Company Quick10K Filing
Geospatial
Price0.01 EPS-0
Shares371 P/E-5
MCap4 P/FCF-8
Net Debt-0 EBIT-1
TEV4 TEV/EBIT-6
TTM 2019-09-30, in MM, except price, ratios
10-Q 2019-09-30 Filed 2019-11-18
10-Q 2019-06-30 Filed 2019-08-19
10-Q 2019-03-31 Filed 2019-05-20
10-K 2018-12-31 Filed 2019-04-16
10-Q 2018-09-30 Filed 2018-11-19
10-Q 2018-06-30 Filed 2018-08-20
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-04-16
10-Q 2017-09-30 Filed 2017-11-20
10-Q 2017-06-30 Filed 2017-08-14
10-Q 2017-03-31 Filed 2017-05-16
10-K 2016-12-31 Filed 2017-04-14
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-15
10-Q 2016-03-31 Filed 2016-05-20
10-K 2015-12-31 Filed 2016-04-14
10-Q 2015-09-30 Filed 2015-11-20
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2010-09-30 Filed 2010-11-15
10-Q 2010-06-30 Filed 2010-08-16
10-Q 2010-03-31 Filed 2010-05-17
10-K 2009-12-31 Filed 2010-04-16
8-K 2020-03-30
8-K 2019-06-06

GSPH 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation
Note 2 - Accrued Expenses
Note 3 - Related - Party Transactions
Note 4 - Notes Payable
Note 5 - Income Taxes
Note 6 - Net Income (Loss) per Share of Common Stock
Note 7 - Stock - Based Payments
Note 8 - Gains on Extinguishment of Debt
Note 9 - Registration Payment Arrangements
Item 2: Management's Discussion & Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 gs_ex31z1.htm
EX-31.2 gs_ex31z2.htm
EX-32.1 gs_ex32z1.htm
EX-32.2 gs_ex32z2.htm

Geospatial Earnings 2019-09-30

Balance SheetIncome StatementCash Flow
0.6-1.5-3.6-5.8-7.9-10.02013201520172020
Assets, Equity
0.30.1-0.2-0.4-0.7-0.92013201520172020
Rev, G Profit, Net Income
0.50.30.20.0-0.1-0.32013201520172020
Ops, Inv, Fin

GEOSPATIAL CORPORATION - Form 10-Q SEC filing
0001011395 --12-31 false 2019 Q3 0001011395 2019-01-01 2019-09-30 0001011395 2019-09-30 0001011395 2019-11-18 0001011395 2019-11-18 2019-11-18 0001011395 2018-12-31 0001011395 fil:UndesignatedMember 2019-09-30 0001011395 fil:UndesignatedMember 2018-12-31 0001011395 fil:SeriesBConvertibleMember 2019-09-30 0001011395 fil:SeriesBConvertibleMember 2018-12-31 0001011395 fil:SeriesCConvertibleMember 2019-09-30 0001011395 fil:SeriesCConvertibleMember 2018-12-31 0001011395 2019-07-01 2019-09-30 0001011395 2018-07-01 2018-09-30 0001011395 2018-01-01 2018-09-30 0001011395 us-gaap:PreferredStockMember 2019-01-01 2019-09-30 0001011395 us-gaap:CommonStockMember 2019-01-01 2019-09-30 0001011395 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-09-30 0001011395 fil:AdditionalPaidInCapitalWarrantsMember 2019-01-01 2019-09-30 0001011395 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-30 0001011395 us-gaap:PreferredStockMember 2018-12-31 0001011395 us-gaap:CommonStockMember 2018-12-31 0001011395 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001011395 fil:AdditionalPaidInCapitalWarrantsMember 2018-12-31 0001011395 us-gaap:RetainedEarningsMember 2018-12-31 0001011395 us-gaap:PreferredStockMember 2019-09-30 0001011395 us-gaap:CommonStockMember 2019-09-30 0001011395 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001011395 fil:AdditionalPaidInCapitalWarrantsMember 2019-09-30 0001011395 us-gaap:RetainedEarningsMember 2019-09-30 0001011395 2017-12-31 0001011395 2018-09-30 0001011395 fil:StockBasedPaymentsTransaction1Member 2019-01-01 2019-09-30 0001011395 fil:StockBasedPaymentsTransaction2Member 2019-01-01 2019-09-30 0001011395 fil:StockBasedPaymentsTransaction2Member 2019-09-30 0001011395 fil:StockBasedPaymentsTransaction3Member 2019-01-01 2019-09-30 xbrli:pure iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED:      September 30, 2019

OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from ___________ to ______________

 

COMMISSION FILE NUMBER:  000-55937

 

 

GEOSPATIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada

87-0554463

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 

13241 Woodland Park Road, Suite 610, Herndon , VA 20171

(Address of principal executive offices)

 

(724) 353-3400

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the issuer (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.   Yes ☒  NO

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files):    YES    No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a Non-accelerated Filer, a smaller reporting company, or 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. (Check one):

 

Large accelerated filer

 

Accelerated filer

Non-accelerated Filer

(Do not check if a smaller reporting company)                            

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 defined in Rule 12b-2 of the Exchange Act): YES NO

 

As of  November 18, 2019, 370,911,784 shares of the registrant's common stock, par value $0.001 par value per share, were outstanding.



