Item 1. Business
Throughout this Annual Report on Form 10-K Advantego Corporation is referred to as "we," "our," "us," the "Company," or "Advantego."
The Company was formed as a Colorado corporation on July 21, 1988 as Beneficial Capital Financial Services Corp. On February 2, 1995, the Company changed its name to Golden Eagle International, Inc. ("GEII").
In 2004, the Company purchased the 3,500 to 4,500 ton-per-day Gold Bar mill which is located 25 miles northwest of Eureka, Nevada. Initially, the Company's plan was to disassemble the mill and transport it to Bolivia to be reconstructed on mineral properties formally owned by the Company. However, due to the costs associated with disassembling and transporting the mill to Bolivia, the Company determined that the best course of action was to leave the mill in place and explore other options, such as processing ore for third parties which had mines in the area, or selling the mill.
Having been unsuccessful in selling the mill, or processing ore for third parties, the Company concluded the mill would not provide any meaningful value to the Company's shareholders. Accordingly, on October 30, 2015, the Company agreed to sell the mill to Gulf Coast Capital, LLC, an entity controlled by Mark Bogani, a former officer and director of the Company, in consideration for Gulf Coast assuming all of the Company's liabilities. On July 20, 2016, the agreement relating to the sale of the Gold Bar Mill was terminated by the mutual consent of the Company and Gulf Coast Capital.
The mill was not in operation when the Company acquired it, and it has not been in operation since it was acquired by the Company.
On October 27, 2016, the Company acquired 100% stock ownership of Advantego Technologies, Inc. in exchange for 11,628,636 (post-split) shares of the Company's common stock. The stock exchange is deemed a reverse merger, as the management and operations of Advantego have continued, and Advantego's management received in the aggregate a majority ownership in GEII as a result of the stock exchange. Concurrent with the merger, the combined entity executed a quasi-reorganization, thereby eliminating Golden Eagle's losses accumulated since its inception through the date of the merger.
In connection with this acquisition, the following management changes took place on October 28, 2016:
●
Mark Bogani resigned as an officer and director of the Company;
●
Frank Grey resigned as the Company's Secretary and Treasurer;
●
Tracy Madsen resigned as a director of the Company;
●
Robert Ferguson became a director of the Company and the Company's Chief Executive Officer;
●
Fred Popke became a director of the Company and the Company's Vice President, Secretary and Treasurer; and
●
John J. Carvelli and Barry Adnams became directors of the Company.
Frank Grey remained as the Company's Principal Financial and Accounting Officer and a director.
Advantego Technologies develops software, products and related services which are designed to enable an organization to rapidly and cost effectively create a comprehensive promotional and marketing campaign using social media marketing, customer relationship management and lead generation. Advantego Technologies plans to provide its software to a variety of clients, including businesses, financial institutions, real estate related entities, national franchise organizations, governmental agencies, schools and charities.
Social Media Marketing is the process of marketing through social media websites. Social media is a catch-all term for sites that may provide radically different social interactions. For instance, Twitter is a social media website designed to let people share short messages or "updates" with others.
Customer relationship management (CRM) practices, strategies and technologies are used to analyze customer personal information, purchase history, buying preferences and concerns with the goal of improving customer retention and increasing sales. CRM systems compile information on customers across different channels -- or points of contact between the customer and the organization -- which could include the organization's website, telephone, live chat forums, direct mail, marketing materials and social media.
Lead Generation is the process of identifying potential customers for list building, e-newsletter list acquisition and sales leads.
Advantego Technologies is a California corporation formed on July 29, 2016. Since its inception and through December 31, 2017, Advantego had revenues of $18,631 and net losses of $(779,262).
Unless otherwise indicated, all references to the Company include the operations of Advantego Technologies.
On December 30, 2016, the Company transferred the Gold Bar Mill and its associated liabilities - consisting of severance pay notes payable plus accrued interest owed to former officers and directors Terry Turner and Tracy Madsen - to its then wholly-owned subsidiary, Quove Corporation, which the Company formed on October 31, 2016. On December 30, 2016, the Company transferred the shares of the subsidiary to a trust owned and controlled by a minority shareholder of the Company, thereby divesting all of its ownership of and affiliation with Quove Corporation. When permitted by the rules and regulations of the Securities and Exchange Commission, the Quove shares will be distributed from the trust account to GEII's shareholders who owned eleven or more shares of the then GEII's common stock at the close of business on October 27, 2016.
On January 31, 2018 the Company changed its name to Advantego Corporation and amended Golden Eagle International, Inc.'s Articles of Incorporation accordingly. On February 22, 2018, a 1-for-11 reverse stock split, which was approved by the Company's shareholders on January 31, 2018, became effective on the OTCQB Market. Unless otherwise indicated, all per share information in this report has been adjusted to reflect this reverse stock split.
Other Information
As of March 30, 2018, the Company had three full time employees and one part time employee. The Company currently outsources most of its software development and marketing requirements to third parties.
The Company rents executive office space at 3801 East Florida Ave., Suite 400, Denver, Colorado 80210. The Company also rents executive office space at 1 Park Plaza, Suite 600, Irvine, CA 92614 on a monthly basis. The combined rent on the Company's offices in Colorado and California ranges from $300 to $500 per month, depending on the Company's usage of these spaces.
