORMERLY VOPIA, INC.)
STATEMENTS OF
Stockholders’
Equity
CUMULATIVE
FROM MAY 14, 2012 (INCEPTION) tO JANUARY 31, 2018
)
(Audited)
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
Amount
|
|
|
|
Additional
Paid-In Capital
|
|
|
|
Deficit
Accumulated During the Development Stage
|
|
|
|
Total
Stockholders’ Equity
|
|
Inception, May 14, 2012
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash at $0.001 per share
|
|
|
100,000,000
|
|
|
|
100,000
|
|
|
|
—
|
|
|
|
(95,000
|
)
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period ended January 31, 2013
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(727
|
)
|
|
|
(727)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
January 31, 2013
|
|
|
100,000,000
|
|
|
|
100,000
|
|
|
|
—
|
|
|
|
(95,727
|
)
|
|
|
4,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash at $0.001 per share
|
|
|
30,900,000
|
|
|
|
30,900
|
|
|
|
—
|
|
|
|
(16,050
|
)
|
|
|
14,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period ended January 31, 2014
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,621
|
)
|
|
|
(15,621)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
January 31, 2014
|
|
|
130,900,000
|
|
|
|
130,900
|
|
|
|
—
|
|
|
|
(127,398
|
)
|
|
|
3,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forgiveness of director’s loan
|
|
|
|
|
|
|
|
|
|
|
6,623
|
|
|
|
—
|
|
|
|
6,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares for asset contribution
|
|
|
2,000,000
|
|
|
|
2,000
|
|
|
|
8,000
|
|
|
|
—
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period ended January 31, 2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(41,002
|
)
|
|
|
(41,002)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
January 31, 2015
|
|
|
132,900,000
|
|
|
|
132,900
|
|
|
|
14,623
|
|
|
|
(168,400
|
)
|
|
|
(20,877)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office space rent provided by related party
|
|
|
|
|
|
|
|
|
|
|
58,500
|
|
|
|
|
|
|
|
58,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period ended January 31, 2016
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(92,535
|
)
|
|
|
(92,535)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
January 31, 2016
|
|
|
132,900,000
|
|
|
|
132,900
|
|
|
|
73,123
|
|
|
|
(260,935
|
)
|
|
|
(54,912)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period ended January 31, 2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(47,907
|
)
|
|
|
(47,907)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
January 31, 2017
|
|
|
132,900,000
|
|
|
|
132,900
|
|
|
|
73,123
|
|
|
|
(308,842
|
)
|
|
|
(102,819)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services at $0.115 per share
|
|
|
500,000
|
|
|
|
500
|
|
|
|
57,000
|
|
|
|
|
|
|
|
57,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period ended January 31, 2018
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(662,996
|
)
|
|
|
(662,996)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
January 31, 2018
|
|
|
133,400,000
|
|
|
|
133,400
|
|
|
|
130,123
|
|
|
|
(971,838
|
)
|
|
|
(708,315)
|
The accompanying
notes are an integral part of these financial statements
.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
STATEMENTS
OF CASH FLOWS
(Audited)
|
|
|
Year
ended
|
|
|
|
January
31, 2018
|
|
January
31, 2017
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
$
|
(662,996
|
)
|
|
$
|
(47,907)
|
|
Adjustments to reconcile
net loss to net cash (used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation Expense
|
|
|
208
|
|
|
|
208
|
|
Stock based compensation
|
|
|
333,333
|
|
|
|
—
|
|
Amortization of
debt discount
|
|
|
112,500
|
|
|
|
—
|
|
Change in derivative
liability
|
|
|
(114,440
|
)
|
|
|
—
|
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
|
|
Increase
(decrease) in accrued expenses
|
|
|
16,141
|
|
|
|
13,469
|
|
Increase
in accrued interest
|
|
|
22,576
|
|
|
|
4,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS USED IN OPERATING ACTIVITIES
|
|
|
(292,678
|
)
|
|
|
(30,213)
|
|
|
|
|
|
|
|
|
—
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
—
|
|
Investment
in intellectual property
|
|
|
(20,623
|
)
|
|
|
|
|
CASH
FLOWS USED BY INVESTING ACTIVITIES
|
|
|
(20,623
|
)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Due
to shareholder
|
|
|
100
|
|
|
|
1,963
|
|
Proceeds
from convertible note payable
|
|
|
200,000
|
|
|
|
25,000
|
|
Proceeds
from promissory note payable
|
|
|
130,000
|
|
|
|
—
|
|
CASH
FLOWS PROVIDED BY FINANCING ACTIVITIES
|
|
|
330,100
|
|
|
|
26,963
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH
|
|
|
16,799
|
|
|
|
(3,250)
|
|
Cash, beginning
of period
|
|
|
2,726
|
|
|
|
5,976
|
|
Cash,
end of period
|
|
$
|
19,525
|
|
|
$
|
2,726
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
—
|
|
|
$
|
—
|
|
Income
taxes paid
|
|
$
|
—
|
|
|
$
|
—
|
|
NON-CASH
TRANSACTIONS:
|
|
|
|
|
|
|
|
|
Forgiveness
of loans from director
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance
of shares for intellectual property
|
|
$
|
57,500
|
|
|
$
|
—
|
The accompanying notes are an integral
part of these financial statements.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
JANUARY
31, 2018
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Drone
Guarder, Inc. (Formerly Vopia, Inc.) was incorporated as Blue Fashion Corp. under the laws of the State of Nevada on May 14, 2012.
