UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the Transition Period from to .
Commission File Number
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| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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. ☒
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
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:
| Large accelerated filer | ☐ | ☒ | |
| Accelerated filer | ☐ | Smaller reporting company | |
| Emerging Growth company | |||
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 pursuant
to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as
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Yes
Indicate the number of shares outstanding of each
of the issuer’s classes of common stock, as of the latest practicable date. As of August 21, 2023, we had
TABLE OF CONTENTS
| PART I—FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements. | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 11 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 14 |
| Item 4. | Controls and Procedures. | 14 |
| PART—II OTHER INFORMATION | ||
| Item 1. | Legal Proceedings. | 15 |
| Item 1A. | Risk Factors. | 15 |
| Item 2. | Unregistered Sales of Securities and Use of Proceeds. | 15 |
| Item 3. | Defaults Upon Senior Securities. | 15 |
| Item 4. | Mine Safety Disclosure. | 15 |
| Item 5. | Other Information. | 15 |
| Item 6. | Exhibits | 15 |
| Signatures | 16 | |
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Internet Sciences Inc.
Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Total Current Assets | ||||||||
| Intellectual property - software | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accounts payable and accrued liabilities – related party | ||||||||
| Due to related party | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Common Stock, $ | ||||||||
| Common Stock Class A, | ||||||||
| Common Stock Class B, | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ||||||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL Liabilities and Stockholders’ Deficit | $ | $ | ||||||
See accompanying notes to consolidated financial statements (unaudited)
1
Internet Sciences Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Compensation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Net loss before taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss attributable to: | ||||||||||||||||
| Internet Sciences, Inc. | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non-controlling interest | ||||||||||||||||
| Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
See accompanying notes to consolidated financial statements (unaudited)
2
Internet Sciences Inc.
Consolidated Statement of Changes in Stockholders’ Deficit
Three and Six Months Ended June 30, 2023 and 2022
(Unaudited)
| Common Stock Class A | Common Stock Class B | Additional Paid in | Accumulated | Non- Controlling | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Deficit | |||||||||||||||||||||||||
| Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Issuance of common shares for compensation-services | ||||||||||||||||||||||||||||||||
| Issuance of common shares for compensation-directors | ||||||||||||||||||||||||||||||||
| Issuance of common shares for cash | ||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Issuance of common shares for compensation-services | ||||||||||||||||||||||||||||||||
| Issuance of common shares for compensation-directors | ||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Issuance of common shares for compensation-services | ||||||||||||||||||||||||||||||||
| Issuance of common shares for acquisition of intellectual property-software | ||||||||||||||||||||||||||||||||
| Issuance of common shares for debt, related party | ||||||||||||||||||||||||||||||||
| Issuance of common shares for cash | ||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at March 31,2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Forgiveness of debt, related party | ||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
See accompanying notes to consolidated financial statements (unaudited)
3
Internet Sciences Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase in accounts payable and accrued liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from related party | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash for the period | ( | ) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Schedule of Non-cash Investing and Financing Activities: | ||||||||
| Issuance of common shares for repayment of debt, related party | $ | $ | ||||||
| Issuance of common shares for acquisition of intellectual property – software | $ | $ | ||||||
| Forgiveness of accrued wages, related party | $ | $ | ||||||
See accompanying notes to consolidated financial statements (unaudited)
4
Internet Sciences Inc.
Notes to Consolidated Financial Statements
For the Six Months Ended June 30, 2023 and 2022
(Unaudited)
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Internet Sciences Inc. (“ISI” or the “Company”) was originally incorporated as Luxury Trine Digital Media Group, Inc. (“Luxury Trine”) in the State of Delaware on May 20, 2016. Its consolidated Variable Interest Entity (“VIE”), Trine Digital Broadcasting Ltd., was incorporated in the United Kingdom on July 3, 2017.
On October 5, 2018, the Company changed its name to Internet Sciences Inc., which is an early-stage emerging diversified information and communications technology company specializing in cutting-edge digital transformation services, including new-media technology; telecommunication and network carrier services; IoT-enabled solutions; and managed ICT, managed cloud services, data centers and co-location services.
Based in New York, NY, ISI seeks to operate internationally with a global team known for its technological expertise, deep industry knowledge, world-class research and analytical capabilities, and innovative mindset.
ISI seeks to transform corporations, enterprises and government entities by providing best-in-class solutions, rooted in and driven by the technology, data, and organizational strategy required for operational excellence. Our interdisciplinary teams work in close collaboration with clients, helping them to solve their biggest problems utilizing a user-centric, data-driven approach focusing on creating seamless unified experiences across all digital, communication and physical touchpoints.