FORWARD-LOOKING STATEMENT NOTICE

 

The statements set forth in this report which are not historical constitute "Forward-Looking Statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, including statements regarding our expectations, beliefs, intentions or strategies for the future.  When used in this report, the terms "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to our business or our subsidiaries or our management, are intended to identify Forward-Looking Statements.  These Forward-Looking Statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.  Forward-Looking Statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the Forward-Looking Statements.

 

Because our common stock is considered to be a "penny stock", the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995 do not apply to such Forward-Looking Statements.

 

Our business involves various risks, including, but not limited to, our ability to implement our business strategies as planned in a timely manner or at all; our lack of operating history; our ability to protect our proprietary technologies; our ability to obtain financing sufficient to meet our capital needs; our inability to use historical financial data to evaluate our financial performance; and the other risk factors identified in our filings with the Securities and Exchange Commission.

 

Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed or implied in any Forward-Looking Statements made by us or on our behalf, readers of this report should not place undue reliance on any Forward-Looking Statement.  Further, any Forward-Looking Statement speaks only as of the date on which it is made, and we undertake no obligations to update any Forward-Looking Statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of future events or developments.  New factors emerge from time to time, and it is not possible for us to predict which factors will arise.  In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any Forward-Looking Statements.

 

 

TABLE OF CONTENTS

 

TOPIC

Page

 

 

PART I   FINANCIAL INFORMATION

3

ITEM 1.     FINANCIAL STATEMENTS

3

ITEM 2:     MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

13

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

15

ITEM 4.     CONTROLS AND PROCEDURES

15

 

 

PART II   OTHER INFORMATION

16

ITEM 1.      LEGAL PROCEEDINGS

16

ITEM 1A.   RISK FACTORS

16

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

16

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

16

ITEM 4.     MINE SAFETY DISCLOSURES

16

ITEM 5.     OTHER INFORMATION

16

ITEM 6.     EXHIBITS

17

 

 

SIGNATURES

18


2


PART I - FINANCIAL INFORMATION

 

ITEM 1.      FINANCIAL STATEMENTS

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the SEC, and should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-Q for the fiscal year ended December 31, 2018, which we filed with the Securities and Exchange Commission (“SEC”) on April 16, 2019.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

 

 

 

GEOSPATIAL CORPORATION

INDEX

 

 

TOPIC

Page

 

 

FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

3

Condensed Consolidated Balance Sheets (Unaudited)

4

Condensed Consolidated Statements of Operations (Unaudited)

5

Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited)

6

Condensed Consolidated Statements of Cash Flows (Unaudited)

7

Notes to the Condensed Consolidated Financial Statements (Unaudited)

8


3


 

 

Geospatial Corporation and Subsidiaries

Consolidated Balance Sheets

                                                                                                                                                                            

                             

 

                             

 

September 30,

 

December 31,

 

2019

 

2018

 

(Unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

   Cash and cash equivalents

41,224   

 

7,117   

   Accounts receivable

37,300   

 

115,913   

   Prepaid expenses and other current assets

25,556   

 

80,664   

 

 

 

 

       Total current assets

104,080   

 

203,694   

 

 

 

 

Property and equipment:

 

 

 

   Field equipment

364,252   

 

357,070   

   Field vehicles

43,285   

 

43,285   

 

 

 

 

       Total property and equipment

407,537   

 

400,355   

       Less:  accumulated depreciation

(400,737)  

 

(398,063)  

 

 

 

 

       Net property and equipment

6,800   

 

2,292   

 

 

 

 

Total assets

110,880   

 

205,986   

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

Current liabilities:

 

 

 

   Accounts payable

169,331   

 

198,716   

   Accrued expenses

1,279,114   

 

1,323,586   

   Notes payable to related party

2,071,278   

 

1,758,424   

   Notes payable

59,911   

 

284,248   

   Accrued registration payment arrangement

76,067   

 

76,337   

 

 

 

 

       Total current liabilities

3,655,701   

 

3,641,311   

 

 

 

 

Stockholders' deficit:

 

 

 

Preferred stock: Undesignated, $0.001 par value; 20,000,000 shares authorized
at Sepbember 30, 2019 and December 31, 2018; no shares issued and outstanding
at September 30, 2019 and December 31, 2018

-   

 

-   

Series B Convertible Preferred Stock, $0.001 par value; 5,000,000 shares authorized
at September 30, 2019 and December 31, 2018; no shares issued and outstanding at
September 30, 2019 and December 31, 2018

-   

 

-   

Series C Convertible Preferred Stock, $0.001 par value; 10,000,000 shares authorized
at September 30, 2019 and December 31, 2018; 3,644,578 shares issued and outstanding
at September 30, 2019 and December 31, 2018

3,645   

 

3,645   

Common stock, $0.001 par value; 750,000,000 shares authorized
at September 30, 2019 and December 31, 2018; 370,911,784 and 325,077,118 shares
issued and outstanding at September 30, 2019 and December 31, 2018, respectively

370,912   

 

325,077   

   Additional paid-in capital

41,137,772   

 

40,438,183   

   Additional paid-in capital, warrants

83,663   

 

122,963   

   Accumulated deficit

(45,140,813)  

 

(44,325,193)  

 

 

 

 

       Total stockholders' deficit

(3,544,821)  

 

(3,435,325)  

 

 

 

 

Total liabilities and stockholders' deficit

110,880   

 

205,986   

 

 

The accompanying notes are an integral part of these consolidated financial statements.