The Company is an early stage security and surveillance company focusing on commercializing a drone enhanced home security
system as a turnkey solution. On August 5, 2014, the Company changed its name to Vopia, Inc. On March 24, 2017, the Company changed
its name to Drone Guarder, Inc.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements of Drone Guarder, Inc. 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 (“SEC”), . In the
opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the financial statements to
be not misleading have been reflected herein.
Accounting
Basis
The
Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”
accounting). The Company has adopted a January 31 fiscal year end.
Cash
and Cash
E
q
ui
v
a
lents
T
h
e
C
o
m
p
a
ny
c
o
nsi
d
ers
all
h
i
gh
ly li
qu
i
d
inves
t
m
e
n
ts
wit
h
t
h
e ori
g
i
n
a
l
m
atu
ritie
s
o
f
thre
e
m
on
t
hs
or
les
s
to
be ca
s
h
e
q
u
i
v
a
le
n
t
s.
The Company had $19,525 and $2,726 of cash as of January 31, 2018 and January 31, 2017, respectively.
Fair
Value of Financial Instruments
The
Company’s financial instruments consist of cash and cash equivalents and amounts due to shareholder. The carrying amount
of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these financial statements.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Stock-Based
Compensation
Stock-based
compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option
plan and has not granted any stock options.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
JANUARY
31, 2018
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basic
Income (Loss) Per Share
Basic
income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted
average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt
or equity. There are no such common stock equivalents outstanding as of January 31, 2018.
Comprehensive
Income
The
Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances.
When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income
comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant
transactions that are required to be reported in other comprehensive income.
Recent
Accounting Pronouncements
Drone
Guarder, Inc. does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flow.
NOTE
3 – INVESTMENT IN INTELLECTUAL PROPERTY
On
July 4, 2014, the Company entered into a contribution agreement with Gimwork Project LP for the acquisition of assets and the
assumption of liabilities associated with search technology software and online platforms. In consideration, the Company issued
to Gimwork Project LP 100,000 shares of common stock with a deemed value of $10,000. During the year ended January 31, 2016, the
Company has recorded an impairment of the investment in intellectual property in the amount of $10,000.
The
Company has paid $ 20,623 in software development costs to January 31, 2018. On October 2, 2017, the Company issued 500,000 common
shares of capital stock with a deemed value of $ 57,500 for services related to the development of the intellectual property.
NOTE
4 – LOANS FROM DIRECTOR AND SHAREHOLDER
On
May 11, 2012, a director loaned $381 to incorporate the Company.
On
November 1, 2012, a director loaned the Company $192 to purchase a business license and file an initial list with Nevada Secretary
of State.
On
November 6, 2012, a director loaned $5,000 to the Company for business expenses.
On
January 23, 2014, a director loaned $1,050 to purchase a Nikon D7000 digital SLR camera, and an 18-55mm AF-S DX VR Nikon Zoom
Lens.
The
above loans are unsecured, non-interest bearing and due on demand.
On
July 4, 2014, the former officer and director agreed to forgive $6,623 in loans, which was recorded as an increase in additional
paid in capital.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
JANUARY
31, 2018
NOTE
4 – LOANS FROM DIRECTOR AND SHAREHOLDER (CONTINUED)
The
balance due to the director was $0 and $0 as of January 31, 2018 and January 31, 2016, respectively.
On
October 29, 2014, a shareholder paid expenses of $245 on behalf of the Company.
On
December 6, 2016, a shareholder paid expenses of $1,963 on behalf of the Company.
During
the year ended January 31, 2018 the shareholder paid net expenses of $ 100 that was not reimbursed as of January 31, 2018.
The
balance due to the shareholder was $2,308 and $2,208 as of January 31, 2018 and January 31, 2017, respectively.
NOTE
5 – ADVANCES FROM RELATED PARTY
On
May 14, 2014 the Company received advances from a related party in the amount of $18,000. The advances are
unsecured,
non-interest bearing, with no specified terms of repayment.
On
November 20, 2014 the Company issued a promissory note payable in the amount of $10,000. The note bears interest at 10% per annum
and is due on demand. For the year ended January 31, 2015, this note was recorded in error as an advance from related party, when
it should have been recorded as a note payable. This has been reclassified on the balance sheet as of January 31, 2018 and January
31, 2017.
The
balance as of January 31, 2018 and January 31, 2017 of advances from related party was $18,000 and $18,000, respectively.
NOTE
6 – NOTES PAYABLE
On
November 20, 2014 the Company issued a promissory note payable in the amount of $10,000. The note bears interest at 10% per annum
and is due on demand. For the year ended January 31, 2015, this note was recorded in error as an advance from related party, when
it should have been recorded as a note payable. This has been reclassified on the balance sheet as of January 31, 2016.
On
June 24, 2015 the Company issued a promissory note payable in the amount of $12,500. The note bears interest at 10% per annum
and is due on demand.
On
December 10, 2015 the Company issued a promissory note payable in the amount of $15,000. The note bears interest at 10% per annum
and is due on demand.
On
December 23, 2016 the Company issued a promissory note payable in the amount of $25,000. The note bears interest at 10% per annum
and is due on demand.
