UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


[X]   

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

For the fiscal year ended December 31, 2016

OR

[  ]

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

Commission file number: 0-54892


INSYNERGY PRODUCTS, INC

 (Exact name of registrant as specified in its charter)

   

Nevada

 

27-1781753

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

   

2501 West Burbank Blvd., Suite 201, Burbank, CA

(Address of principal executive offices)

 

91505

(Zip Code)

 

Registrant’s telephone number, including area code:  (818) 260-9370

 

Securities registered under Section 12(b) of the Act:  None

 

Securities registered under Section 12(g) of the Act:  Common Stock


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  [  ]    No  [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  [  ]    No  [X]

 

Indicate by check mark whether the registrant (1) 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   [X]    No  [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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  [ X ]     No  [  ]

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [  ]

Non-accelerated filer [  ]

Accelerated filed [  ]

Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  [  ]    No  [X]

 

The aggregate market value of the 16,775,048 shares of voting and non-voting common equity held by non-affiliates computed by reference to the closing price ($0.25) at which the common equity was last sold as of the last business day of its most recently completed second fiscal quarter (June 30, 2016) was approximately $4,193,762.

 

At March 27, 2017, there were 27,605,564 shares of the registrant’s common stock outstanding.


2


Table of Contents

 

 

 

PART I

 

 

Page

Item 1.

Business

3

 

 

Item 1A.

Risk Factors

5

 

 

Item 2.

Property

5

 

 

Item 3.

Legal Proceedings

5

 

 

Item 4.

Mine Safety Disclosures

5

 

 

 

PART II

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters  and Issuer Purchases of Equity Securities

5

 

 

Item 6.

Selected Financial Data

6

 

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

6

 

 

Item 7A.

Quantitative and Qualitative Disclosure About Market Risk

8

 

 

Item 8.

Financial Statements and Supplementary Data

9

 

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

24

 

 

Item 9A.

Controls and Procedures

24

 

 

Item 9B.

Other Information

25

 

 

 

PART III

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

26

 

 

Item 11.

Executive Compensation

28

 

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management  and Related Stockholder Matters

29

 

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

31

 

 

Item 14.

Principal Accountant Fees and Services

32

 

 

Item 15.

Exhibits, and Financial Statement Schedules

33

 

 

 

Signatures

34



3



PART I


Item 1.  BUSINESS

 

Our Business

 

Insynergy Products Inc. (the “Company”) (“Insynergy”) was incorporated in the State of Nevada on January 26, 2010, to engage in Direct Response marketing of consumer products with the goal of producing sales through television and/or retail.

 

Forward Looking Statements

 

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-K involve risks and uncertainties, including statements as to:

 

        ·our future operating results;

        ·our business prospects;

        ·our contractual arrangements and relationships with third parties;

        ·the dependence of our future success on the general economy;

        ·our possible future financings; and

        ·the adequacy of our cash resources and working capital.

 

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this Form 10-K, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

 

Plan of Operations

 

Insynergy Products was a company with experience in commercializing consumer products through commercial and infomercial production development. The corporate goal was to develop intellectual property (“IP”) internally or via a license from a third party; however, due to the inability to raise funds the Company has abandoned this strategy. The Board of Directors is cognizant of the Company’s limitations. The Company currently has no revenue from current operations, with liabilities exceeding its assets. Management is analyzing new potential growth paths and the potential for a restructuring; however, there is still substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is currently performing its due diligence for a corporate reorganization. This due diligence phase, involving counsel and other qualified professionals is necessary in order to cautiously explore appropriate steps to restructure the Company for the purposes of executing a new business model within the Company’s core competencies.  


The Company has taken some preliminary steps in executing this vision; however, there are several hurdles the Company expects to encounter that may prevent this reorganization from coming to fruition.  