Virtual Office software and VOIP phone services enable the Company's employees, contracted service providers, and partners to 'work from anywhere' while still being centrally connected.
The Company files its annual, quarterly, and current reports with the Securities and Exchange Commission (SEC), copies of which are available at www.sec.gov. The public may also read and copy any materials that the Company has filed with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
Item 1A.
Item 1A. Risk Factors.
Not applicable.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2.
Item 2. Properties.
See Item 1.
Item 3.
Item 3. Legal Proceedings.
None.
Item 4.
Item 4. Mine Safety Disclosures
None.
Item 5.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock was quoted on the Over-the-Counter market under the trading symbol "MYNG" until March 21, 2018. On March 21, 2018 our trading symbol changed to "ADGO." The following table shows the high and low prices of our common stock during the last two years. These prices represent inter-dealer prices, without retail mark-up, markdown, or commission, and may not represent actual transactions.
The foregoing prices do not reflect a 1:11 reverse stock split which became effective on the OTCQB Market on February 22, 2018.
Holders of our common stock are entitled to receive dividends as may be declared by the Board of Directors. Our Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No cash dividends have ever been declared and it is not anticipated that cash dividends will ever be paid.
Our Articles of Incorporation authorize our Board of Directors to issue up to 10,000,000 shares of preferred stock. The provisions in the Articles of Incorporation relating to the preferred stock allow our directors to issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of our common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by our management.
As of, March 30, 2018 the Company had 15,685,015 outstanding shares of common stock which were owned by approximately 450 shareholders of record.
Item 6.
Item 6. Selected Financial Data
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation.
During the two years ended December 31, 2016 and 2015, Golden Eagle International, Inc. did not generate any revenue. Prior to December 31, 2016, Golden Eagle International, Inc.'s only significant asset was the Gold Bar Mill, which has never been in operation. During the year ended December 31, 2017 and the period of July 29, 2016 (Advantego's inception), we had revenues of $0 and $18,631, respectively, and incurred net losses of $162,464 and $616,798, respectively, which consisted primarily of officer wages, professional fees and interest/amortization of debt discounts on notes payable.
Although from a legal standpoint we acquired Advantego Technologies on October 27, 2016, for financial reporting purposes, the acquisition of Advantego Technologies constituted a recapitalization, and the acquisition was accounted for as a reverse merger, with the result that Advantego Technologies was deemed to have acquired us. As a result, our financial statements included as part of this report represent the activity of Advantego Technologies from July 29, 2016 (the inception of Advantego) to October 27, 2016, and the consolidated activity of Advantego Technologies and us from October 27, 2016 forward.
Since Advantego Technologies was only formed on July 29, 2016, a comparison of results of operations for the year ended December 31, 2017 with the period ended December 31, 2016 would not be meaningful.
We do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.
Our sources and (uses) of cash for the period ended December 31, 2017 and 2016 are shown below:
On August 31, 2016, Terry Turner and Tracy Madsen agreed that all amounts owed to them would be satisfied solely from the proceeds from the sale of the Gold Bar Mill. On August 31, 2016, we owed Mr. Turner $421,726 and we owed Mr. Madsen $310,027.
During August and September 2016, we sold 363,636 shares of our common stock, as well as warrants to purchase an additional 545,455 shares of our common stock, to a group of private investors for $100,000. The warrants are exercisable at prices between $0.55 and $2.20 per share at any time between June 30, 2017 and June 30, 2019. The issuances of these shares and warrants are not reflected in the attached financial statements as the transactions occurred prior to the reverse merger. The aggregate transaction was eliminated as a result of the reverse merger, and the proceeds and other effects are included in the 'Recapitalization' line item in the 2016 Statement of Changes in Stockholders' Equity (Deficit) and 'Net cash acquired in reverse merger' in the Investing section of the Statement of Cash Flows for the period ended December 31, 2016. The warrants are still issued and outstanding, as disclosed in Note F to the financial statements, and are included in our computation of diluted weighted average number of shares outstanding in Note D.
On June 5, 2017, Gulf Coast Capital, LLC, a company controlled by Mark Bogani, a former officer and director of the Company, converted a note in the principal amount of $115,000 into 418,182 shares of the Company's common stock.
In December 2017 we sold 129,870 shares of our common stock at a price of $0.385 per share.
On January 8, 2018 holders of notes, in the principal amount of $199,090, converted their notes, plus accrued interest of $28,752, into 828,517 shares of our common stock. Our CFO, Philip Grey, also converted $38,500 in accrued wages to 95,890 shares of our common stock at $0.402 per share.
See Note E to the December 31, 2017 financial statements, which are a part of this report, for a discussion of our notes payable.
Other than funding our operating expenses and paying our notes payable, we did not, as of December 31, 2017, have any significant capital requirements.
We do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.
Other than the foregoing, we do not know of any significant changes in our expected sources and uses of cash.
We do not have any commitments or arrangements from any person to provide us with any equity capital.
See Note D to the financial statements included as part of this report for a description of our significant accounting policies.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
Not applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data.
See the financial statements attached to this report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On October 16, 2016, the Company engaged Pritchett, Siler & Hardy, PC, as its independent registered public accounting firm.
On February 21, 2018, the Company dismissed Pritchett, Siler & Hardy, PC as its independent registered accounting firm. On February 21, 2018, the Company engaged Heaton & Company, PLLC, dba Pinnacle Accountancy Group of Utah, as its new independent registered accounting firm.