On
February 6, 2017 the Company issued a promissory note payable in the amount of $55,000. The note bears interest at 10% per annum
and is due on demand.
On
April 19, 2017 the Company issued a promissory note payable in the amount of $20,000. The note bears interest at 10% per annum
and is due on demand.
On
May 24, 2017 the Company issued a promissory note payable in the amount of $20,000. The note bears interest at 10% per annum and
is due on demand.
On
July 5, 2017 the Company issued a promissory note payable in the amount of $20,000. The note bears interest at 10% per annum and
is due on demand.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
JANUARY
31, 2018
NOTE
6 – NOTES PAYABLE (CONTINUED)
On
September 18, 2017 the Company issued a promissory note payable in the amount of $15,000. The note bears interest at 10% per annum
and is due on demand.
The
balance as of January 31, 2018 and January 31, 2017 of notes payable $192,500 and $62,500, respectively.
NOTE
7 – CONVERTIBLE NOTES PAYABLE
On October 17, 2017, the Company
entered into a financing arrangement in the principal amount of $445,000 consisting of a convertible promissory note and warrants
to purchase common shares of the company. As of January 31, 2018, the company has borrowed $225,000 of the available balance of
$ 445,000. The outstanding principal of the Note bears interest at the rate of 10% per annum and is due July 17, 2018. An original
issue discount in the amount of $ 25,000 and the balance of the face value of the note of $200,000 on the issuance of the note
and will be amortized over the life of the note . During the period ended January 31, 2018, $59,147 of the debt discount
was amortized.
|
Debt
Discount
|
|
|
|
Beginning
Balance 1.31.17
|
|
-
|
|
Debt
discount
|
|
|
225,000
|
|
Amortization
of debt discount
|
|
|
(112,500
)
|
|
Ending
balance 1.31.18
|
|
|
112,500
|
The
Note is convertible at the option of the holder into common stock of the Company at a conversion price of $0.25 per share. A debt
discount related to the fixed rate conversion feature in the amount of $200,000 was recorded and is being amortized over the life
of the note. In addition, the holder of the note received warrants to purchase shares of the Company’s common stock
equal to $225,000 divided by the market value of the shares on the date the financing arrangement was entered into. Upon issue,
the Company recorded derivative liabilities for the conversion feature of the convertible notes and warrants, based up on the
Binomial Fair Value Model and using the following assumptions:
an exercise price of $0.25,
our stock price on the date of grant $.126 expected dividend yield of 0%, expected volatility of 251.50, risk free interest rate
of 1.25 for notes payable and 1.97% for warrants and an expected term of 0.75 years for notes payable and 5 years for warrants.
Upon initial valuation, the derivative liability of $171,877 was recorded for the warrants. For the year ended January 31, 2018,
the change in derivative liability was $(115,168), with a derivative liability balance of $56,709.
The
derivative liabilities are valued on the date of issuance of the convertible note payable and revalued at each reporting period
On January 31, 2018, the Company recorded derivative liabilities for the conversion feature of the convertible notes and warrants,
based up on the Binomial Fair Value Model and using the following assumptions:
an exercise
price of $0.25, our stock price on the date of grant $.05 expected dividend yield of 0%, expected volatility of 251.50, risk free
interest rate of 1.28 for notes payable and 2.01% for warrants and an expected term of 0.50 years for notes payable and 5 years
for warrants. . Upon initial valuation, the derivative liability of $82,518 was recorded for the notes payable. For the year ended
January 31, 2018, the change in derivative liability was $(45,166), with a derivative liability balance of $37,352 which has been
recorded on the income statement of the Company for the year ended January 31, 2018.
|
Derivative
Liability
|
|
|
|
Beginning
Balance 1.31.17
|
|
-
|
|
Initial
derivative liability
|
|
|
82,518
|
|
Initial
derivative - Warrants
|
|
|
117,482
|
|
Change
in fair value
|
|
|
(45,166)
|
|
Change
in fair value - Warrant
|
|
|
(69,274)
|
|
Ending
derivative liability 1.31.18
|
|
|
85,560
|
NOTE
8 – COMMON STOCK
The
Company has 250,000,000, $0.001 par value shares of common stock authorized.
Effective
September 9, 2014 the Company’s board of directors and majority of its shareholders approved a 20 for 1 forward split of
the Company’s common stock.
On
January 2, 2013, the Company issued 100,000,000 shares of common stock for cash proceeds of $5,000 at $0.001 per share.
On
October 25, 2013, the Company issued 30,900,000 shares of common stock for cash proceeds of $15,450 at $0.01 per share.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
JANUARY
31, 2018
On
July 4, 2014, the Company issued 2,000,000 shares of common stock with a deemed value of $10,000 for intellectual property.
On
August 5, 2014, the Company amended its Articles of Incorporation to increase its authorized share capital to 250,000,000, $0.001
par value shares of common stock.
On
October 2, 2017, the Company agreed to issue 500,000 shares of common stock valued at $ 57,500 for consulting services, which
has been capitalized as part of investment in intellectual property.
There
were 133,400,000 shares of common stock issued and outstanding as of January 31, 2018.