4


 

 

Geospatial Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

                                                                                                             

                            

 

                            

 

                            

 

                            

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 30,

 

September 30,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

Sales

129,800   

 

259,554   

 

272,800   

 

700,122   

Cost of sales

38,827   

 

71,311   

 

83,136   

 

169,891   

 

 

 

 

 

 

 

 

   Gross profit

90,973   

 

188,243   

 

189,664   

 

530,231   

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

260,602   

 

299,962   

 

853,972   

 

1,151,087   

 

 

 

 

 

 

 

 

Net loss from operations

(169,629)  

 

(111,719)  

 

(664,308)  

 

(620,856)  

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

   Interest expense

(77,653)  

 

(100,060)  

 

(229,484)  

 

(314,338)  

   Gain on extinguishment of debt

-   

 

-   

 

78,121   

 

-   

   Other income

-   

 

-   

 

-   

 

1,711   

   Loss on disposal of property and equipment

-   

 

-   

 

-   

 

(1,856)  

   Gain on foreign currency exchange

-   

 

775   

 

51   

 

775   

 

 

 

 

 

 

 

 

       Total other income (expense)

(77,653)  

 

(99,285)  

 

(151,312)  

 

(313,708)  

 

 

 

 

 

 

 

 

Net loss before income taxes

(247,282)  

 

(211,004)  

 

(815,620)  

 

(934,564)  

 

 

 

 

 

 

 

 

Provision for income taxes

-   

 

-   

 

-   

 

-   

 

 

 

 

 

 

 

 

Net loss

$ (247,282)  

 

$ (211,004)  

 

$ (815,620)  

 

$ (934,564)  

 

 

 

 

 

 

 

 

Basic and fully-diluted net loss per share of common stock

$ (0.00)  

 

$ (0.00)  

 

$ (0.00)  

 

$ (0.00)  

 

 

The accompanying notes are an integral part of these consolidated financial statements.


5


 

 

Geospatial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders' Deficit

For the Nine Months Ended September 30, 2019

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Paid-In

 

 

 

 

 

Preferred Stock

 

Common Stock

 

Paid-In

 

Capital,  

 

Accumulated

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Warrants

 

Deficit

 

Total

                                                                                                                                 

                            

 

                            

 

                            

 

                            

 

                            

 

                            

 

                            

 

                            

Balance, December 31, 2018

3,644,578   

 

3,645   

 

325,077,118   

 

325,077   

 

40,438,183   

 

122,963   

 

$ (44,325,193)  

 

$ (3,435,325)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of common stock, net of issuance costs

-   

 

-   

 

21,666,667   

 

21,667   

 

300,133   

 

3,200   

 

-   

 

325,000   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

-   

 

-   

 

4,350,000   

 

4,350   

 

60,900   

 

-   

 

-   

 

65,250   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for registration penalty

-   

 

-   

 

18,000   

 

18   

 

252   

 

-   

 

-   

 

270   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in settlement of liabilities

-   

 

-   

 

14,799,999   

 

14,800   

 

207,200   

 

-   

 

-   

 

222,000   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of warrants to purchase common stock

-

 

-

 

5,000,000

 

5,000

 

87,500   

 

(42,500)  

 

-   

 

50,000   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of convertible securities with beneficial conversion features

-   

 

-   

 

-   

 

-   

 

43,604   

 

-   

 

-   

 

43,604   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the nine months ended September 30, 2019

-   

 

-   

 

-   

 

-   

 

-   

 

-   

 

(815,620)  

 

(815,620)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2019

3,644,578   

 

3,645   

 

370,911,784   

 

370,912   

 

41,137,772   

 

83,663   

 

$ (45,140,813)  

 

$ (3,544,821)  

 

 

The accompanying notes are an integral part of these consolidated financial statements.


6


 

 

Geospatial Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

                                                                                                                                                                           

                               

 

                               

 

For the Nine Months Ended

 

September 30,

 

2019

 

2018

Cash flows from operating activities:

 

 

 

Net loss

$ (815,620)  

 

$ (934,564)  

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

   Depreciation

2,674   

 

6,829   

   Loss on disposal of property and equipment

-   

 

1,856   

   Amortization of deferred debt issue costs

-   

 

114,204   

   Amortization of discount on notes payable

43,604   

 

36,357   

   Gain on extinguishment of debt

(78,121)  

 

-   

   Accrued interest payable

184,737   

 

162,240   

   Issuance of common stock for services

65,250   

 

107,700   

   Changes in operating assets and liablities:

 

 

 

       Accounts receivable

78,613   

 

(147,451)  

       Prepaid expenses and other current assets

55,108   

 

1,292   

       Accounts payable

(18,149)  

 

(43,229)  

       Accrued expenses

33,249   

 

255,664   

 

 

 

 

   Net cash used in operating activities

(448,655)  

 

(439,102)  

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchase or property and equipment

(7,182)  

 

-   

 

 

 

 

   Net cash used in investing activities

(7,182)  

 

-   

 

 

 

 

Cash flows from financing activities:

 

 

 

Proceeds from issuance of notes payable

-   

 

200,000   

Proceeds from issuance of notes payable to related parties

150,000   

 

-   

Principal payments on notes payable

(16,656)  

 

(107,123)  

Principal payments on notes payable to related parties

(18,400)  

 

-   

Proceeds from sale of common stock, net of offering costs

325,000   

 

246,000   

Proceeds from exercise of warrants to purchase common stock

50,000   

 

100,000   

 

 

 

 

   Net cash provided by financing activities

489,944   

 