Item 9A.
Item 9A. Controls and Procedures.
An evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive and Financial Officers of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive and Financial Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of December 31, 2017, our disclosure controls and procedures were not effective. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of our Principal Executive and Financial Officers and implemented by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our Principal Executive and Financial Officers evaluated the effectiveness of our internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework (2013). Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls.
Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2017. Due to the following:
●
the lack of formal written documentation relating to the design of our controls.
●
we did not maintain adequate segregation of duties related to job responsibilities for initiating, authorizing, and recording of certain transactions due to the small size of our company.
●
we do not have sufficient personnel to provide adequate risk assessment functions.
Notwithstanding the above, a controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information.
None.
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
Our officers and directors are listed below.
Directors are generally elected at an annual shareholders' meeting and hold office until the next annual shareholders' meeting, or until their successors are elected and qualified. Executive officers are elected by directors and serve at the board's discretion.
The principal occupations of the Company's officers and directors during the past several years are as follows:
Robert Ferguson has been an officer and director of the Company since October 28, 2016. Since 2001 Mr. Ferguson has been the managing member of CJBS Holdings LLC, d/b/a Integrated Strategic Solutions, a privately-owned consulting and investment company focused in technology and real estate. Since 2011, Mr. Ferguson has been the Chairman of First Enterprise Realty Group, Inc., a licensed brokerage firm in California.
Fred Popke has been an officer and director of the Company since October 28, 2016. Since 2009, Mr. Popke has served as the President of Real Estate Services and Technology, a firm engaged in providing custom software solutions for the real estate and financial industries. From 2006 to 2009 Mr. Popke was the Product Director at Commerce Velocity, a firm engaged in developing and delivering enterprise-level underwriting and decisioning software for the financial industry.
Philip F. (Frank) Grey has been an officer and director of this Company since October 1, 2015. Mr. Grey has been in the financial services industry for more than 25 years specializing in private and public equity, futures and commodities, as well as the foreign exchange markets. He has been involved in investment banking facilitating mergers and acquisitions for both private and public companies focusing on the technology and energy sectors. For the past six years, he has been a consultant to Share Agent, LLC and Securities Logistics Legal Group advising foreign companies and individuals in the complexities of U.S. and Canadian securities markets. From 2008 to 2010, Mr. Grey was employed at Velocity Capital Advisors, a company he founded to act as an introducing brokerage firm for futures, commodities and Forex trading. Prior to 2008, Mr. Grey served as Vice President of Institutional Sales for Acuvest, Inc., a futures and commodities firm located in Southern California.
John Carvelli has been a director of the Company since October 28, 2016. Mr. Carvelli has been the Executive Vice President of the Liberty Dental Plan group of companies, a national dental benefits administrator, since 2004. Prior to joining Liberty in 2004, John completed a multi-year project directing a hospital and integrated medical community clinic system in Los Angeles, CA.
Our directors are generally elected at our annual shareholders' meeting and hold office until the next annual shareholders' meeting, or until their successors are elected and qualified. Our executive officers are elected by our directors and serve at their discretion.
We believe that each of our directors is qualified to serve as a director for the following reasons:
John J. Carvelli is an independent director as that term is defined in Section 803 of the NYSE MKT Company Guide. Frank Grey acts as our financial expert.
We have adopted a code of ethics applicable to our principal executive, financial and accounting officers and persons performing similar functions.
Item 11.
Item 11. Executive Compensation.
The following table summarizes the compensation earned by our principal executive officers during the two years ended December 31, 2017.
(1)
The dollar value of base salary (cash and non-cash) earned.
(2)
The dollar value of bonus (cash and non-cash) earned.
(3)
The value of the shares of restricted stock issued as compensation for services computed in accordance with ASC 718 on the date of grant.
(4)
The value of all stock options computed in accordance with ASC 718 on the date of grant.
(5)
All other compensation received that could not be properly reported in any other column of the table.
(6)
On January 8, 2018 Mr. Grey converted the compensation owed to him for 2016 and 2017 into 95,890 post-split shares of our common stock.
Management Changes.
In connection with the acquisition of Advantego Technologies, the following management changes took place on October 28, 2016:
●
Mark Bogani resigned as an officer and director of the Company;
●
Frank Grey resigned as the Company's Secretary and Treasurer;
●
Tracy Madsen resigned as a director of the Company;
●
Robert Ferguson became a director of the Company and the Company's Chief Executive Officer;
●
Fred Popke became a director of the Company and the Company's Vice President, Secretary and Treasurer; and
●
John J. Carvelli and Barry Adnams became directors of the Company.
On May 24, 2017, Barry Adnams resigned as a director.
Long-Term Incentive Plans. We do not provide our officers or employees with pension, stock appreciation rights, long-term incentive or other plans.
Employee Pension, Profit Sharing or other Retirement Plans. We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.
Compensation of Directors. During the year ended December 31, 2017, we did not compensate our directors for acting as such.
Compensation Committee Interlocks and Insider Participation. During the year ended December 31, 2017, none of our officers was also a member of the compensation committee or a director of another entity, which other entity had one of its executive officers serving as one of our directors.
