Washington, D.C. 20549
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the last 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]
Indicate by check mark if there is no disclosure of delinquent files in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of June 30, 2015, the aggregate market value of shares held by non-affiliates (based on the closing price of $0.021 on that date) was approximately $1,031,503.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.
This Amendment No. 3 (Amendment No. 3) to the Companys Annual Report on Form 10-K and Form 10-K/A for the year ended June 30, 2015, filed with the U.S. Securities and Exchange Commission (the SEC) on September 28, 2015, September 30, 2015 and February 17, 2016 respectively, (the Original Filings), to include the Financial Statements including the Report Of Independent Registered Public Accounting Firm in its entirety.
Except as described above, this Amendment No. 3 does not amend, update or change any other items or disclosures contained in the Original Filings as amended by this Amendment No. 3, including the previously reported financial statements and other financial disclosures included in the Original Filings, and accordingly, this Amendment No. 3 does not reflect or purport to reflect any information or events occurring after the original filing date or modify or update those disclosures affected by subsequent events. Accordingly, this Amendment No. 3 should be read in conjunction with our other filings with the SEC.
See Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
See Accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
AS-IP Tech, Inc. (AS-IP, the "Company") formerly ASI Entertainment, Inc., was incorporated in the State of Delaware on April 29, 1998. AS-IP owns the intellectual property in the SafeCell product.
Basis of Presentation
The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America. The financial statements are expressed in United States dollars.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company has a limited operating history and limited funds and has an accumulated deficit of $9,094,959 at June 30, 2015. These factors, among others, may indicate that the Company will be unable to continue as a going concern.
The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions. The Company expects to generate revenue in the future from license and royalty fees from its SafeCell technology. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.
The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should the Company be unable to continue as a going concern. The continuation as a going concern is dependent upon the ability of the Company to meet our obligations on a timely basis, and, ultimately to attain profitability.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. At certain times, cash in bank may exceed the amount covered by FDIC insurance. At June 30, 2015 and 2014 there were deposit balances in a United States bank of $222 and $12,348 respectively.
F-6
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
Income tax
The Company accounts for income taxes under FASB ASC 740 "Income Taxes". Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
At June 30, 2015 the Company had net operating loss carryforwards of $8,991,319 which begin to expire in 2019. The deferred tax asset created by the U.S. net operating losses has been offset by a 100% valuation allowance of $2,015,351 in 2015, compared to an allowance of $1,997,351 in 2014. The change in the valuation allowance for U.S. tax purposes in 2015 and 2014 was $18,000 and $67,310, respectively.
Stock-based compensation
The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.
Per Share Data
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
F-7
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
Revenue recognition
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Revenue is recognized on an accrual basis as earned under contract or license agreements. License fees are taken up in the period they become due. Revenue from ongoing license fees is recognized on an accrual basis in the period it is earned and invoiced.
Financial instruments
The Company has adopted the provisions of ASC Topic 820, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entitys own assumptions (unobservable inputs). The hierarchy consists of three levels:
Level one - Quoted market prices in active markets for identical assets or liabilities;
Level two - Inputs other than level one inputs that are either directly or indirectly observable; and
Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
All of the Companys financial instruments are level one and are carried at market value, requiring no adjustment to book value. The financial instruments were deemed to qualify as that classification because their value was determined by the price of identical instruments traded on an active exchange.
Products and services, and geographic areas
Company sales will be derived from license and management fees from the Company's technology. The technology is being marketed internationally under license agreements. To date, the Company has received license fees from North America, Asia and Australia.
Stock Options
The Company has no outstanding stock options.
F-8
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
Recent Accounting Pronouncements
The company has evaluated the recent accounting pronouncements through ASU 2013-09 and believes that none of them have a material effect on the Companys financial statements.
Long-Lived Assets
In accordance with ASC 360, Property Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
Goodwill, Trademarks and Other Intangible Assets
In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, we classify intangible assets into three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. For intangible assets with definite lives, tests for impairment must be performed if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and goodwill, tests for impairment must be performed at least annually or more frequently if events or circumstances indicate that assets might be impaired.
When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of future cash flows. If the sum of the expected future cash flows is less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. We test intangible assets determined to have indefinite useful lives, including trademarks, franchise rights and goodwill, for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired.
Intangible Assets
In the year ended June 30, 2012, the Company took up Intangible Assets of $4,614 which represented part of the cost of obtaining the patent for the Companys SafeCell technology in China. The Company did not made any adjustment to the balance in the year ended June 30, 2014 but has written off the full amount in the year ended June 30, 2015.
F-9
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
License Agreements
The Company has the following marketing arrangements in place:
a. ASiQ Ltd, a Corporation with similar management and ownership to AS-IP, for the global marketing and implementation of SafeCell.
