NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
NOTE 1. NATURE OF OPERATIONS
Nature of Business
Atlas Technology Group, Inc., a Florida corporation, (“Atlas”, “the Company”, “We", "Us" or “Our’) is a publicly quoted shell company seeking to merge with an entity with experienced management and opportunities for growth in return for shares of our common stock to create values for our shareholders. No potential merger candidate has been identified at this time.
Effective May 29, 2021, we entered into an agreement with Corporate Excellence Consulting Inc. (“CECI”), our then controlling shareholder, and Mr. David Cutler (“Mr. Cutler”) (“the Agreement”) under which:
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CECI surrendered, and we cancelled, the single outstanding share of Series A Preferred Stock. The single outstanding share of Series A Preferred Stock carried super preferred voting rights enabling the holder to vote the equivalent of 61% of all voteable preferred and common shares issued and outstanding,
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We issued a new share of Series A Preferred Stock, carrying the same super preferred voting rights described above, to Mr. Cutler. As a consequence of this issuance, Mr. Cutler became our new controlling shareholder,
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Mr. Cutler was appointed as a director of ours and as our Chief Financial Officer,
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Mr. Cutler paid $5,000 to CECI on our behalf as a partial repayment of the outstanding fees due by us to CECI,
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Mr. Cutler undertook to pay a further $30,000 on our behalf as a full and final settlement of the outstanding fees due by us to CECI, such payment to be made on the approval by FINRA of a proposed name change and reverse stock split,
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CECI agreed to accept the $35,000 to be paid to them by Mr. Cutler on our behalf in full and final settlement of the outstanding fees due by us to CECI.
The initial payment of $5,000 to CECI was made by Mr. Cutler as agreed.
There is no guarantee that it will be possible to complete the remaining terms of the Agreement.
History
Atlas was incorporated in the state of Nevada in August 1996 under the name Pan World Corporation. In November 1999, the Company changed its name to Tribeworks, Inc. and redomiciled to the state of Delaware. In August 2007, the Company changed its name to Atlas Technology Group, Inc. In August 2015, the Company redomiciled to the State of Florida. In December 2015, the Company changed its name to Moxie Motion Pictures, Inc. In November 2018, the Company changed its name back to Atlas Technology Group, Inc.
Since its Inception in August 1996, the Company has at various times been involved in the following business activities: software sales, provision of information technology application support services, distribution of energy efficient lighting products and movie production and talent management.
By December 31, 2018, the Company had ceased all operations and had disposed of all its former operating subsidiaries.
Impact of the COVID-19 Pandemic
We have not commenced operations as yet and consequently have not been directly impacted by the Covid-19 outbreak at this time. However, the detrimental effect of the Covid-19 outbreak on the economy as a whole may have a
detrimental impact on our ability to raise funding and identify an entity to merge with for the foreseeable future. We are unable to predict with any certainty the ultimate impact Covid-19 outbreak on our plans at this time.
NOTE 2. GOING CONCERN
Our financial statements are prepared using accounting principles generally accepted in the United States of America (“GAAP”) applicable to a going concern, which contemplate the realization of assets and the liquidation of liabilities in the normal course of business. We have no ongoing business or income and for the nine-month period ended September 30, 2021. We incurred a loss of $85,796 and had an accumulated deficit of $30,933,115 as of September 30, 2021. These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties. Our ability to continue as a going concern is dependent upon our ability to raise additional debt or equity funding to meet our ongoing operating expenses and ultimately in merging with another entity with experienced management and profitable operations. No assurances can be given that we will be successful in achieving these objectives.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The summary of significant accounting policies is presented to assist in the understanding of the financial statements. These policies conform to GAAP and have been consistently applied. The Company has selected December 31 as its financial year end.
Interim Financial Statements
The accompanying unaudited interim condensed financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in shareholders’ deficit and cash flows as of September 30, 2021 and for the related periods presented, have been included. The results for the three and nine-month periods ended September 30, 2021 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto for the years ended December 31, 2020 and 2019 included on pages F-1 to F-15 of the our Form 10 filed on July 29, 2021 and amended on August 2 and August 30, 2021.