The following shows the amounts the Company expects to pay to its officers during the twelve months ending December 31, 2018 and the amount of time these persons expect to devote to the Company.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table lists, as of March 30, 2018, the shareholdings of (i) each person owning beneficially 5% or more of the Company's 15,685,015 outstanding shares of common stock; (ii) each executive officer of the Company, and (iii) all officers and directors as a group. Unless otherwise indicated, each owner has sole voting and investment power over his shares of common stock.
(1)
1,454,962 of Mr. Bogani's shares are registered in the name of Gulf Coast Capital, LLC, a company controlled by Mr. Bogani, a former officer/director of the Company.
The following table lists, as of March 30, 2018, the shareholdings of each person owning the Company's Series B preferred stock. Unless otherwise indicated, each owner has sole voting and investment power over his shares of preferred stock:
(1)
Each Series B preferred share is convertible into one-half of a share of the Company's common stock and is entitled to one vote on any matter submitted to the Company's shareholders.
(2)
Gulf Coast Capital is controlled by Mark Bogani, a former officer and a director of the Company.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
We have notes payable to various related parties with principal and accrued interest balances totaling $85,612 and $24,706, respectively, at December 31, 2017. The notes are unsecured, are either due on demand or mature during 2018, accrue interest at 5%-6%, and are convertible at the option of the holder into the Company's common stock at $.275 per share. On January 8, 2018, $71,029 of principal and interest due on these notes was converted to 258,287 shares of common stock.
An entity controlled by Mark Bogani, a former officer and Director, controlled our transfer agent until July 15, 2017. We incurred fees with the transfer agent of $6,912 and $1,948 during the periods ended December 31, 2017 and 2016, respectively, of which $500 and $1,240 was payable at December 31, 2017 and 2016, respectively.
In connection with our acquisition of Advantego, as discussed in Item 1 of this report, the following persons (who, prior to the acquisition, were officers and directors of Advantego and owned 82% of Advantego, collectively) received shares of our common stock in the amounts shown below:
(1)
Reflects 1:11 reverse stock split.
On December 30, 2016, the Company transferred the Gold Bar Mill and its associated liabilities - consisting of severance pay notes payable plus accrued interest owed to former officers and directors Terry Turner and Tracy Madsen - to its then wholly-owned subsidiary, Quove Corporation, which the Company formed on October 31, 2016. On December 30, 2016, the Company transferred the shares of the subsidiary to a trust owned and controlled by a minority shareholder of the Company, thereby divesting all of its ownership of and affiliation with Quove Corporation. When permitted by the rules and regulations of the Securities and Exchange Commission, the Quove shares will be distributed from the trust account to GEII's shareholders who owned eleven or more shares of the then GEII's common stock at the close of business on October 27, 2016.
As of December 31, 2017 we had accounts payable - related parties totaling $418,079, which is comprised of $370,079 in management wage accruals, $47,500 in software platform license fees owed to a company affiliated with one of our officers, and $500 to our transfer agent that was affiliated with a prior officer through July 15, 2017.
Item 14.
Item 14. Principal Accountant Fees and Services.
Pritchett, Siler & Hardy, PC was our principal accountant between October 16, 2016 and February 21, 2018 and audited our financial statements for the period of July 29, 2016 (Advantego's inception) through December 31, 2016. The following shows the fees we incurred with Pritchett, Siler & Hardy, PC during the year ended December 31, 2017 and the period of July 29, 2016 through December 31, 2016.
Audit fees represent amounts billed for professional services rendered for the audit of our annual financial statements and reviews of our quarterly financial statements.
Audit-related fees represent amounts billed for consents related to regulatory filings, audit/review of financial statements included in our registration statements filed with the Securities and Exchange Commission, and consulting related to the implementation of accounting standards.
On February 21, 2018, we engaged Heaton & Company, PLLC, dba Pinnacle Accountancy Group of Utah, as our new independent registered accounting firm
Item 15.
Item 15. Exhibits and Financial Statement Schedules.
The following exhibits are filed with this Form 10-K or incorporated by references:
(1)
Incorporated by reference from our registration statement on Form 10-SB that became effective June 17, 1994.
(2)
Incorporated by reference from our 8-K report dated December 29, 2006.
(3)
Incorporated by reference from our 8-K report dated September 14, 2007.
1438 N. HIGHWAY 89, STE. 120
FARMINGTON, UTAH 84025
PH (801) 447-9572 FAX (801) 447-9578
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Advantego Corporation
(formerly Golden Eagle International, Inc.)
Denver, CO
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Advantego Corporation (formerly Golden Eagle International, Inc.) (the Company) as of December 31, 2017, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the notes thereto (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses, has not achieved profitable operations, and expects to incur further losses in the development of its business, which raise substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters are described in Note A. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/S/: Pinnacle Accountancy Group of Utah, PLLC
Pinnacle Accountancy Group of Utah, PLLC
We have served as the Company's auditor since 2018.
Farmington, UT
March 29, 2018
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL CORPORATION
515 S 400 E, STE 100
SALT LAKE CITY, UT 84111
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Golden Eagle International, Inc.
Irvine, CA
We have audited the accompanying consolidated balance sheet of Golden Eagle International, Inc. (the Company) as of December 31, 2016, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the period of July 29, 2016 (inception) through December 31, 2016. The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2016, and the consolidated results of its operations and its cash flows for the period of July 29, 2016 (inception) through December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note A to the financial statements, the Company has incurred losses since its inception, has a working capital deficit, and has not yet established profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management's plans in regards to these matters are also described in Note A. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Farmington, Utah
October 16, 2017
The accompanying footnotes are an integral part of these consolidated financial statements
The accompanying footnotes are an integral part of these consolidated financial statements.