Material terms:
i. Date of agreement - May 29, 2008
ii. Term - ongoing
iii. License fee - ASiQ will pay the Company a license fee of 10% of the revenue generated by SafeCell and received by ASiQ.
iv. As required by the Company, ASiQ will develop, manufacture and market SafeCell to the airline industry.
v. ASiQ will secure the services of Ron Chapman to assist in any product development and marketing.
vi. Should ASiQ develop other applications for the SafeCell concept outside the aviation industry, ASiQ and the Company will enter into separate agreements setting out the basis on which ASiQ can use the SafeCell concept as set out in the International PCT application, such agreement will include license and royalty payments payable under the agreement.
vii. The agreement was originally non-exclusive but subsequently changed to exclusive
b. Under a Heads of Agreement dated February 11, 2013, subsequently formalized in an Agreement dated March 25, 2013, it was agreed:
i) The Companys wholly owned subsidiary, AS-IP Finance Inc. (AS-IP) will manage the billing and credit card collections for the North American telecommunication services designated BizjetMobile and iJetCell on behalf of ASiQ.
ii) AS-IP will receive an administration fee of 5% of the net proceeds from the BizjetCell and iJetCell services, in addition to the 10% royalty the Company was currently entitled to receive.
This Agreement lapsed effective September 25, 2014, as ASiQ no longer requires the Company to manage the billings for its North American operations, following establishment of its own US subsidiary.
F-10
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - RELATED PARTY TRANSACTIONS
As of June 30, 2015 and 2014, the Company has incurred as "related parties payables", $268,670and $261,473 respectively, which are due mainly to advances made by the CEO to pay for operating expenses.
As of June 30, 2015 and 2014, the Company had "due to related parties" of $228,811 which are advances made by related parties to provide capital.
The related parties payables and due to related parties balances are non-interest bearing, unsecured and due on demand. Due to the short term structure of these notes the company does not impute interest expense or recognize a discount on the face value of the notes.
The Company in 2015 and 2014 incurred expenses of approximately $60,000 and $60,000 respectively to entities affiliated through common stockholders and directors for management expenses.
NOTE 3 - LEASE COMMITMENTS
The Company has entered into an arrangement under which it uses premises at A$3,200 per annum and has not entered into a formal lease agreement.
NOTE 4 - STOCKHOLDERS' EQUITY
Common stock
The Company as of June 30, 2013 had 100,000,000 shares of authorized common stock, $.0001 par value, with 81,577,481 shares issued and outstanding, and 50,000 shares in treasury. Treasury shares are accounted for by the par value method.
During the year ended June 30, 2014, the Company issued a total of 304,745 shares for services valued at $0.021 per share.
During the year ended June 30, 2014, the Company issued a total of 3,860,461 shares for $80,699 in cash valued at $0.021 per share.
During the year ended June 30, 2014, the Company increased the authorized common stock from 100,000,000 shares to 500,000,000 shares.
During the year ended June 30, 2015, the Company issued a total of 2,500,000 bonus shares for fund raising valued at $0.025 per share.
During the year ended June 30, 2015, the Company issued a total of 2,000,000 shares for reduction of related accounts payable valued at $0.021 per share.
During the year ended June 30, 2015, the Company issued a total of 96,000 shares for reduction of accounts payable valued at $0.021 per share.
F-11
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
Preferred stock
As of June 30, 2015, the Company had 50,000,000 shares of authorized preferred stock, $.0001 par value, with no shares issued and outstanding.
Subscriptions payable
As of June 30, 2015, the Company has a total of 4,965,556 shares payable to an individual with a net value of $91,380.
NOTE 5 - BAD DEBTS
The Company evaluates the need for an allowance for doubtful accounts on a regular basis. As of June 30, 2015 and 2014, the Company determined that an allowance was not needed.
F-12
On September 24, 2015, the Company announced that it had been advised that the Agreement with its former subsidiary, ASiQ Limited under which the Company was responsible for managing certain services provided to the business aircraft market in North American on behalf of ASiQ, would not be renewed when it expired on September 25, 2014.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AS-IP TECH, INC.
Pursuant to 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.
I, Philip A. Shiels, certify that:
1. I have reviewed this annual report on Form 10-K/A of AS-IP Tech, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Philip A. Shiels
I, Philip A. Shiels, certify that:
1. I have reviewed this annual report on Form 10-K/A of AS-IP Tech, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Philip A. Shiels
(18 U.S.C. SECTION 1350)
In connection with the Annual Report of AS-IP Tech, Inc., a Delaware corporation (the "Company"), on Form 10-K/A for the period ending June 30, 2015, as filed with the Securities and Exchange Commission (the "Report"), Philip A. Shiels, Chief Executive Officer of the Company does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to his knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Philip A. Shiels
[A signed original of this written statement required by Section 906 has been provided to AS-IP Tech, Inc. and will be retained by AS-IP Tech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]
(18 U.S.C. SECTION 1350)
In connection with the Annual Report of AS-IP Tech, Inc., a Delaware corporation (the "Company"), on Form 10-K/A for the period ending June 30, 2015, as filed with the Securities and Exchange Commission (the "Report"), Philip A. Shiels, Chief Financial Officer of the Company does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to his knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Philip A. Shiels
[A signed original of this written statement required by Section 906 has been provided to AS-IP Tech, Inc. and will be retained by AS-IP Tech, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]