NOTE
9 – INCOME TAXES
As
of January 31, 2018, the Company had net operating loss carry forwards of approximately $860,788 that may be available to reduce
future years’ taxable income in varying amounts through 2031. Future tax benefits which may arise, as a result of these
losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly,
the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The
provision for Federal income tax consists of the following:
|
|
|
January 31, 2018
|
|
January 31, 2017
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
|
Current Operations
|
|
$
|
225,418
|
|
|
$
|
16,290
|
|
Less: valuation allowance
|
|
|
(225,418
|
)
|
|
|
(16,290)
|
|
Net provision for Federal income taxes
|
|
$
|
—
|
|
|
$
|
—
|
The
cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
|
|
|
January 31, 2018
|
|
January 31, 2017
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
|
Net operating loss carryover
|
|
$
|
292,669
|
|
|
$
|
67,250
|
|
Less: valuation allowance
|
|
|
(292,669
|
)
|
|
|
(67,250)
|
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
Due
to the change in ownership provisions of the Tax Reform Act of 1986 , net operating loss carry forwards of approximately $860,788752,901
for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years. In December 2017, a law commonly known as the Tax Cuts and Jobs
Act ("TCJA") was enacted in the United States. Among other things, the TCJA reduces the U.S. corporate income tax rate to 21 percent
and implements a new system of taxation for non-U.S. earnings, including by imposing a one-time tax on the deemed repatriation
of undistributed earnings of non-U.S. subsidiaries. The Company is currently evaluating the effects of the TCJA, including the
one-time deemed repatriation tax and the remeasurement of our deferred tax assets and liabilities.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
JANUARY
31, 2018
NOTE
10 – COMMITMENTS AND CONTINGENCIES
Gimwork
Project LP agreed to provide office space without charge until 2015. The Company was required to pay the monthly rent of $4,500
starting in 2015. Rent expense of $58,500 was recorded as of January 31, 2016. The related party has agreed to waive accrued rent
of $ 58,500 as of January 31, 2016. The forgiveness of rent was recorded as an increase in additional paid in capital. As of February
1, 2016, no additional rent expense has been charged to the company.
Effective
May 3, 2017, the Company entered into an employment agreement with its new chief executive officer. Under the agreement, the Company
agreed to compensate the officer $36,000 annually and to provide him with 10 million shares of common stock, if the agreement
is renewed after the first year. For the period ended January 31, 2018 a pro-rated accrual of $333,333 of management compensation
has been recorded in the financial statements based on the share value of $ 0.05 per share and recorded as a credit to additional
paid in capital.
NOTE
11 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate
continuation of the Company as a going concern. However, the Company had no revenues as of January 31, 2018. The Company currently
has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover
operating costs over an extended period of time.
Management
anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses
The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light
of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or
become financially viable and continue as a going concern.
NOTE
12 – SUBSEQUENT EVENTS
In
accordance with ASC 855-10, the Company has analyzed its operations subsequent to January 31, 2018 through the date these financial
statements were issued and has determined that, aside from that set forth below, it does not have any material subsequent events
to disclose in these financial statements.
DRONE GUARDER,
INC.
(FORMERLY
VOPIA, INC.)
BALANCE
SHEETS
|
|
|
April
30, 2018
|
|
January
31, 2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
53,425
|
|
|
$
|
19,525
|
|
Prepaid expenses
|
|
|
158,754
|
|
|
|
|
|
Total Current Assets
|
|
|
212,179
|
|
|
|
19,525
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
|
|
|
|
|
|
Furniture and Equipment
|
|
|
1,050
|
|
|
|
1,050
|
|
Accumulated Depreciation
|
|
|
(1,050
|
)
|
|
|
(1,040)
|
|
Total Fixed Assets
|
|
|
0
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Investment in intellectual property
|
|
|
84,123
|
|
|
|
78,123
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
296,302
|
|
|
$
|
97,658
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIENCY)
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
$
|
25,321
|
|
|
$
|
33,016
|
|
Accrued expense-related party
|
|
|
500,000
|
|
|
|
333,333
|
|
Accrued interest
|
|
|
48,234
|
|
|
|
28,756
|
|
Convertible note payable, net of debt
discount and deferred financing costs of $297,328 (January 31, 2018 - $112,500)
|
|
|
257,672
|
|
|
|
112,500
|
|
Promissory notes payable
|
|
|
192,500
|
|
|
|
192,500
|
|
Advances from related party
|
|
|
18,000
|
|
|
|
18,000
|
|
Due to shareholder
|
|
|
2,308
|
|
|
|
2,308
|
|
Derivative Liability
|
|
|
443,067
|
|
|
|
85,560
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
1,487,102
|
|
|
|
805,973
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity (Deficiency)
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001; 250,000,000
shares authorized, 133,400,000 (January 31, 2018 – 133,400,000) shares issued and outstanding
|
|
|
133,400
|
|
|
|
133,400
|
|
Additional paid in capital
|
|
|
130,123
|
|
|
|
130,123
|
|
Deficit accumulated
|
|
|
(1,454,323)
|
|
|
|
(971,838)
|
|
Total Stockholders’ Equity (Deficiency)
|
|
|
(1,190,800
|
)
|
|
|
(708,315)
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’
Equity
|
|
$
|
296,302
|
|
|
$
|
97,658
|
The accompanying
notes are an integral part of these condensed financial statements
.
DRONE GUARDER,
INC.
(FORMERLY
VOPIA, INC.)
