NOTES
TO THE FINANCIAL STATEMENTS
OCTOBER
31, 2018
(Unaudited)
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 $31,514 and $19,525 of cash as of October 31, 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
OCTOBER
31, 2018
(Unaudited)
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Prepaid
expenses
Prepaid
expenses, consisting primarily of cash advanced to officers to pay future expenses on behalf of the company, which will occur
within a year . During the period ended October 31, 2018 the company advanced to an officer $ 461,483 of which the officer
has paid expenses of $ $ 73,358 on behalf of the company as of October 31, 2018.
The
balance of prepaid expenses advanced to the officer was $388,125 and $nil as of October 31, 2018 and January 31,2018, respectively.
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 October 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
In May 2014, and later amended in August 2015,
the Financial Accounting Standards Board ("FASB") issued new Accounting Standards Update ("ASU") regarding
revenue recognition under GAAP. This new guidance will supersede nearly all existing revenue recognition guidance, and is effective
for public entities for annual and interim periods beginning after December 31, 2017. Early adoption is permitted for reporting
periods beginning after December 15, 2016. The Company adopted the standard effective January 1, 2018 with no impact n the Company's
financial statements.
NOTE
3 – INVESTMENT IN INTELLECTUAL PROPERTY
On
February 24, 2017, the Company paid $20,000 as an initial payment toward software development related to the Drone Guarder technology.
In addition, the Company has paid $18,394 in additional software development costs to October 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.
The Company
will amortize its acquired intangible assets with definite lives over the estimated economic life of the completed product once
it has been completed.
NOTE
4 – LOANS FROM DIRECTOR AND SHAREHOLDER
During
the year ended January 31, 2018, the shareholder paid net expenses of $100 that was not reimbursed as of October 31, 2018.
The
balance due to the shareholder was $2,308 and $2,308 as of October 31, 2018 and January 31, 2018, 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.
The
balance as of October 31, 2018 and January 31, 2018 of advances from related party was $18,000 and $18,000, respectively.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
OCTOBER
31, 2018
(Unaudited)
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.
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 October 31, 2018 and January 31, 2018 of notes payable $192,500 and $192,500, respectively.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
OCTOBER
31, 2018
(Unaudited)
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 October 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 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.
The
note payable is currently in default. As a result the lender is entitled to increase the interest rate on the note to 22% and
to increase the conversion eligible amount of the note by 15% for each major default.
As
of October 31, 2018 the derivative liability associated with the note payable and the warrants are $ 0 and the balance of debt
discount is $ 0.
On
January 17, 2018, the Company issued a convertible note payable the principal amount of $165,000. 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 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.
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 297,793 and there is an
unamortized balance of debt discount of $ 34,375.
On
January 22, 2018, the Company issued a convertible note payable the principal amount of $165,000. 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.
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 297,793 and there is an
unamortized balance of debt discount of $ 34,375.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
OCTOBER
31, 2018
(Unaudited)
NOTE
7 – CONVERTIBLE NOTES PAYABLE (CONTINUED)
On
May 8, 2018, the Company issued a convertible note payable the principal amount of $125,000. Principal of the Note bears interest
at the rate of 8% per annum and is due January 8, 2019.
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 $0.024, our stock price on the date of grant $.05, expected dividend yield of 0%, expected volatility of 137.100, risk
free interest rate of 2.44 for notes payable, and remaining term of .75 year. Upon initial valuation, the derivative liability
of $125,000 was recorded as a debt discount which is being amortized over the life of the note payable.
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 225,674 and there is an
unamortized balance of debt discount of $ 48,611.
On
May 10, 2018, the Company issued a convertible note payable the principal amount of $125,000. Principal of the Note bears interest
at the rate of 12% per annum and is due January 9, 2019.
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 $0.024, our stock price on the date of grant $.05, expected dividend yield of 0%, expected volatility of 137.100, risk
free interest rate of 2.44 for notes payable, and remaining term of .75 year. Upon initial valuation, the derivative liability
of $125,000 was recorded as a debt discount which is being amortized over the life of the note payable.
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 225,674 and there is an
unamortized balance of debt discount of $ 48,611.
On
August 1, 2018, Drone Guarder, Inc., a Nevada corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased
a convertible promissory note evidencing a loan of $153,000. On August 1, 2018, the Company issued Power Up a convertible note
totaling $153,000 (the “Power Up Note”). The Power Up Note entitles the holder to 12% interest per annum and matures
on May 15, 2019.
Power
Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day
period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert
the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of
4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates.