438,877   

 

 

 

 

Net change in cash and cash equivalents

34,107   

 

(225)  

 

 

 

 

Cash and cash equivalents at beginning of period

7,117   

 

8,357   

 

 

 

 

Cash and cash equivalents at end of period

41,224   

 

8,132   

 

 

 

 

Supplemental disclosures:

 

 

 

Cash paid during period for interest

1,143   

 

1,695   

Cash paid during period for income taxes

-   

 

-   

Non-cash transactions:

 

 

 

   Issuance of common stock for services

65,250   

 

107,700   

   Issuance of common stock for registration penalty

270   

 

-   

   Issuance of convertible securities with beneficial conversion features

43,604   

 

36,357   

   Liabilities settled by issuance of notes payable

222,000   

 

175,653   

   Issuance of warrants to purchase common stock pursuant to issuance of notes payable

-   

 

25,800   

 

 

The accompanying notes are an integral part of these consolidated financial statements.


7


Geospatial Corporation and Subsidiaries

Notes to Unaudited Financial Statements

September 30, 2019


Note 1 – Basis of Presentation

 

The Unaudited Consolidated Financial Statements included herein have been prepared by Geospatial Corporation (the "Company") in accordance with accounting principles generally accepted in the United States of America for interim financial information and regulations issued pursuant to the Securities Exchange Act of 1934, as amended.  Accordingly, the accompanying Unaudited Consolidated Financial Statements do not include all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements.  The accompanying Unaudited Consolidated Financial Statements as of and for the nine months ended September 30, 2019 should be read in conjunction with the Company's Financial Statements as of and for the year ended December 31, 2018.  In the opinion of the Company's management, all adjustments considered necessary for a fair presentation of the accompanying Unaudited Consolidated Financial Statements have been included, and all adjustments, unless otherwise discussed in the Notes to the Unaudited Consolidated Financial Statements, are of a normal and recurring nature.  Operating results for the nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, or any other interim periods, or any future year or period.

 

The use of accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

The Consolidated Financial Statements include the accounts of the Company and its subsidiaries, Geospatial Mapping Systems, Inc. and Utility Services and Consulting Corporation, which ceased operations in 2011.  All intercompany accounts and transactions have been eliminated.

 

On June 12, 2019, the Company's board of directors appointed David M. Truitt as the Company's chief executive officer, director, and chairman of the Company's board of directors.  Accordingly, notes payable by the Company to Mr. Truitt that were presented as notes payable in the Company's financial statements as of and for the year ended December 31, 2018 have been reclassified to notes payable to related party.

 

 

Note 2 – Accrued Expenses

 

Accrued expenses consisted of the following:

 

 

 

September 30,

 

December 31,

 

 

2019

 

2018

 

 

 

 

 

Payroll and taxes

 

1,219,629   

 

1,170,091   

Accounting

 

50,730   

 

47,504   

Contractors and subcontractors

 

4,755   

 

5,300   

Interest

 

-   

 

2,918   

Other

 

4,000   

 

97,773   

 

 

 

 

 

Accrued expenses

 

1,279,114   

 

1,323,586   

 

 

Note 3 – Related-Party Transactions

 

David M. Truitt is the Company’s chairman and chief executive officer.  The Company has outstanding notes payable due to Mr. Truitt as follows:  

 

                                                                                                                                                

 

September 30,

        2019        

 

December 31,

        2018        

Secured Promissory Note, bearing interest at 20% per annum, net of discount and deferred issuance costs.  The note is convertible to common stock at the higher of 75% of the 10 day average bid price or $0.02 per share, and is secured by substantially all the assets of the Company.  The note is overdue, and the Company is in default

 

1,932,841   

 

1,758,424   

Secured Promissory Note, bearing interest at 10% per annum, and is secured by substantially all the assets of the Company

 

86,728   

 

-   

Secured Promissory Note, bearing interest at 20% per annum, and is secured by substantially all the assets of the Company

 

51,709   

 

-   

Notes payable to related party

 

2,071,278   

 

1,758,424   


8


Geospatial Corporation and Subsidiaries

Notes to Unaudited Financial Statements

September 30, 2019


Note 4 – Notes Payable

 

Notes payable consisted of the following:

 

                                                                                                                                                

 

September 30,

        2019        

 

December 31,

        2018        

 

Unsecured Convertible Promissory Notes, payable to two individuals, bearing interest at 15% per annum, net of deferred issuance costs.  The notes are convertible at the holder’s option to common stock at $0.015 per share  

 

-   

 

218,917   

 

Settlement agreements with vendors, bearing no interest.  

 

8,427   

 

13,847   

 

Notes payable under settlement agreements with former employees, payable monthly with terms of up to twelve months, bearing no interest

 

51,484   

 

51,484   

 

Notes payable

 

59,911   

 

284,248   

 


9


Geospatial Corporation and Subsidiaries

Notes to Unaudited Financial Statements

September 30, 2019


Note 5 – Income Taxes

 

The Company’s provision for (benefit from) income taxes is summarized below:

 

 

Three Months

Ended

September 30, 2019

 

Three Months

Ended

September 30, 2018

 

Nine Months

Ended

September 30, 2019

 

Nine Months

Ended

September 30, 2018

 

                                                   

                                

 

                                

 

                                

 

                                

 

Current:

 

 

 

 

 

 

 

 

   Federal

-   

 

-   

 

-   

 

-   

 

   State

-   

 

-   

 