The accompanying footnotes are an integral part of these consolidated financial statements.
The accompanying footnotes are an integral part of these consolidated financial statements.
ADVANTEGO CORPORATION
(formerly Golden Eagle International, Inc.)
Notes to Consolidated Financial Statements
Year Ended December 31, 2017 and the Period of July 29, 2016 (Inception) through December 31, 2016
Note A - Organization and Business
Organization and Nature of Business
Golden Eagle International, Inc. ("GEII") was incorporated in Colorado on July 21, 1988. From late 2008 through June 2009, GEII engaged in contract gold milling operations in the state of Nevada in the United States. GEII has not had any business operations since it disposed of its wholly-owned subsidiary, Golden Eagle International, Inc. (Bolivia) in the first quarter of fiscal 2010. Prior to that time GEII had been involved in the business of minerals exploration and (prior to 2005) mining and milling operations in Bolivia through that subsidiary. More recently, GEII has been a non-operating corporation seeking to sell its remaining milling plant and equipment and/or merge with an operating company. On October 27, 2016, GEII completed a reverse merger with Advantego Technologies, Inc., which resulted in a change of control and the perpetuation of Advantego Technologies, Inc.'s management and business operations. Concurrent with the merger, the combined entity executed a quasi-reorganization, thereby eliminating GEII's losses accumulated since its inception through the date of the merger.
Advantego Technologies, Inc. was incorporated in California on July 29, 2016. Advantego Technologies, Inc. develops software products and related services which are designed to enable an organization to rapidly and cost-effectively create a comprehensive promotional and marketing campaign using social media marketing, customer relationship management, and lead generation.
Effective February 1, 2018 and pursuant to Board authorization and majority shareholder approval, the Company changed the name of GEII to Advantego Corporation (amending GEII's Articles of Incorporation accordingly), cancelled its Series A, C, and D preferred shares, and effected a 1-for-11 reverse stock split on its issued and outstanding shares of common stock that became effective on the OTCQB on February 22, 2018. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted to reflect the stock split as if it had occurred on the first day of the earliest period presented.
Basis of Presentation
The accompanying financial statements represent the consolidated operations of Advantego Corporation and Advantego Technologies, Inc., collectively "the Company," "we," "us," as the consolidated entity, with all intercompany transactions eliminated.
Going Concern
The consolidated financial statements as of and for the period of July 29, 2016 through December 31, 2016 and for the year ended December 31, 2017 have been prepared on the going concern basis which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern. The Company has not yet achieved profitable operations, has accumulated losses of $(779,262), since its inception through December 31, 2017 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern. As a result of the reverse merger with Advantego Technologies, Inc., we have entered into a new line of business with unproven technologies and we can offer no assurances that we will be able to obtain adequate financing to implement our business plan and remain a going concern.
Note B - Business Combination - Reverse Merger
On October 27, 2016, Golden Eagle International, Inc. ("GEII") acquired 100% of the issued and outstanding common stock of Advantego Technologies, Inc. ("Advantego") in exchange for 11,628,636 shares of GEII common stock, thus making Advantego GEII's wholly-owned subsidiary. The stock exchange is deemed a reverse merger, as the management and operations of Advantego have continued, and Advantego's management received in the aggregate a majority ownership in GEII as a result of the stock exchange. As such, the accompanying consolidated financial statements represent the operations of Advantego Technologies, Inc. (the surviving operating entity and accounting acquirer) from the period of July 29, 2016 (date of inception) through the October 27, 2016 merger date, consolidated with the operations of GEII (the SEC registrant and legal acquirer) from the period of October 27, 2016 (date of reverse merger) through December 31, 2016 and for the year ended December 31, 2017. The equity section of the consolidated financial statements reflect the historical activity of GEII, with a recapitalization to reconcile the beginning $0 balances upon Advantego's inception. Effective February 1, 2018, the Company changed the name of GEII to Advantego Corporation.
In connection with this reverse merger, the following management changes took place on October 28, 2016:
●
Mark Bogani resigned as an officer and director;
●
Frank Grey resigned as our Secretary and Treasurer;
●
Tracy Madsen resigned as a director;
●
Robert Ferguson became a director and our Chief Executive Officer;
●
Fred Popke became a director and our Vice President, Secretary and Treasurer; and
●
John J. Carvelli and Barry Adnams became directors.
Frank Grey remained as our Principal Financial and Accounting Officer and a director.
Note C - Transfer of Gold Bar Mill and associated Liabilities
On December 30, 2016, the Company transferred the Gold Bar Mill and its associated liabilities - consisting of severance pay notes payable plus accrued interest owed to former officers and directors Terry Turner and Tracy Madsen - to its then wholly-owned subsidiary, Quove Corporation, which the Company formed on October 31, 2016. On December 30, 2016, the Company transferred the shares of the subsidiary to a trust owned and controlled by a minority shareholder of the Company, thereby divesting all of its ownership of and affiliation with Quove Corporation. When permitted by the rules and regulations of the Securities and Exchange Commission, the Quove shares will be distributed from the trust account to GEII's shareholders who owned eleven or more shares of the then GEII's common stock at the close of business on October 27, 2016.