STATEMENTS OF OPERATIONS
|
|
|
Three
months
Ended
April
30, 2018
|
|
Three
months
Ended
April
30, 2017
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Depreciation
Expense
|
|
|
10
|
|
|
|
52
|
|
General and administrative
|
|
|
26,500
|
|
|
|
7,270
|
|
Bank fees
|
|
|
840
|
|
|
|
190
|
|
Consulting fees
|
|
|
2,000
|
|
|
|
2,000
|
|
Management compensation
|
|
|
184,667
|
|
|
|
—
|
|
Website
|
|
|
164
|
|
|
|
—
|
|
Professional
fees
|
|
|
14,546
|
|
|
|
31,855
|
|
|
|
|
|
|
|
|
|
|
TOTAL
OPERATING EXPENSES
|
|
|
228,727
|
|
|
|
41,367
|
|
|
|
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS
|
|
|
(228,727
|
)
|
|
|
(41,367)
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
(19,479
|
)
|
|
|
(2,873)
|
|
Amortization of
debt discount
|
|
|
(180,875
|
)
|
|
|
—
|
|
Amortization of
deferred financing
|
|
|
(16,897
|
)
|
|
|
|
|
Change
in derivative liability
|
|
|
(36,507)
|
|
|
|
—
|
|
TOTAL
OTHER INCOME (EXPENSE)
|
|
|
(253,758
|
)
|
|
|
(2,873)
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAXES
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$
|
(482,485
|
)
|
|
$
|
(44,240)
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE: BASIC AND DILUTED
|
|
|
*
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED (as adjusted for 20-1 forward stocks split)
|
|
|
133,400,000
|
|
|
|
132,900,000
|
* Less than $0.00 per share
The accompanying
notes are an integral part of these condensed financial statements
.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
STATEMENTS
OF CASH FLOWS
|
|
|
Three
months Ended
April
30, 2018
|
|
Three
months Ended
April
30, 2017
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
$
|
(482,485
|
)
|
|
$
|
(44,240)
|
|
Adjustments to reconcile
net loss to net cash (used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation Expense
|
|
|
10
|
|
|
|
52
|
|
Stock based compensation
|
|
|
166,667
|
|
|
|
—
|
|
Amortization of
deferred financing costs
|
|
|
16,897
|
|
|
|
|
|
Change in derivative
liability
|
|
|
36,507
|
|
|
|
—
|
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
|
|
Increase
(decrease) in accrued expenses
|
|
|
(7,695
|
)
|
|
|
3,534
|
|
Increase
in accrued interest
|
|
|
19,478
|
|
|
|
2,873
|
|
Increase
in prepaid expenses
|
|
|
(158,754
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS USED IN OPERATING ACTIVITIES
|
|
|
(228,500
|
)
|
|
|
(37,781)
|
|
|
|
|
|
|
|
|
—
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
—
|
|
Investment
in intellectual property
|
|
|
(6,000
|
))
|
|
|
(20,000)
|
|
CASH
FLOWS USED BY INVESTING ACTIVITIES
|
|
|
(6,000
|
)
|
|
|
(20,000)
|
|
|
|
|
|
|
|
|
—
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Deferred
financing costs
|
|
|
(43,600
|
)
|
|
|
|
|
Proceeds
from convertible note payable
|
|
|
330,000
|
|
|
|
—
|
|
Proceeds
from promissory note payable
|
|
|
—
|
|
|
|
75,000
|
|
CASH
FLOWS PROVIDED BY FINANCING ACTIVITIES
|
|
|
268,400
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH
|
|
|
33,900
|
|
|
|
17,219
|
|
Cash, beginning
of period
|
|
|
19,525
|
|
|
|
2,726
|
|
Cash,
end of period
|
|
$
|
53,425
|
|
|
$
|
19,945
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
—
|
|
|
$
|
—
|
|
Income
taxes paid
|
|
$
|
—
|
|
|
$
|
—
|
The accompanying
notes are an integral part of these condensed financial statements
.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
APRIL
30, 2018
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Drone
Guarder, Inc. (Formerly Vopia, Inc.) was incorporated as Blue Fashion Corp. under the laws of the State of Nevada on May 14, 2012.
The Company is an early stage security and surveillance company focusing on commercializing a drone enhanced home security
system as a turnkey solution. On August 5, 2014, the Company changed its name to Vopia, Inc. On March 24, 2017, the Company changed
its name to Drone Guarder, Inc.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements of Drone Guarder, Inc. 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 (“SEC”), . In the
opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the financial statements to
be not misleading have been reflected herein.
Accounting
Basis
The
Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”
accounting). The Company has adopted a January 31 fiscal year end.
Cash
and Cash
E
q
ui
v
a
lents
T
h
e
C
o
m
p
a
ny
c
o
nsi
d
ers
all
h
i
gh
ly li
qu
i
d
inves
t
m
e
n
ts
wit
h
t
h
e ori
g
i
n
a
l
m
atu
ritie
s
o
f
thre
e
m
on
t
hs
or
les
s
to
be ca
s
h
e
q
u
i
v
a
le
n
t
s.
The Company had $53,425 and $19,525 of cash as of April 30, 2018 and January 31, 2018, 2017, respectively.