-   

 

-   

 

 

-   

 

-   

 

-   

 

-   

 

Deferred:

 

 

 

 

 

 

 

 

   Federal

(46,676)  

 

(39,552)  

 

(153,760)  

 

(175,207)  

 

   State

(24,697)  

 

(20,927)  

 

(81,354)  

 

(92,702)  

 

 

(71,373)  

 

(60,479)  

 

(235,114)  

 

(267,909)  

 

Total income taxes

(71,373)  

 

(60,479)  

 

(235,114)  

 

(267,909)  

 

 

 

 

 

 

 

 

 

 

Less:  valuation allowance

71,373   

 

60,479   

 

235,114   

 

267,909   

 

 

 

 

 

 

 

 

 

 

Net income taxes

-   

 

-   

 

-   

 

-   

 

 

The reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

 

 

 

Nine months

Ended

September 30, 2019

 

Nine months

Ended

September 30, 2018

 

Federal statutory rate

 

21.0 %

 

21.0 %

 

State income taxes (net of federal benefit)

 

7.9   

 

7.9   

 

Valuation allowance

 

(28.9)  

 

(28.9)  

 

 

 

 

 

 

 

Effective rate

 

0.0 %

 

0.0 %

 

 

Significant components of the Company’s deferred tax assets and liabilities are summarized below.  A valuation allowance has been established as realization of such assets has not met the more-likely-than-not threshold requirement under FASB ASC 740.  

 

 

     September 30, 2019     

 

December 31, 2018

 

Start-up costs

429   

 

5,565   

 

Depreciation

(43,124)  

 

(40,499)  

 

Accrued expenses

285,544   

 

274,885   

 

Net operating loss carryforward

12,571,649   

 

12,182,800   

 

 

 

 

 

 

   Deferred income taxes

12,814,498   

 

12,422,751   

 

   Less:  valuation allowance

(12,814,498)  

 

(12,422,751)  

 

 

 

 

 

 

Net deferred income taxes

$ -   

 

$ -   

 


10


Geospatial Corporation and Subsidiaries

Notes to Unaudited Financial Statements

September 30, 2019


Note 6 – Net Income (Loss) Per Share of Common Stock

 

Basic net income (loss) per share of common stock are computed by dividing earnings available to common stockholders by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per share reflects per share amounts that would have resulted if dilutive potential common stock had been converted to common stock.  Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value.  The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities.  

 

The following reconciles amounts reported in the financial statements:

 

 

 

Three Months

Ended

September 30, 2019

 

Three Months

Ended

September 30, 2018

 

Nine Months

Ended

September 30, 2019

 

Nine Months

Ended

September 30, 2018

                                                                                                                               

                              

 

                              

 

                              

 

                              

Net income (loss)

$ (247,282)  

 

$ (211,004)  

 

$ (815,620)  

 

$ (934,564)  

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock outstanding

366,455,262   

 

316,231,105   

 

350,391,184   

 

305,154,311   

Dilutive potential shares of common stock

366,455,262   

 

316,231,105   

 

350,391,184   

 

305,154,311   

 

 

 

 

 

 

 

 

Net income (loss) per share of common stock:

 

 

 

 

 

 

 

   Basic

$ (0.00)  

 

$ (0.00)  

 

$ (0.00)  

 

$ (0.00)  

   Diluted

$ (0.00)  

 

$ (0.00)  

 

$ (0.00)  

 

$ (0.00)  

 

The following securities were not included in the computation of diluted net loss per share, as their effect would have been anti-dilutive:  

 

 

Three Months

Ended

September 30, 2019

 

Three Months

Ended

September 30, 2018

 

Nine Months

Ended

September 30, 2019

 

Nine Months

Ended

September 30, 2018

                                                                                                                               

                              

 

                              

 

                              

 

                              

Series C Convertible Preferred Stock

72,891,560   

 

72,891,560   

 

72,891,560   

 

72,891,560   

Options and warrants to purchase common stock

2,594,737   

 

8,257,065   

 

4,171,545   

 

8,257,065   

Secured Promissory Note

95,172,575   

 

83,512,850   

 

92,281,600   

 

68,761,757   

Unsecured Promissory Notes

 

 

13,827,767   

 

7,297,233   

 

7,041,667   

 

 

 

 

 

 

 

 

Total

170,658,872   

 

178,489,242   

 

176,641,938   

 

156,952,049   


11


Geospatial Corporation and Subsidiaries

Notes to Unaudited Financial Statements

September 30, 2019


Note 7 – Stock-Based Payments

 

During the nine months ended September 30, 2019, the Company granted warrants to purchase 2,833,332 shares of the Company’s common stock to investors in connection with investments in the Company’s common stock.  

 

During the nine months ended September 30, 2019, the Company granted 4,350,000 shares of the Company’s common stock to consultants in consideration for services rendered.  The Company recorded expense of $65,250, the fair value of the services received.  

 

During the nine months ended September 30, 2019, the Company granted stock appreciation rights on 2,100,000 shares of common stock to eligible employees pursuant to the 2013 Equity Incentive Plan.    