The Company’s principal place of business is 429 Madison Avenue 5th Floor, New York, NY 10065.
Principles of Consolidation
Schedule of consolidated financial statements
| Ownership | ||||||
| Country | Interest | |||||
| Trine Digital Broadcasting Ltd (TDB) | % | |||||
| Institute of Technology, Informatics &Computer Analytics LLC (IoTICA) | % | |||||
| Analygence Limited (AL) | % | |||||
In June 2020, AL was formed in UK as an extension of IoTICA and as a response to the limitations of travel between the UK and US caused by the COVID-19 pandemic. There were no operations through TDB and AL for the six months ended June 30, 2023 or 2022. There were no assets and liabilities of TDB and AL as of June 30, 2023 or December 31, 2022.
In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated in consolidation.
Foreign Currency
The Company’s functional and reporting currency is the United States dollar. The functional currency of TDB and AL is the British pound. On consolidation, the subsidiaries translate their assets and liabilities to U.S. dollars using foreign exchange rates which prevailed at the balance sheet date and translate their revenues and expenses using average exchange rates during the period. Gains and losses arising on settlement of foreign currency denominated transactions are included in earnings, while differences arising from translation of balances are included in the other comprehensive income/loss. No foreign currency translation or transactions gains or losses were recognized during the six months ended June 30, 2023, or 2022 due to the absence of operations in the UK subsidiaries.
5
Basis of Presentation
The accompanying consolidated financial statements (unaudited) are condensed and have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the six months ended June 30, 2023, are not necessarily indicative of the operating results for the full year ended December 31, 2023.
In the opinion of management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position, results of operations, and cash flows as of and for the six months ended June 30 2023, and 2022, have been made.
Variable Interest Entity
ASC 810-10-25-38, “Consolidation of Variable
Interest Entities,” requires a variable interest entity (“VIE”) to be consolidated by a company if that company absorbs
a majority of the VIE’s expected losses and/or receives a majority of the entity’s expected residual returns as a result of
holding variable interests. Trine Digital Broadcasting is a variable interest entity as defined by ASC 810-10-25-38. As ISI owns
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management in the accompanying financial statements include, but are not limited to, the fair value of stock-based compensation and the deferred tax asset valuation allowance.
Cash and Cash Equivalents
All highly liquid investments with an original maturity of three months
or less are considered to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s
accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $
Fair Value of Financial Instruments
The Company follows ASC 820, “Fair Value Measurements and Disclosures,” for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
6
ASC 825-10-25 Fair Value Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
The carrying amounts reported in the balance sheet for the Company’s current assets and liabilities approximate their estimated fair market value based on the short-term maturity of these instruments.
Revenue Recognition
The Company plans to follow the guidance of ASC 606, “Revenue from Contracts with Customers,” and will recognize revenue from the sale of products and services in accordance with the following five criteria:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Company plans to recognize revenue as it transfers control of promised services to its customers. The amount of revenue recognized will reflect the consideration to which the Company expects to be entitled in exchange for these services.
Income Taxes
Income taxes are accounted for under the asset and liability method as prescribed by ASC 740, “Income Taxes .” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s opinion it is likely that some portion or the entire deferred tax asset will not be realized.
ASC 740 related to the accounting for uncertainty
in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than
not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the
technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine
the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is
greater than
Stock-Based
Stock-based compensation is accounted for based on the requirements of ASC 718, “Compensation – Stock Compensation,” which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the individual or entity is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of services received in exchange for an award based on the grant-date fair value of the award.
7
Net Loss per Share
ASC 260 “Earnings Per Share,” requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period, unless the result is anti-dilutive.
| Schedule of Earnings Per Share | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Net loss per common shares outstanding: | ||||||||||||||||
| Common stock -Class A | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Common stock -Class B | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Class A and B combined | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding: | ||||||||||||||||
| Class A common stock | ||||||||||||||||
| Class B common stock | ||||||||||||||||
| Total weighted average shares outstanding | ||||||||||||||||
For the six months ended June 30, 2023 and 2022, there were no potentially dilutive securities outstanding.
Software Costs
The Company accounts for software costs in accordance with several accounting pronouncements, including ASC 730, “Research and Development,” ASC 350-40, “Internal-Use Software,” ASC 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and ASC 350-50, “Website Development Costs.”
Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development.
The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales. Website development costs are capitalized under the same criteria as our marketed software, and purchased software is capitalized at cost and amortized over its useful life.
Impairment of Long-lived Assets
Long-lived assets, such as fixed assets, software and identifiable intangibles, are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.
8
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 3).
Recent Accounting Pronouncements
The Company has reviewed and implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 2 – GOING CONCERN CONSIDERATIONS
The accompanying consolidated financial statements
are prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company had an accumulated deficit of $
The global outbreak of the novel coronavirus (COVID-19) has led to severe disruptions in general economic activities, as businesses and governments have taken broad actions to mitigate this public health crisis. While the COVID-19 pandemic has not had a material adverse impact on our operations to date, these conditions could significantly negatively impact the Company’s business in the future. The Company intends to continue to monitor the situation and may adjust its current business plans as more information and guidance become available.
The extent to which the COVID-19 outbreak ultimately impacts the Company’s business, future revenues, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity and longevity, the actions to curtail the virus and treat its impact (including an effective vaccine), and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, the pandemic may result in a significant disruption of global financial markets, which may reduce the Company’s ability to access capital or its customers’ ability to pay for past or future purchases, which could negatively affect the Company’s liquidity.
NOTE 3 – RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2023 and
2022, the Company received advances from its CEO totaling $
At December 31, 2022, the Company owed $
NOTE 4 – EQUITY
The Company has authorized
9
Common Stock - Class A
As of June 30, 2023 and December 31, 2022, the
Company had
During the six months ended June 30, 2023, the
Company issued
During the six months ended June 30, 2022, the
Company issued
Common Stock - Class B
As of June 30, 2023 and December 31, 2022,
the Company had
NOTE 5 – INTELLECTUAL PROPERTY
During the
six months ended June 30, 2023, the Company acquired software from a third-party in exchange for
NOTE 6 – SUBSEQUENT EVENTS
Management has assessed subsequent events from June 30, 2023 through the date the financial statements were issued, and noted no additional items requiring disclosure.
10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis
This section of Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Overview
Internet Sciences Inc. (“ISI” or the “Company”) was originally incorporated as Luxury Trine Digital Media Group, Inc. in the State of Delaware on May 20, 2016. On October 5, 2018, the Company changed its name to Internet Sciences Inc.
The consolidated financial statements include the following subsidiaries:
| Ownership | ||||||
| Country | Interest | |||||
| Trine Digital Broadcasting Ltd (TDB) | United Kingdom | 49 | % | |||
| Institute of Technology, Informatics &Computer Analytics LLC (IoTICA) | USA | 100 | % | |||
| Analygence Limited (AL) | United Kingdom | 100 | % | |||
ISI is an early-stage emerging diversified information and communications technology company specializing in cutting-edge digital transformation services, including new-media technology; telecommunication and network carrier services; IoT-enabled solutions; and managed ICT, managed cloud services, data centers and co-location services.
Based in New York, N.Y., ISI seeks to operate internationally with a global team known for its technological expertise, deep industry knowledge, world-class research and analytical capabilities, and innovative mindset.
ISI seeks to transform corporations, enterprises and government entities by providing best-in-class solutions, rooted in and driven by the technology, data, and organizational strategy required for operational excellence. Our interdisciplinary teams work in close collaboration with clients, helping them to solve their biggest problems utilizing a user-centric, data-driven approach focusing on creating seamless unified experiences across all digital, communication and physical touchpoints.
The Company’s principal place of business is 667 Madison Avenue, New York, New York 10065
Our Outlook
We are an early-stage company since we have not commenced planned principal operations. Our activities since inception include devoting substantially all of our efforts to business planning and development. Additionally, we have allocated a substantial portion of our time and investment to the completion of our development activities to launch our marketing plan and generate revenues and to raising capital. We have generated minimal revenue from operations. The Company’s activities during this early stage are subject to significant risks and uncertainties.
There is currently no public market for our common stock. While the Company believes in the viability of its strategy to initiate sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The financial statements do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
11
Results of Operations
Three and Six Months Ended June 30, 2023, compared to the Three and Six Months Ended June 30, 2022
Revenue
The Company is considered to be an early-stage company. There were no revenues generated during the six months ended June 30, 2023 or 2022.