Use of Estimates
The preparation of financial statements in conformity with 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.
Cash and Cash Equivalents:
We maintain cash balances in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. As of September 30, 2021 and December 31, 2020, our cash balances were $0.
Fair Value Measurements:
ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
Our financial instruments consist of our prepaid expenses, accounts payable, accrued expenses - related parties and note payable – related party. The carrying amount of our prepaid expenses, accounts payable, accrued expenses- related parties and note payable – related party approximates their fair values because of the short-term maturities of these instruments
Related Party Transactions:
A related party is generally defined as (i) any person that holds 10% or more of our membership interests including such person's immediate families, (ii) our management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with us, or (iv) anyone who can significantly influence our financial and operating decisions. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. See Notes 5, 6 and 8 below for details of related party transactions in the period presented.
Leases:
We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) as assets, operating lease non-current liabilities, and operating lease current liabilities in our balance sheet. Finance leases are property and equipment, other current liabilities, and other non-current liabilities in the balance sheet.
ROU assets represent the right to use an asset for the lease term and lease liability represent the obligation to make lease payment arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over lease term. As most of the leases doesn’t provide an implicit rate. We generally use the incremental borrowing rate on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating ROU asset also includes any lease payments made and exclude lease incentives. Lease expense for lease payment is recognized on a straight-line basis over lease term.
The Company was not party to any lease transaction during the three and nine months ended September 30, 2021 and 2020.
Income Taxes:
The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Uncertain Tax Positions:
We evaluate tax positions in a two-step process. We first determine whether it is more likely than not that a tax position will be sustained upon examination, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We classify gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as long-term liabilities in the financial statements.
Revenue Recognition:
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
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
As the Company had no business operations during the three and nine months ended September 30, 2021 and 2020, we have not identified specific planned revenue streams.
During the three and nine-month periods ended September 30, 2021 and 2020, we did not recognize any revenue.
Advertising Costs:
We expense advertising costs when advertisements occur. No advertising costs were incurred during the three and nine-month periods ended September 30, 2021 and 2020.
Stock-Based Compensation:
The cost of equity instruments issued to employees and non-employees in return for goods and services is measured by the grant date fair value of the equity instruments issued in accordance with ASC 718, Compensation – Stock Compensation. The related expense is recognized as services are rendered or vesting periods elapse.
Net Loss per Share Calculation:
Basic earnings (loss) per common share ("EPS") is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
Recently Accounting Pronouncements:
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and do not believe any of these pronouncements will have a material impact on our financial statements.
NOTE 4. ACCOUNTS PAYABLE
As of September 30, 2021 and December 31, 2020, the balance of accounts payable totaled $3,150 and $9,470 respectively.
These balances were owed to the Company’s share transfer agent.
NOTE 5. ACCRUED EXPENSES - RELATED PARTIES
As of September 30, 2021 and December 31, 2020, the balance of accruals - related parties totaled $99,000 and $72,000 respectively.
These accruals relate to consulting fees due our current controlling shareholder, director and chief financial officer ($20,000 and $0, respectively) and our former controlling shareholder ($79,000 and $72,000 respectively).
NOTE 6. NOTE PAYABLE – RELATED PARTY
As of September 30, 2021 and December 31, 2020, the balance of notes payable – related party totaled $28,133 and $0 respectively
Our new controlling shareholder, director and chief financial officer, advanced to us $28,133, by way of a promissory note to finance our working capital requirements.
The promissory note is unsecured, due on demand and interest free.
NOTE 7. COMMITMENTS & CONTINGENCIES
Legal Proceedings
We were not subject to any legal proceedings during the three and nine-month periods ended September 30, 2021 or 2020, and, to the best of our knowledge, no legal proceedings are pending or threatened.
Contractual Obligations
We are not party to any contractual obligations at this time.
NOTE 8. SHAREHOLDERS’ DEFICIT
Preferred Stock
We are authorized to issue 25,000,000 shares of preferred stock with a par value of $0.00001, with such relative rights, preferences and designations as may be determined by our Board of Directors in its sole discretion upon the issuance of any shares of Preferred Stock.