The Gold Bar Mill was transferred to Quove Corporation at its book value of $350,000.
A note payable to Terry Turner (our former CEO) in the principal amount of $350,000 along with $77,575 of accrued interest was transferred to Quove Corporation. This note carries an interest rate of 5%. On August 31, 2016, the Company and Mr. Turner agreed to satisfy principal and interest with proceeds from the sale of the Gold Bar Mill. In consideration of this concession, Mr. Turner was issued 91 shares of the Company's common stock in 2016.
A note payable to Tracy Madsen (our former CFO) in the principal amount of $266,667 along with $47,817 of accrued interest was transferred to Quove Corporation. This note carries an interest rate of 5%. On August 31, 2016, the Company and Mr. Madsen agreed to satisfy principal and interest with proceeds from the sale of the Gold Bar Mill. In consideration of this concession, Mr. Madsen was issued 91 shares of the Company's common stock in 2016.
Note D - Summary of Significant Accounting Policies
Fair Value of Financial Instruments
The Company accounts for fair value measurements in accordance with accounting standard ASC 820-10-50, "Fair Value Measurements." This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
The Company's financial instruments consist of cash, accounts payable, and notes payable. The carrying amount of cash and accounts payable approximates fair value because of the short-term nature of these items. The carrying amount of notes payable approximates fair value as the individual borrowings bear interest at market interest rates and are also short-term in nature.
Use of Estimates
Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the financial statements.
Concentration of Credit Risk
From time to time our cash balances, held at a major financial institution, exceed the federally insured limits of $250,000. Our management believes that the financial institution is financially sound and the risk of loss is low.
Cash and Cash Equivalents
For the statement of cash flows, any liquid investments with a maturity of three months or less at the time of acquisition are considered to be cash equivalents.
Property and Equipment
Property and equipment are recorded at cost. Maintenance and repair costs are charged to expense as incurred, and renewals and improvements that extend the useful life of assets are capitalized. Depreciation on property and equipment is computed using the straight-line method over the assets' estimated useful lives as follows:
Vehicles
5 years
Office equipment
4-10 years
Long-Lived Assets
We periodically review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment losses are recognized when the estimated future cash flows are less than the carrying amount of the asset calculated on discounted cash flow basis. For the period of July 29, 2016 (inception) through December 31, 2016 and for the year ended December 31, 2017, we did not recognize any impairment charges.
Revenue Recognition
In May 2017, the Company launched the online directory and digital signage components of its ongoing licensing services it provides to third parties. The Company recognizes revenue when (1) persuasive evidence of an arrangement exists; (2) the services have been provided; (3) the price for the services is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) is based on the Company's judgment regarding fixed nature of the price for the services and the collectability of amounts charged to the Company's customers.
During the period of May through December 2017, the Company entered into various licensing arrangements to be recognized as revenue over the life of the licensing agreements ranging from one to twelve months. The Company recognized $18,631 in revenues during the period ended December 31, 2017, at which date $4,215 was deferred to future periods. Since customers pre-pay for services to be rendered during a subsequent period, management determined no allowance for doubtful accounts was necessary.
Stock Based Compensation
We measure stock-based compensation cost relative to the estimated fair value of the awards on the grant date using a Black-Scholes options pricing model. We recognize the cost as the awards vest.
Income (Loss) Per Share
The computation of basic earnings (loss) per common share is based on the weighted average number of shares outstanding during each year.
The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus the common stock equivalents as detailed in the following chart. In 2017 and 2016, the inclusion of these shares on the consolidated statement of operations would have resulted in a weighted average shares fully diluted number that was anti-dilutive and as such they are excluded.
Fully diluted shares for the years ended December 31, 2017 and December 31, 2016:
Income Taxes
Income taxes are accounted for under the liability method. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statements and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards 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 basis. 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 law and rates on the date of enactment.
Effect of New Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have a material impact on our financial position, results of operations or cash flows.
Note E - Loans and Notes Payable
Notes Payable - Related Parties
We have related party debt obligations outstanding at December 31, 2017 and 2016 as follows:
(a)
Gulf Coast Capital, LLC is a company owned by Mark Bogani, our former CEO. The note is uncollateralized, dated September 30, 2016, and represents the consolidation of various smaller notes payable previously outstanding totaling $145,112 plus $15,471 in accrued interest. Interest continues to accrue at the rate of 5%, with principal and interest being due on demand and convertible into our common stock at the option of the lender at a fixed rate of $.275 per share. Upon the note's inception, there was a beneficial conversion feature totaling $29,022 that is being amortized ratably over the five-year conversion period (with acceleration if converted) and netted against the principal balance as a debt discount. On December 30, 2016, Gulf Coast Capital converted $115,000 of the note into 418,182 shares of the Company's Common Stock. Debt discount amortization for the periods ended December 31, 2017 and 2016 totaled $1,506 and $22,958, respectively. Interest expense for the periods ended December 31, 2017 and 2016 totaled $1,505 and $1,214, respectively. On January 8, 2018, Gulf Coast Capital converted $45,466 principal and interest into 165,331 shares (Note I).