Fair
Value of Financial Instruments
The
Company’s financial instruments consist of cash and cash equivalents and amounts due to shareholder. The carrying amount
of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these financial statements.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Stock-Based
Compensation
Stock-based
compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option
plan and has not granted any stock options.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
APRIL
30, 2018
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basic
Income (Loss) Per Share
Basic
income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted
average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt
or equity. There are no such common stock equivalents outstanding as of April 30, 2018.
Comprehensive
Income
The
Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances.
When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income
comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant
transactions that are required to be reported in other comprehensive income.
Recent
Accounting Pronouncements
Drone
Guarder, Inc. does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flow.
NOTE
3 – INVESTMENT IN INTELLECTUAL PROPERTY
On
February 24, 2017, the Company paid $20,000 as an intial payment toward software development related to the Drone Guarder technology .
In addition, the Company has paid $ 26,623 in additional software development costs to April 30, 2018. On October 2, 2017, the
Company issued 500,000 common shares of capital stock with a deemed value of $ 57,500 for services related to the development
of the intellectual property.
NOTE
4 – LOANS FROM DIRECTOR AND SHAREHOLDER
On
December 6, 2016, a shareholder paid expenses of $1,963 on behalf of the Company.
During
the year ended January 31, 2018 the shareholder paid net expenses of $ 100 that was not reimbursed as of April 30, 2018.
The
balance due to the shareholder was $2,308 and $2,208 as of April 30, 2018 and January 31,2018, respectively.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
APRIL
30, 2018
NOTE
5 – ADVANCES FROM RELATED PARTY
On
May 14, 2014 the Company received advances from a related party in the amount of $18,000. The advances are
unsecured,
non-interest bearing, with no specified terms of repayment.
On
November 20, 2014 the Company issued a promissory note payable in the amount of $10,000. The note bears interest at 10% per annum
and is due on demand. For the year ended January 31, 2015, this note was recorded in error as an advance from related party, when
it should have been recorded as a note payable. This has been reclassified on the balance sheet as of April 30, 2018 and January
31, 2018.
The
balance as of April 30, 2018 and January 31, 2018 of advances from related party was $18,000 and $18,000, respectively.
NOTE
6 – NOTES PAYABLE
On
November 20, 2014 the Company issued a promissory note payable in the amount of $10,000. The note bears interest at 10% per annum
and is due on demand. For the year ended January 31, 2015, this note was recorded in error as an advance from related party, when
it should have been recorded as a note payable. This has been reclassified on the balance sheet as of January 31, 2016.
On
June 24, 2015 the Company issued a promissory note payable in the amount of $12,500. The note bears interest at 10% per annum
and is due on demand.
On
December 10, 2015 the Company issued a promissory note payable in the amount of $15,000. The note bears interest at 10% per annum
and is due on demand.
On
December 23, 2016 the Company issued a promissory note payable in the amount of $25,000. The note bears interest at 10% per annum
and is due on demand.
On
February 6, 2017 the Company issued a promissory note payable in the amount of $55,000. The note bears interest at 10% per annum
and is due on demand.
On
April 19, 2017 the Company issued a promissory note payable in the amount of $20,000. The note bears interest at 10% per annum
and is due on demand.
On
May 24, 2017 the Company issued a promissory note payable in the amount of $20,000. The note bears interest at 10% per annum and
is due on demand.
On
July 5, 2017 the Company issued a promissory note payable in the amount of $20,000. The note bears interest at 10% per annum and
is due on demand.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
APRIL
30, 2018
NOTE
6 – NOTES PAYABLE (CONTINUED)
On
September 18, 2017 the Company issued a promissory note payable in the amount of $15,000. The note bears interest at 10% per annum
and is due on demand.
The
balance as of April 30, 2018 and January 31, 2018 of notes payable $192,500 and $62,500, respectively.
NOTE
7 – CONVERTIBLE NOTES PAYABLE
On
October 17, 2017, the Company entered into a financing arrangement in the principal amount of $445,000 consisting of a convertible
promissory note and warrants to purchase common shares of the company. As of April 30, 2018, the company has borrowed $225,000
of the available balance of $ 445,000. The outstanding principal of the Note bears interest at the rate of 10% per annum and is
due July 17, 2018. An original debt discount in the amount of $ 25,000 on the issuance of the note and will be amortized over
the life of the note.
The
Note is convertible at the option of the holder into common stock of the Company at a conversion price of $0.25 per share. A debt
discount related to the fixed rate conversion feature in the amount of $66,442 was recorded and is being amortized over the life
of the note. In addition, the holder of the note received warrants to purchase shares of the Company’s common stock
equal to $225,000 divided by the market value of the shares on the date the financing arrangement was entered into. Upon issue,
the Company recorded derivative liabilities for the conversion feature of the convertible notes and warrants, based up on the
Binomial Fair Value Model and using the following assumptions:
an exercise price of $0.25,
our stock price on the date of grant $.126 expected dividend yield of 0%, expected volatility of 251.50, risk free interest rate
of 1.25 for notes payable and 1.97% for warrants and an expected term of 0.75 years for notes payable and 5 years for warrants.
. Upon initial valuation, the derivative liability of $168,573 was recorded as a debt discount which is being amortized over the
life of the note payable.