 

 

Note 8 – Gains on Extinguishment of Debt

 

Due to significant cash flow problems, the Company has negotiated concessions on the amounts of certain liabilities and extensions of payment terms.  The Company accounts for such concessions in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 470-60, Troubled Debt Restructurings by Debtors, and ASC 405-20, Extinguishment of Liabilities, and recognizes gains to the extent that the carrying value of the liability exceeds the fair value of the restructured payment plan.  Such gains are included as “Gains on extinguishment of debt” in “Other income and expenses” on the Company’s Consolidated Statement of Operations.  In addition, the Company has accounts payable that have aged or are expected to age beyond the statute of limitations.  The Company is amortizing those liabilities over the remaining term of the statute of limitations.  During the nine months ended September 30, 2019, the Company recorded gains on extinguishment of debt of $78,121.  No gains on extinguishment of debt were recorded during the nine months ended September 30, 2018.  

 

 

Note 9 – Registration Payment Arrangements

 

The Company is contractually obligated to issue shares of its common stock to certain investors for failure to register shares of its common stock under the Securities Act of 1933, as amended (the “Securities Act”).  The Company has recorded a liability for the estimated number of shares to be issued at the fair value of the stock to be issued.  The Company measures fair value by the price of its common stock at its most recent sale.  The Company reviews its estimate of the number of shares to be issued and the fair value of the stock to be issued quarterly.  The liability is included on the Consolidated Balance Sheet under the heading “accrued registration payment arrangement,” and amounted to $76,067 and $76,337 at September 30, 2019 and December 31, 2018, respectively.  Gains or losses resulting from changes in the carrying amount of the liability are included in the Consolidated Statement of Operations in other income and expense under the heading “registration payment arrangements”.  The Company had no gain or loss from registration payment arrangements during the nine months ended September 30, 2019 and 2018.  


12



ITEM 2:   MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of the Company and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

 

Readers are urged to carefully review and consider the various disclosures made by the Company in this report and in its other reports filed with the Securities and Exchange Commission. Important factors currently known to the Company could cause actual results to differ materially from those in forward-looking statements. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. The Company believes that its assumptions are based upon reasonable data derived from and known about its business and operations. No assurances are made that actual results of operations or the results of the Company’s future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, expected market demand for the Company’s services, fluctuations in pricing for materials, and competition.

 

The financial statements as of and for the years ended December 31, 2018 and 2017 include a summary of our significant accounting policies and should be read in conjunction with the discussion below.  In the opinion of management, all material adjustments necessary to present fairly the consolidated results of operations for such periods have been included in these audited consolidated financial statements. All such adjustments are of a normal recurring nature.

 

Overview

 

We provide cloud-based geospatial solutions to accurately locate and digitally map underground pipelines and other infrastructure in three dimensions. Our professional staff offers the expertise, ability, and technologies required to design and execute solutions that are delivered in a cloud-based GIS (geographic information system) platform.

 

We believe that the market for aggregating and maintaining positional data for underground assets is maturing, and that business and governmental entities are beginning to understand the value of such data.  We believe that this developing market presents us with an opportunity to deliver long-term value to our shareholders.  In order to realize that value, our primary challenge is to raise working capital sufficient to operate our business, and investment capital to hire employees, acquire assets, and expand our business.  Management is currently  planning to position our business to capitalize on the maturing market for positional data, including identifying new technologies for aggregating positional data, developing proprietary deliverables that enable the Company to deliver value to our customers quickly and inexpensively, and planning the strategies and processes for our upcoming marketing campaigns.  We use financial and non-financial performance indicators to assess our business, including liquidity measures, revenues, gross margins, operating revenue, and backlog.

 

Results of Operations

 

The following discussion should be read in conjunction with our financial statements for the periods ended September 30, 2019 and 2018 and the related notes thereto.

 

Results of Operations for the Three and Nine months ended September 30, 2019 and 2018

 

We had sales of $129,800 and $272,800 during the three and nine months, respectively, ended September 30, 2019.  Cost of sales was $38,827 and $83,136 for the three and nine months, respectively, ended September 30, 2019.  Sales were $259,554 and $700,122 during the three and nine months, respectively, ended September 30, 2018.  Cost of sales was $71,311 and $169,891 for the three and nine months, respectively, ended September 30, 2018.  Our sales have fluctuated throughout 2019 and 2018 as our ability to market and perform jobs was hampered by our financial condition.  We expect sales and cost of sales to continue to fluctuate as our business continues to mature.

 

Selling, general, and administrative (“SG&A”) expenses were $260,602 and $853,972 for the three and nine months, respectively, ended September 30, 2019.  SG&A expenses were $299,962 and $1,151,087 for the three and nine months, respectively, ended September 30, 2018.  The decreases in SG&A costs for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 were due to a decrease in payroll cost due to the resignation of our former chief executive officer and reductions in sales and technical headcount.  The reduction in SG&A expense for the nine-month periods is also due to a decrease in insurance expense due to a reduction in insurance coverage.   

 

Other income and expense for the three and nine months ended September 30, 2019 was net expense of $77,653 for the three months ended September 30, 2019, which consisted entirely of interest expense, and net expense of $151,312 for the nine months ended September 30, 2019, which included interest expense of $229,484, gain on extinguishment of debt of $78,121, and gain on foreign currency exchange of $51.  Other income and expense for the three and nine months ended September 30, 2018 was net expense of $99,285 for  the three months ended September 30, 2018, which included interest expense of $100,060, and a gain on foreign currency exchange of $775, and net expense of $313,708 for the nine months ended September 30, 2018, which included interest expense of $314,338, other income of $1,711, a loss on disposal of equipment of $1,856, and gain on foreign currency exchange of $775.  The decrease in interest expense in 2019 was due to amortization of deferred debt issuance costs on the Truitt Notes that were fully amortized in 2018.  The Company had no such amortization expense in 2019.  The gain on extinguishment of debt in 2019 was due to forgiveness of debt by our former chief executive officer upon his resignation.  