(b)
Avcon Services, Inc. is a company owned by Tracy Madsen, our former CFO. The note represents amounts due for CFO services during the period of June 2014 through September 2015, is uncollateralized, is dated December 31, 2015, carries an interest rate of 5%, and is due on demand. The note and accrued interest, or any portion thereof, are convertible at the option of Avcon, into the Company's common stock at a fixed rate of $.275 per share through December 31, 2020. Interest expense for the periods ended December 31, 2017 and 2016 totaled $1,525 and $259, respectively.
(c)
On June 29, 2017, the Company entered into an uncollateralized note payable with its CFO, Frank Grey, in the amount of $12,500. The note carries an interest rate of 6%, and matures on June 29, 2018. The note and accrued interest, or any portion thereof, are convertible at the option of the lender, into the Company's common stock at a fixed rate of $.275 per share. Upon the note's inception, there was a beneficial conversion feature totaling $12,500 that is being amortized ratably over the term of the note and netted against the principal balance as a debt discount. Debt discount amortization for the year ended December 31, 2017 totaled $6,284, while interest expense for the period was $366. On January 8, 2018 Philip Grey converted $12,875 in principal and interest into 46,818 shares (Note I).
(d)
On September 25, 2017, the Company entered into an uncollateralized note payable with its former CEO, Mark Bogani, in the amount of $12,500. The note carries an interest rate of 6%, and matures on September 25, 2018. The note and accrued interest, or any portion thereof, are convertible at the option of the lender, into the Company's common stock at a fixed rate of $.275 per share. Upon the note's inception, there was a beneficial conversion feature totaling $12,500 that is being amortized ratably over the term of the note and netted against the principal balance as a debt discount. Debt discount amortization for the year ended December 31, 2017 totaled $3,296, while interest expense for the period was $185. On January 8, 2018 Mark Bogani converted $12,688 in principal and interest into 46,138 shares (Note I).
Notes Payable
(a)
On September 22, 2016 ($50,000), January 12, 2017 ($25,000), and March 27, 2017 ($25,000), the Company entered into uncollateralized notes payable with an unaffiliated investor in the aggregate amount of $100,000. The notes carry an interest rate of 6% and each mature one year following their original issuance. The notes and accrued interest, or any portion thereof, are convertible at the option of the lender, into the Company's common stock at a fixed rate of $.275 per share. Upon the notes' inceptions, there was an aggregate beneficial conversion feature totaling $40,000 that is being amortized ratably over their respective one-year note maturity periods (with acceleration if converted) netted against the principal balance as a debt discount. Aggregate debt discount amortization for the periods ended December 31, 2017 and 2016 totaled $31,123 and $2,719, respectively. Interest expense for the periods ended December 31, 2017 and 2016 totaled $5,926 and $822, respectively. On January 8, 2018, the investor converted $106,313 in principal and interest into 386,593 shares (Note I).
(b)
On September 25, 2017, the Company entered into an uncollateralized note payable with an unaffiliated investor in the amount of $25,000. The note carries an interest rate of 6% and matures on September 25, 2018. The note and accrued interest, or any portion thereof, are convertible at the option of the lender, into the Company's common stock at a fixed rate of $.275 per share. Debt discount amortization for the year ended December 31, 2017 totaled $6,592, while interest expense for the period was $362. On January 8, 2018, the investor converted $25,375 in principal and interest into 92,273 shares (Note I).
(c)
On November 30, 2017, the Company entered into an uncollateralized note payable with an unaffiliated investor in the amount of $25,000. The note carries an interest rate of 6% and matures on November 30, 2018. The note and accrued interest, or any portion thereof, are convertible at the option of the lender, into the Company's common stock at a fixed rate of $.275 per share. Debt discount amortization for the year ended December 31, 2017 totaled $2,083, while interest expense for the period was $127. On January 8, 2018, the investor converted $25,125 in principal and interest into 91,364 shares (Note I).
Note F - Stockholders' Equity
Common Stock
We are authorized to issue 2,000,000,000 shares of our $.0001 par value common stock, of which 14,664,718 and 14,534,848 were issued and outstanding at December 31, 2017 and 2016 respectively.
Pre-Reverse Merger Transactions:
The issuances of the following shares and warrants are not reflected in the attached financial statements, as the transactions occurred prior to the reverse merger. The transactions were eliminated as a result of the reverse merger, and the proceeds and other effects are included in the 'Recapitalization' line item in the 2016 Statement of Changes in Stockholders' Equity (Deficit) and 'Net cash acquired in reverse merger' in the Investing section of the Statement of Cash Flows for the period ended December 31, 2016. The warrants are still issued and outstanding, and are included in our computation of diluted weighted average number of shares outstanding in Note D.
On June 14, 2016, we issued 182 shares of stock to our former officers and directors in exchange for modification of some terms of their debt agreements with the Company (Note C).
During August and September 2016, we sold 363,636 shares of our common stock, with warrants to purchase an additional 545,455 shares of our common stock, to a group of private investors for $100,000. The warrants are exercisable at prices between $0.55 and $2.20 per share at any time between June 30, 2017 and June 30, 2019. Each series of warrants was valued using the Black-Scholes Options Pricing Model resulting in total warrant value of $85,833. The remaining proceeds of $14,167 were allocated to the common stock. Black-Scholes data inputs used to value the warrants are as follows:
Reverse Merger and Subsequent Transactions:
On October 27, 2016, we acquired 100% of the issued and outstanding shares of Advantego Technologies, Inc. ("Advantego") common stock in exchange for 11,628,636 shares of our common stock.