During
the period ended April 30, 2018, $75,000 of the debt discount was amortized
On
January 17, 2018, the Company issued a convertible note payable the principal amount of $165,0000. principal of the Note bears
interest at the rate of 8% per annum and is due January 17, 2019. An original debt discount in the amount of $ 9,000 on the issuance
of the note and will be amortized over the life of the note.
The
Note is convertible at the option of the holder into common stock of the Company at a conversion price he lesser of the trading
price of the the common stock on the trading day prior to the closing date of the note or 50% of the lowest trading or closing
bid for the common stock during the 20 trading day period immediately prior to conversion.. Upon issue, the Company recorded derivative
liabilities for the conversion feature of the convertible notes and warrants, based up on the Binomial Fair Value Model and using
the following assumptions:
an exercise price of $0.052, our stock price on the date of grant
$.024, expected dividend yield of 0%, expected volatility of 113.400, risk free interest rate of 1.79 for notes payable , and
remaining term of 1.00 year. Upon initial valuation, the derivative liability of $156,000 was recorded as a debt discount which
is being amortized over the life of the note payable.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
APRIL
30, 2018
NOTE
7 – CONVERTIBLE NOTES PAYABLE (CONTINUED)
During the period ended April 30, 2018,
$48,125 of the debt discount was amortized
On
January 22, 2018, the Company issued a convertible note payable the principal amount of $165,0000. principal of the Note bears
interest at the rate of 12% per annum and is due October 22, 2018.
The “Conversion
Price” will be the lesser of (i) the lowest trading price of our common stock during the twenty-five-day trading period
prior to the issue date of the Note and (ii) 50% of the lowest trading price of our common stock during the twenty-five-day trading
period prior to the conversion. Upon issue, the Company recorded derivative liabilities for the conversion feature of the convertible
notes and warrants, based up on the Binomial Fair Value Model and using the following assumptions:
an
exercise price of $0.037, our stock price on the date of grant $.079, expected dividend yield of 0%, expected volatility of 113.400,
risk free interest rate of 1.79 for notes payable , and remaining term of .75 year. . Upon initial valuation, the derivative liability
of $165,000 was recorded as a debt discount which is being amortized over the life of the note payable.
During
the period ended April 30, 2018, $57,750 of the debt discount was amortized.
On
issuance of the notes payable, financing fees of $ 52,600 were deducted from loan proceeds. These have been deferred and are being
amortized over the terms of the loans. During the period ended April 30, 2018, $ 16,897 of the deferred financing costs was amortized.
NOTE
8 – COMMON STOCK
The
Company has 250,000,000, $0.001 par value shares of common stock authorized.
Effective
September 9, 2014 the Company’s board of directors and majority of its shareholders approved a 20 for 1 forward split of
the Company’s common stock.
On
October 2, 2017, the Company agreed to issue 500,000 shares of common stock valued at $ 57,500 for consulting services, which
has been capitalized as part of investment in intellectual property.
There
were 133,400,000 shares of common stock issued and outstanding as of April 30, 2018.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
APRIL
30, 2018
NOTE
9 – COMMITMENTS AND CONTINGENCIES
Effective
May 3, 2017, the Company entered into an employment agreement with its new chief executive officer. Under the agreement, the Company
agreed to compensate the officer $36,000 annually and to provide him with 10 million shares of common stock, if the agreement
is renewed after the first year. During the year ended January 31, 2018, a pro-rated accrual of $ 333,333 of management compensation
was recorded in the financial statements based on the share value of $ 0.05 per share and recorded as accrued expenses-related
party. For the period ended April 30, 2018 an additional accrual of of $ 167,000 of management compensation has been recorded
in the financial statements based on the share value of $ 0.05 per share.
NOTE
10 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate
continuation of the Company as a going concern. However, the Company had no revenues as of April 30, 2018. The Company currently
has limited working capital and has not completed its efforts to establish a stabilized source of revenues sufficient to cover
operating costs over an extended period of time.
Management
anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses
The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light
of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or
become financially viable and continue as a going concern.
NOTE
11 – SUBSEQUENT EVENTS
In
accordance with ASC 855-10, the Company has analyzed its operations subsequent to April 30, 2018 through the date these financial
statements were issued and has determined that, aside from that set forth below, it does not have any material subsequent events
to disclose in these financial statements.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
AVAILABLE INFORMATION
We file annual, quarterly and current
reports, proxy statements and other documents with the SEC. These filings contain important information which does not appear in
this prospectus. You may read and copy, at prescribed rates, any documents we have filed with the SEC at its Public Reference Room
located at 100 F Street, N.E., Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. We also file these documents with the SEC electronically. You can access the electronic versions
of these filings on the SEC’s website found at http://www.sec.gov.
We have filed with the Securities and
Exchange Commission (“SEC”) a registration statement for the securities on Form S-1 under the Securities Act. This
prospectus, which forms part of the registration statement, does not contain all the information contained in the registration
statement. Whenever a reference is made in this prospectus to any of our contracts or other documents, the reference may not be
complete and, for a copy of the contract or document, you should refer to the exhibits that are part of the registration statement.
You may inspect and copy the registration
statement at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549 upon payment of
certain prescribed fees. You may obtain information on the operation of the SEC’s public reference facilities by calling
the SEC at 1-800-SEC-0330. You may also access the registration statement electronically through the SEC’s Electronic Data
Gathering, Analysis and Retrieval, or EDGAR, system at the SEC’s website located at http://www.sec.gov.