Operating Expenses and Loss from Operations
Total operating expenses and loss from operations for the three months ended June 30, 2023 were $17,975, a decrease of $8,242 from total operating expenses and loss from operations for the comparable three months ended June 30, 2023 of 26,217. The decrease is due primarily to the Company issuing $9,375 in stock-based compensation to its directors during the three months ended June 30, 2022, while issuing no stock-based compensation to directors during the three months ended June 30, 2023.
Total operating expenses and loss from operations for the six months ended June 30, 2023 were $60,827, an increase of $19,455 from total operating expenses and loss from operations for the comparable six months ended June 30, 2022 of $41,372. This increase is primarily attributable to the Company issuing $27,512 in stock-based compensation during the six months ended June 30, 2022, while issuing $29,000 in stock-based compensation during the six months ended June 30, 2023. The Company also incurred additional professional fees during the six months ended June 30, 2023 as the Company is actively seeking financing and other opportunities to advance its business.
Other Income (Expense)
There was no other income (expense) for the three and six months ended June 30, 2023 and 2022.
Net Loss and Net Comprehensive Loss
We reported a net loss and net comprehensive loss of $17,975 and $26,217 for the three months ended June 30, 2023 and 2022, respectively, and $60,827 and $41,372 for the six months ended June 30, 2023 and 2022, respectively, due to the factors noted above.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. At June 30, 2023 and December 31, 2022, we had a cash balance of $630 and $0 respectively, and our working capital deficit was $62,820 and $182,828, respectively.
Accrued expenses and accounts payable were $63,450 and $61,935 as of June 30, 2023, and December 31, 2022, respectively. Accrued expenses and accounts payable for related parties were $0 and $4,985 as of June 30, 2023 and December 31, 2022, respectively. We also owed $0 and $115,908 at June 30, 2023 and December 31, 2022, respectively, to our CEO for cash advances or payments of expenses in the Company’s behalf. During the 6 months ended June 30, 2023, the CEO forgave the $4,985 in accrued expenses and was issued 116,000 shares of the Company’s Class A common stock in full satisfaction of the amounts owed.
The Company is considered to be an early-stage company and we had no sales during the six months ended June 30, 2023 and 2022. Thus, net sales are not sufficient to fund our operating expenses. We will need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We do not anticipate we will be profitable in 2023. Therefore, our operations will be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. If we are successful in securing additional working capital, we intend to increase our marketing efforts to grow our revenues.
Operating Activities
Net cash flows used in operating activities for the six months ended June 30, 2023 amounted to $30,312 and was attributable to our net loss of $60,827, offset by stock-based compensation of $29,000 and an increase in accounts payable and accrued liabilities of $1,515.
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Net cash flows used in operating activities for the six months ended June 30, 2022 amounted to $8,016, which was attributable to our net loss of $41,372, offset by stock-based compensation of $27,512 and an increase in accounts payable and accrued liabilities of $5,844.
Investing Activities
The Company did not engage in any investing activities during the six months ended June 30, 2023 or 2022.
Financing Activities
Net cash flows provided by financing activities were $30,942 for the six months ended June 30, 2023, consisting of a $92 advance from our CEO and the issuance of 24,200 shares of Class A common stock for proceeds of $30,850.
Critical Accounting Policies and Estimates
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management’s applications of accounting policies. Critical accounting policies for our company include revenue recognition and accounting for stock-based compensation, use of estimates, and income taxes.
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management in the accompanying financial statements include but are not limited to the fair value of stock-based compensation and the deferred tax asset valuation allowance.
Recent Accounting Pronouncements and Adoption of New Accounting Principles
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off Balance Sheet Arrangements
None
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s principal executive officer and principal financial officer. Based upon that evaluation, our company’s principal executive officer and principal financial officer concluded that as of June 30, 2023 our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Currently we are not involved in any pending litigation or legal proceeding.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Securities and Use of Proceeds.
No shares of common stock were sold or otherwise issued by the Company during the three months ended June 30, 2023 or subsequently through the date of this filing.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosure.
None
Item 5. Other Information.
None
Item 6. Exhibits.
The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:
| * | Included in Exhibit 31.1 |
| ** | Included in Exhibit 32.1 |
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SIGNATURES
Pursuant to the requirements 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.
| Internet Sciences Inc. | ||
| Date: August 21, 2023 | By: | /s/ Lynda Chervil |
| Lynda Chervil | ||
| Director, Chief Executive Officer, President (Principal Executive Officer) and Treasurer |
||
| Date: August 21, 2023 | By: | /s/ Dennis W. Irby |
| Dennis W Irby | ||
| Chief Financial Officer and Principal Accounting Officer Director |
||
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