The beneficial ownership limitation may not be waived by Power Up. 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 $0.0143, our stock price on the date of grant $.022, expected dividend yield of 0%, expected
volatility of 131.300, risk free interest rate of 2.16 for notes payable , and remaining term of .80 year. . Upon initial valuation,
the derivative liability
of $149,884 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
OCTOBER
31, 2018
(Unaudited)
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $204,305 and there is an
unamortized balance of debt discount of $ 99,923.
On
August 29, 2018, Drone Guarder, Inc., a Nevada corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased
a convertible promissory note evidencing a loan of $78,000. On August 29, 2018, the Company issued Power Up a convertible note
of $78,000 (the “Power Up Note”). The Power Up Note entitles the holder to 12% interest per annum and matures on June
19, 2019.
Power
Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day
period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert
the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of
4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates.
The beneficial ownership limitation may not be waived by Power Up. 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 $0.0117, our stock price on the date of grant $.018, expected dividend yield of 0%, expected
volatility of 131.300, risk free interest rate of 2.16 for notes payable , and remaining term of .80 year. . Upon initial valuation,
the derivative liability of $76,411 was recorded as a debt discount which is being amortized over the life of the note payable.
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 104,122 and there is an
unamortized balance of debt discount of $ 50,941.
On
October 11, 2018, Drone Guarder, Inc., a Nevada corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased
a convertible promissory note evidencing a loan of $53,000. On August 1, 2018, the Company issued Power Up a convertible note
of $53,000 (the “Power Up Note”). The Power Up Note entitles the holder to 12% interest per annum and matures on July
30, 2019.
Power
Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day
period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert
the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of
4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates.
The beneficial ownership limitation may not be waived by Power Up. 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 $0.0061, our stock price on the date of grant $.012, expected dividend yield of 0%, expected
volatility of 131.300, risk free interest rate of 2.44 for notes payable , and remaining term of .80 year. . Upon initial valuation,
the derivative liability of $70,200 was recorded as a debt discount which is being amortized over the life of the note payable.
As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 75,335 and there is an
unamortized balance of debt discount of $ 35,344.
On
issuance of the notes payable, financing fees and legal fees of $ 93,600 were deducted from loan proceeds. These have been deferred
and are being amortized over the terms of the loans. During the period ended October 31, 2018, $ 67,529 of the deferred financing
costs was amortized. The balance of deferred financing costs as at October 31, 2018 is $ 26,071.
During the period
ended October 31, 2018, the Company issued 9,550,000 shares of common stock in settlement of promissory notes in the amount of
$43,900.
DRONE
GUARDER, INC.
(FORMERLY
VOPIA, INC.)
NOTES
TO THE FINANCIAL STATEMENTS
OCTOBER
31, 2018
(Unaudited)
NOTE
8 – EQUITY
The
Company has 5,000,000,000, $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.
During the period
ended October 31, 2018, the Company issued 9,550,000 shares of common stock in settlement of promissory notes in the amount of
$43,900
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.
On
July 16, 2018, we issued to an officer 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, valued on the date of issuance at $520,000.
There
were 142,950,000 shares of common stock and 1,000,000 shares of Series A Preferred Stock issued and outstanding as of October
31, 2018.
NOTE 9– RELATED PARTY TRANSACTIONS
During
the year ended January 31, 2018 the shareholder paid net expenses of $100 that was not reimbursed as of October 31, 2018.
The
balance due to the shareholder was $2,308 and $2,308 as of October 31, 2018 and January 31, 2018, respectively.
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.
The
balance as of October 31, 2018 and January 31, 2018 of advances from related party was $18,000 and $18,000, respectively.
Prepaid
expenses, consisting primarily of cash advanced to officers to pay future expenses on behalf of the company, which will occur
within a year. During the period ended October 31, 2018 the company advanced to an officer $461,483 of which the officer has paid
expenses of $73,358 on behalf of the company as of October 31, 2018.
The
balance of prepaid expenses to the officer was $388,125 and $nil as of October 31, 2018 and January 31, 2018, respectively.
On
July 16, 2018, we issued to an officer 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, valued on the date of issuance at $520,000.
NOTE
10 – 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 $0.052 per share and recorded as accrued expenses-related
party. For the period ended October 31, 2018 an additional accrual of $187,000 of management compensation has been recorded in
the financial statements based on the share value of $0.052 per share value when the shares were issued. On May 25, 2018, the
Company renewed the employment agreement of the officer and the shares were issued.
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 October 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 October 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.
Subsequent
to October 31, 2018, the Company issued 30,800,000 shares of common stock in settlement of promissory notes payable in the amount
of $39,800.
On
December 18, 2018, the Company increased the total number of authorized shares of common stock to 5,000,000,000.