Until _______________, all dealers that
effect transactions in these securities whether or not participating in this offering may be required to deliver a prospectus.
This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
|
Item 13.
|
Other Expenses of Issuance and Distribution
|
|
SEC Registration Fees
|
$
|
238.11
|
|
Accounting Fees and Expenses
*
|
|
5,000
|
|
Legal Fees and Expenses
*
|
|
5,000
|
|
Miscellaneous
*
|
|
5,000
|
|
|
|
|
|
Total
|
$
|
15,238.11
|
* Estimates
We will bear our fees and expenses incurred
in connection with the registration of shares of common stock in connection with this offering. The Selling Shareholders will bear
all selling and other expenses that they incur in connection with their sale of shares of common stock pursuant to the prospectus
which is part of this registration statement.
|
Item 14.
|
Indemnification of Directors and Officers.
|
Our officers and directors
are indemnified as provided by the Nevada Revised Statutes and our bylaws.
Under the governing Nevada
statutes, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless
it is specifically limited by a company's articles of incorporation. Our articles of incorporation do not contain any limiting
language regarding director immunity from liability. Excepted from this immunity are:
|
|
1.
|
a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest;
|
|
|
2.
|
a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful);
|
|
|
3.
|
a transaction from which the director derived an improper personal profit; and
|
Our bylaws provide that we
will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify
the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall
not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person
unless:
|
|
1.
|
such indemnification is expressly required to be made by law;
|
|
|
2.
|
the proceeding was authorized by our Board of Directors;
|
|
|
3.
|
such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law; or;
|
|
|
4.
|
such indemnification is required to be made pursuant to the bylaws.
|
Our bylaws provide that we
will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director
or officer, of the company, or is or was serving at the request of the company as a director or executive officer of another company,
partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request
therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be
indemnified under our bylaws or otherwise.
Our bylaws provide that no
advance shall be made by us to an officer of the company, except by reason of the fact that such officer is or was a director of
the company in which event this paragraph shall not apply, in any action, suit or proceeding, whether civil, criminal, administrative
or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or (b) if such quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad
faith or in a manner that such person did not believe to be in or not opposed to the best interests of the company.
|
Item 15.
|
Recent Sales of Unregistered Securities.
|
None.
|
Exhibit Number
|
Description
|
|
3.1
|
Articles of Incorporation(1)
|
|
3.2
|
Bylaws
|
|
3.3
|
Certificate of Change(3)
|
|
3.4
|
Certificate of Amendment (4)
|
|
3.5
|
Certificate of Designation(10)
|
|
4.1
|
8% Convertible Promissory Note(7)
|
|
4.2
|
Convertible Promissory Note(8)
|
|
5.1
|
Doney Law Firm opinion with consent to use**
|
|
10.1
|
Contribution Agreement(2)
|
|
10.2
|
Loan Forgiveness and General Release Agreement(2)
|
|
10.3
|
Executive Employment Agreement(5)
|
|
10.4
|
Securities Purchase Agreement(6)
|
|
10.5
|
Securities Purchase Agreement(7)
|
|
10.6
|
Registration Rights Agreement(7)
|
|
10.7
|
Securities Purchase Agreement(8)
|
|
10.8
|
Executive Employment Agreement(9)
|
|
23.1
|
Auditor consent**
|
**provided herewith
(1) Incorporated
by reference to the Registration Statement on Form S-1 filed on April 25, 2013
(2) Incorporated
by reference to the Form 8-K filed on July 11, 2014
(3) Incorporated
by reference to the Form 8-K filed on September 9, 2014
(4) Incorporated
by reference to the Form 8-K filed on August 29, 2014
(5) Incorporated
by reference to the Form 8-K filed on May 3, 2017
(6) Incorporated
by reference to the Form 8-K filed on October 30, 2017
(7) Incorporated
by reference to the Form 8-K filed on February 12, 2018
(8) Incorporated
by reference to the Form 8-K filed on February 14, 2018
(9) Incorporated
by reference to the Form 8-K filed on February 14, 2018
(10) Incorporated
by reference to the Form 8-K filed on July 16, 2018
The registrant hereby undertakes:
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(a)
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To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
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(i)
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to include any prospectus required by Section 10(a)(3) of the
Securities Act;
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(ii)
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to
reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
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(iii)
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to include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
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(b)
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That, for the
purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(c)
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To remove
from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
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(d)
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That,
for the purpose of determining liability under the Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part
of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however , that no statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first use.
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(e)
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Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other that the payment
by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit of proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of London, United Kingdom on August 28, 2018.
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Drone Guarder, Inc.
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By:
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/s/ Adam Taylor
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Adam Taylor
Chief Executive Officer, Principal Executive Officer, Chief
Financial Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director
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Drone Guarder, Inc.
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By:
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/s/ Johanne Ellis
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Johanne Ellis
Chief Operating Officer
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POWER OF ATTORNEY
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
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By:
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/s/ Adam Taylor
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Adam Taylor
Chief Executive Officer, Principal Executive Officer, Chief
Financial Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director
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August 28, 2018
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Grafico Azioni Drone Guarder (PK) (USOTC:DRNG)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Drone Guarder (PK) (USOTC:DRNG)
Storico
Da Nov 2023 a Nov 2024