1 share of Series A Preferred Stock and 24,999,999 shares of Series B Preferred Stock were designated effective July 27, 2015.
There are no remaining shares of preferred stock available for designation at this time.
Series A Preferred Stock
As of September 30, 2021, we were authorized to issue 1 share of Series A Preferred Stock with a par value of $0.00001.
1 share of Series A Preferred Stock was issued and outstanding as of December 31, 2020.
The share of Series A Preferred Stock carried super majority voting rights such that it can vote the equivalent of 61% of all votable preferred and common stock at all times.
The share of Series A Preferred Stock was convertible into 1,000 shares of common stock at the option of the Holder.
As described above, effective May 29, 2021, the 1 existing issued share of Series A Preferred Stock was returned to us by of former controlling shareholder and cancelled by us.
Further on May 29, 2021, we issued a new share of Series A Preferred Stock, valued by an independent, third party valuation company at $39,900, as compensation to our new controlling shareholder, director and Chief Financial Officer.
The new share of Series A Preferred Stock carries the same super majority voting rights as before such that it can vote the equivalent of 61% of all votable preferred and common stock at all times.
However, the new share of Series A Preferred Stock is now convertible into such number of shares of common equal to 61% ownership of the common stock of the Company at the option of the Holder.
As further discussed in Note 9 Subsequent Events below, effective October 26, 2021, the Company’s board of directors and controlling shareholder increased the super majority voting rights of the one share of outstanding share of Series A Preferred Stock from 61% to 68%.
Series B Preferred Stock
As of September 30, 2021, we were authorized to issue 24,999,999 shares of Series B Preferred Stock with a par value of $0.00001.
No shares of Series B Preferred Stock were issued or outstanding during the three- and nine-months periods ended September 30, 2021 and 2020.
Each share of Series B Preferred Stock is entitled to one vote.
In the event of a liquidation, each share of Series B Preferred Stock is entitled to $1.00 per share distribution before any distribution is made to holders of any stock ranking junior to the Series B Preferred Stock.
Each share of series B Preferred Stock is convertible into 100,000 common shares of the Company.
Common Stock
As of September 30, 2021, we were authorized to issue 15,000,000,000 shares of common stock with a par value of $0.0001.
No shares of common stock were issued during the three- and nine-month periods ended September 30, 2021 and 2020.
As of September 30, 2021 and December 31, 2020, 5,850,705,874 shares of common stock were issued and outstanding.
As further discussed in Note 9. Subsequent Events below, on November 9, 2021, we filed a Preliminary Schedule 14C in respect of:
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a proposed reverse split of the common stock issued and outstanding on a one new share for one million (1,000,000) old shares basis, to be followed by
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a proposed forward split on a one for one hundred (100) basis such that each post reverse split old share represents 100 new shares.
These transactions were approved by the Board of directors and the Company’s controlling shareholder on November 9, 2021 and will become effective upon the filing of an amendment to our Certificate of Incorporation with the Secretary of State and approval from FINRA.
Warrants
No warrants were issued or outstanding during the three- and nine-month periods ended September 30, 2021 and 2020.
Stock Options
We currently have no stock option plan.
No stock options were issued or outstanding during the three- and nine-month periods ended September 30, 2021 and 2020.
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events after September 30, 2021, in accordance with FASB ASC 855 Subsequent Events, through the date of the issuance of these financial statements and has determined there have been no subsequent events for which disclosure is required.
Effective October 26, 2021, the Company's board of directors and controlling shareholder increased the super majority voting rights of the one share of outstanding share of Series A Preferred Stock from 61% to 68%.
On November 9, 2021, we filed a Preliminary Schedule 14C in respect of:
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a proposed reverse split of the common stock issued and outstanding on a one new share for one million (1,000,000) old shares basis, to be followed by
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a proposed forward split on a one for one hundred (100) basis such that each post reverse split old share represents 100 new shares.
These transactions were approved by the Board of directors and the Company’s controlling shareholder on November 9, 2021 and will become effective upon the filing of an amendment to our Certificate of Incorporation with the Secretary of State and approval from FINRA.