 

Gains or expense related to registration payment arrangements result from a series of Stock Subscription Agreements we entered into in 2009 and 2010 (the “Stock Subscription Agreements”).  We were required to register the shares of common stock sold pursuant to the Stock Subscription Agreements under the Securities Act.  Our failure to timely register the shares of common stock under the Securities Act timely resulted in our obligation to issue additional shares (“Penalty Shares”) to investors who purchased shares pursuant to the Stock Subscription Agreements.  We recorded a liability on our books for the value of the estimated number of shares to be issued.  We incur losses on our registration payment arrangements when the estimated number of Penalty


13



Shares to be issued increases, or when the value of our common stock increases.  We record gains on our registration payment arrangements when the estimated number of Penalty Shares to be issued decreases, or when the value of our common stock decreases.  We had no gains or losses related to registration payment arrangements during the three and nine months ended September 30, 2019 and 2018.  We expect that income or expense related to registration payment arrangements will fluctuate as the price of our common stock and the estimate of the number of Penalty Shares to be issued fluctuate.

 

We had no benefit from income taxes during the three and nine months ended September 30, 2019 and 2018, as our deferred tax benefit was completely offset by a valuation allowance due to the uncertainty of realization of the benefit.

 

Liquidity and Capital Resources

 

At September 30, 2019, we had current assets of $104,080, and current liabilities of $3,655,701.  Our Company has incurred net losses since inception.  Our operations and capital requirements have been funded by sales of our common and preferred stock, advances from our chief executive officer, and issuance of notes payable.  At September 30, 2019, current liabilities exceeded current assets by $3,551,621, and total liabilities exceeded total assets by $3,544,821.  Those factors raise doubts about our ability to continue as a going concern.

 

On April 2, 2015, we entered into a Note and Warrant Purchase Agreement with David M. Truitt, pursuant to which Mr. Truitt loaned us $1,000,000 pursuant to a Secured Note Payable (as amended, the “Truitt Note”) that is secured by substantially all of the Company’s assets, and is convertible at the holder’s option to shares of the Company’s common stock at a discount to our trading value.  Mr. Truitt was appointed as the Company’s chief executive officer and chairman of the board of directors on June 12, 2019.  The Truitt Note was originally due on October 2, 2015.  On January 26, 2016, we entered into an Agreement and Amendment with Mr. Truitt (the “January 2016 Amendment”), pursuant to which Mr. Truitt loaned us an additional $250,000, and extended the due date of the Truitt Note to July 31, 2016.  We also issued Mr. Truitt warrants to purchase 25.0 million shares of our common stock in connection with the January 2016 Amendment.  On August 12, 2016, we entered into an Agreement and Amendment with Mr. Truitt (the “August 2016 Amendment”), pursuant to which Mr. Truitt agreed to extend the maturity date of the Truitt Note to January 31, 2017, in consideration for the Company issuing to Mr. Truitt warrants to purchase 12.0 million shares of the Company’s common stock.  On November 9, 2016, we made a payment of $200,000 of the balance of the Truitt Note.  On December 14, 2016, we entered into a Note and Warrant Purchase Agreement (together with the Truitt Note, as amended, the “Truitt Notes”) with Mr. Truitt, pursuant to which Mr. Truitt loaned the Company an additional $100,000 subject to the terms of the Truitt Note, and the Company issued to Mr. Truitt warrants to purchase 100,000 shares of the Company’s common stock.  On August 31, 2017, we entered into an Agreement and Amendment with Mr. Truitt (the “August 2017 Amendment”) pursuant to which (i) the maturity date of the Truitt Notes were extended to June 1, 2018;  (ii) the price at which the Truitt Notes are convertible to shares of the Company’s common stock was amended to institute a floor of $0.02 per share;  (iii) the interest rate on the Truitt Notes were amended to 15% per annum effective upon the execution of the August 2017 Amendment;  (iv) the events of default under the Truitt Notes were waived; and (v) the Company delivered to Mr. Truitt a warrant to purchase 20.0 million shares of the Company’s common stock at a price of $0.01 per share.   On June 15, 2018, we entered into an Agreement to Amend Notes and Security Agreements with Mr. Truitt, pursuant to which (i) the due dates on the Truitt Notes were extended to September 15, 2018; (ii) the event of default of June 1, 2018 was waived; (iii) the Company agreed to use a portion of newly-raised capital to repay a portion of the Truitt Notes; (iv) the governing law, jurisdiction, and venue of the Truitt Notes was changed to Fairfax County, Virginia; and (v) increase the interest rate to 20% effective June 1, 2018.  We currently do not have the ability to pay the Truitt Notes.

 

During 2018, we sold approximately 22.1 million shares of common stock for a net consideration of $326,000, and received $100,000 for the exercise of warrants to purchase 10.0 million shares of common stock.  In addition, we issued approximately 7.2 million shares of stock for services with a fair value of $107,700, and converted approximately $176,000 of liabilities to notes payable.  We also issued $200,000 of unsecured convertible promissory notes.