On December 30, 2016, $115,000 of the Gulf Coast Capital, LLC note payable (Note E) was converted into 418,182 shares of our common stock.
On December 4, 2017, we issued 129,870 shares of common stock in exchange for $50,000 in cash at a price of $.385 per share to an independent investor.
Preferred stock
Our Articles of Incorporation provide that we may issue up to 10,000,000 shares of various series of preferred stock. Subject to the requirements of the Colorado Business Corporation Act, the Board of Directors may issue the preferred stock in series with rights and preferences as the Board of Directors may determine appropriate, without shareholder approval. As of December 31, 2017 and 2016, 4,500,000 shares of our Series B Preferred Stock had been authorized for issuance, and 240,000 were issued and outstanding. These 240,000 Series B shares are convertible into 10,909 common shares.
Note G - Related Party Transactions
We incur various consulting, management, and software licensing expenses with our officers, directors, and companies owned by our officers and directors. During the periods ended December 31, 2017 and 2016, we incurred $439,500 and $107,306, respectively, with these individuals and companies, of which $417,579 and $71,006 was payable at December 31, 2017 and 2016, respectively.
An entity controlled by Mark Bogani, a former officer and Director, acts as our transfer agent. We incurred fees with the transfer agent of $6,912 and $1,948 during the periods ended December 31, 2017 and 2016, respectively, of which $500 and $1,240 was payable at December 31, 2017 and 2016, respectively.
We have various notes payable outstanding with related parties as detailed in Note E. Also, on December 30, 2016, we transferred two of our related party notes payable and accrued interest to our then-sister company, Quove Corporation, as detailed in Note C.
Note H - Income Taxes
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carry forwards 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 basis. 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.
The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act. The schedules below reflect the Federal tax provision, deferred tax asset and valuation allowance using the new rates adjusted in the period of enactment.
Deferred tax assets and valuation allowance at December 31, 2017:
A provision for income taxes has not been made due to net operating loss carry-forwards of $14,721,935 at December 31, 2017, which may be offset against future taxable income through 2035. No tax benefit has been reported in the financial statements.
The actual provision for income tax differs from the statutory U.S. federal income tax rate for the years ended December 31, 2017 as follows:
Current accounting guidance requires the Company to provide a reconciliation of the beginning and ending amount of unrecognized tax impacts related to the sustainability of tax positions taken in current and prior periods.
As of December 31, 2017, the Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2017, the Company had no accrued interest or penalties related to uncertain tax positions.
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2014 through the present.
Note I - Subsequent Events
Debt Conversion
As summarized below, on January 8, 2018 various noteholders elected to convert their notes payable into shares of our common stock in accordance with terms of their promissory notes from Note E. Our CFO, Philip Grey, converted his accrued wages as well.
* Accrued wages
Corporate Items
On February 1, 2018 and pursuant to shareholder approval obtained at a January 31, 2018 shareholder meeting, the Company amended its Articles of Incorporation to reflect a name change from Golden Eagle International, Inc. to Advantego Corporation, cancellation of its Series A, C and D preferred shares, and the amendment to voting rights of its Series B preferred shares. The Company also obtained shareholder approval for a 1-for-11 reverse stock split, which became effective on the OTCQB on February 22, 2018.
Contracts
On February 1, 2018, the Company entered into a Consulting Agreement with one of its unaffiliated convertible noteholders ("the Consultant"), whereby the Consultant will provide service related to corporate management and capital formation (i.e., mergers and acquisitions, banking, financing, investing, establishment of business organizations, and financial planning). The agreement's term is one year from its inception, with subsequent renewal by mutual consent of the parties. As compensation, the Consultant received pre-payment of 17,273 shares of the Company's common stock, which were issued on March 15, 2018 with an aggregate value of $13,818 that will be amortized ratably over the contract's term.
On February 5, 2018, the Company entered into a Finders' Fee Agreement with an independent consultant ("the Finder"), whereby in the event that the Company receives funds from a party introduced by the Finder, a fee equal to 20,000 shares of the Company's common stock shall be paid to the Finder if such funding is secured prior to August 5, 2018. On March 8, 2018, the Finder was issued 20,000 shares for procuring $250,000 (net of discounts and fees totaling $39,375) in financing for the Company in the form of a convertible promissory note with an investor unaffiliated with the Company. The note was issued March 2, 2018, bears 12% interest, matures on March 2, 2019, and is convertible at a price equal to 58% of the lowest trading price of the Company's common stock during the twenty-five days preceding conversion.
The Company has evaluated its subsequent events through the date of this report issuance and determined there are no additional events to disclose.
SIGNATURES
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.
ADVANTEGO CORPORATION
Dated: March 30, 2018
By:
/s/ Robert W. Ferguson
Robert W. Ferguson
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Robert W. Ferguson
Chief Executive Officer and a Director
March 30, 2018
Robert W. Ferguson
/s/ Philip F. (Frank) Grey
Principal Financial and Accounting Officer and a Director
March 30, 2018
Philip F. (Frank) Grey
/s/ Fred Popke
Director
March 30, 2018
Fred Popke
/s/ John J. Carvelli
Director
March 30, 2018
John J. Carvelli