 

From January 1, 2019 through November 8, 2019, we sold approximately 21.7 million shares of common stock for a net consideration of approximately $325,000, and issued approximately 4.4 million shares of common stock for services with a fair value of approximately $65,000.  In addition, we converted liabilities with a fair value of approximately $222,000 to approximately 14.8 million shares of common stock.  We also issued promissory notes totaling $150,000 to Mr. Truitt for cash (the “2019 Truitt Notes”).  The 2019 Truitt Notes require us to remit 50% of our collections on accounts receivable to Mr. Truitt until the 2019 Truitt Note and accrued interest are paid in full, and thereafter requires us to remit 25% of our collections on accounts receivable until the Truitt Notes are paid in full.  In addition, Mr. Truitt exercised warrants to purchase 5.0 million shares of the Company’s common stock for consideration of $50,000.  

 

Management is continuing its efforts to secure funding sufficient for the Company’s operating and capital requirements through private sales of common stock and issuance of notes payable, and to negotiate settlements or extensions of existing liabilities.  The proceeds of such sales of stock or issuances of notes payable, if any, will be used to repay the Truitt Notes and to fund general working capital needs.

 

We changed the focus of our company to position us to generate revenue from both data acquisition and data management.  We expanded our service offerings to provide data acquisition services utilizing several technologies.  We have established a powerful cloud-based environment where we are developing proprietary deliverables that enable the Company to automate data processing and deliver value to our customers quickly and inexpensively.  We believe that our changes to our operating focus will enable us to begin to generate significant revenue from operations.

 

We believe that our actions and planned actions will enable us to finance our operations beyond the next twelve months.

 

We do not believe that inflation and changing prices will have a material impact on our net sales and revenues, or on income from continuing operations.

 

Off-Balance Sheet Arrangements

 

The Company had no off-balance sheet arrangements as of September 30, 2019.

 

Contractual Obligations

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.


14



Critical Accounting Policies and Estimates

 

Use of Estimates in Financial Statements

 

We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.  Estimates and assumptions which, in our opinion, are significant to the underlying amounts included in the financial statements and for which it would be reasonably possible that future events or information could change those estimates include:

 

Registration Payment Arrangements.  

 

We are contractually obligated to issue shares of our common stock to certain investors for failure to timely register their shares of our common stock under the Securities Act. We have recorded a liability for the estimated number of shares to be issued at the fair value of the stock to be issued.  We review on a quarterly basis our estimate of the number of shares to be issued and the fair value of the stock to be issued.

 

Realization of Deferred Income Tax Assets.

 

We provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between financial reporting and tax accounting methods and any available operating loss or tax credit carryovers. At September 30, 2019, we had a deferred tax asset resulting principally from our net operating loss deduction carryforward available for tax purposes in future years.  This deferred tax asset is completely offset by a valuation allowance due to the uncertainty of realization.  We evaluate the necessity of the valuation allowance quarterly.

 

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 under this item.

 

ITEM 4.   CONTROLS AND PROCEDURES.

 

Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the United States Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow timely decisions regarding required disclosure.

 

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of Company management, including the Chief Executive Officer (Principal Executive Officer) and the Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to the Securities Exchange Act of 1934 (“Exchange Act”) Rules 13a-15(e) and 15d-15(e). Based upon, and as of the date of this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the three months ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


15



PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

 

We are not currently involved in any pending or threatened material litigation or other material legal proceedings, nor have we been made aware of any pending or threatened regulatory audits.

 

ITEM 1A.   RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On September 20, 2019, the Company issued 5,000,000 shares of its common stock to its Chief Executive Officer upon exercise of warrants at an exercise price of $0.01 per share for an aggregate sales price of $50,000.  The issuance took place in a private placement transaction pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) of the Securities Act and/or Regulation D.  The purchaser is an accredited investor, and the Company conducted the private placement without any general solicitation or advertisement, and with a restriction on resale.

 

The recipient of the securities in the transaction described above represented his intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificate issued in this transaction. The recipient has adequate access, through his relationships with us, to information about us.

 

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES 

 

The Company's Secured Promissory Notes, with an aggregate outstanding balance of approximately $1,932,840 at September 30, 2019, were due on September 15, 2018.  The Company failed to repay principal and interest due under the notes as required, and consequently incurred an Event of Default. 

 

ITEM 4.   MINE SAFETY DISCLOSURES

 

Not Applicable.

 

ITEM 5.   OTHER INFORMATION

 

None.  


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ITEM 6.   EXHIBITS

 

Exhibit                

 

Description

 

 

 

31.1

 

Rule 13a-14(a) Certification of David M. Truitt

31.2

 

Rule 13a-14(a) Certification of Thomas R. Oxenreiter

32.1

 

Section 1350 Certification of Chief Executive Officer

32.2

 

Section 1350 Certification of Chief Financial Officer

 

 

 

101 INS*

 

XBRL Instance Document

101 SCH*

 

XBRL Taxonomy Schema

101 CAL*

 

XBRL Taxonomy Extension Calculation Linkbase

101 DEF*

 

XBRL Taxonomy Extension Definition Linkbase

101 LAB*

 

XBRL Taxonomy Extension Label Linkbase

101 PRE*

 

XBRL Taxonomy Extension Presentation Linkbase


17



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 hereunto duly authorized.

 

 

Date: November 18, 2019

Geospatial Corporation (Registrant)

 

By:

/S/  DAVID M. TRUITT

 

Name:

Title:

David M. Truitt

Chief Executive Officer

 

 

 

 

 

By:

/S/  THOMAS R. OXENREITER

 

Name:

Title:

Thomas R. Oxenreiter

Chief Financial Officer


18