 

The reorganization may include restructuring the Company’s capital structure and a change or evolution in the Company's business model.  This potential reorganization may also include consummating new strategic relationships in manufacturing, marketing and sales and may also include licensing existing brands. Through these potential new partnerships, the Company intends to explore the commercialization of key products that may have a competitive advantage in the consumer products space.  In the event of this potential reorganization, the Company is in discussions with new personnel that may become part of the senior management to assist the Company going forward. 


If this reorganization occurs the projected timeline is for the reorganization to occur during the first half of 2017 and would include a change in name. Although the strategy is evolving, the Company’s goals are to again become a cutting-edge supplier in the consumer market place with the ultimate goal of increasing shareholder value.  

 

The Company will continue to evaluate this and other opportunities to further set its strategy for 2017 and 2018.

 


4


Employees

 

The Company has two full-time employees, but will use independent contractors from time to time on an as needed basis.

 

Item 1A.  RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.


Item 2.  PROPERTIES

 

Our principal offices are located at 2501 West Burbank Blvd., Suite 201, Burbank, California, 91505.  In December 2015, the Company entered into a three-year lease, starting January 1, 2016, with Burbank Properties, L.P. for 1,957 square feet of office space. Current monthly lease payments are $3,527 with yearly increases during the term of the lease. The lease also provides an option to extend the lease for an additional three years upon expiration of the current lease term. The lease may be terminated with a 10-day written notice from the landlord for violation of the lease terms.  The Company considers the space to be adequate for the next several years.

 

Item 3.  LEGAL PROCEEDINGS

 

The Company is not a party to any legal proceedings.

 

Item 4.  Mine Safety Disclosures

 

Not applicable.


PART II


Item 5.  MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Our common stock is listed to trade on the OTC Markets Group OTCQB tier under the symbol “ISYG.”  The following table presents the range of the high and low trading prices of our common stock for each quarter of the years ended December 31, 2016 and 2015 as reported by the OTC Markets.  Bid and ask quotations are available when there are two or more market makers and those quotations represent prices between dealers and may not include retail markups, markdowns, or commissions and may not necessarily represent actual transactions.

Fiscal Year Ended December 31, 2016

Quarter Ended

  

High $

  

Low $

March 31, 2016

  

$0.21

 

$0.21

June 30, 2016

  

$0.25

 

$0.25

September 30, 2016

  

$0.20

 

$0.20

December 31, 2016

  

$0.18

 

$0.18

  

Fiscal Year Ending December 31, 2015

Quarter Ended

  

High $

  

Low $

March 31, 2015

  

$3.25

 

$3.25

June 30, 2015

  

$0.75

 

$0.51

September 30, 2015

  

$0.18

 

$0.18

December 31, 2015

  

$0.25

 

$0.25

 


5


Our shares are subject to Section 15(g) and Rule 15g-9 of the Securities and Exchange Act, commonly referred to as the “penny stock” rule.  The rule defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. These rules may restrict the ability of broker-dealers to trade or maintain a market in our common stock and may affect the ability of shareholders to sell their shares.  Broker-dealers who sell penny stocks to persons other than established customers and accredited investors must make a special suitability determination for the purchase of the security. Accredited investors, in general, include individuals with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse, and certain institutional investors. The rules require the broker-dealer to receive the purchaser’s written consent to the transaction prior to the purchase and require the broker-dealer to deliver a risk disclosure document relating to the penny stock prior to the first transaction. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the security.  Finally, monthly statements must be sent to customers disclosing recent price information for the penny stocks.

 

Holders

 

As of March 22, 2017, we had 166 shareholders of record, which does not include shareholders who hold shares in “street accounts” of securities brokers.

 

Dividends

 

We have not paid cash or stock dividends and have no present plan to pay any dividends, intending instead to reinvest our earnings, if any.  For the foreseeable future, we expect to retain any earnings to finance the operation and expansion of our business and the payment of any cash dividends on our common stock is unlikely.

 

Recent Sales of Unregistered Securities

 

On December 31, 2016, the Company converted debt totaling $299,000 of principal and $2,000 of interest into 1,308,696 shares of common stock. The shares were issued at $0.23, no gain or loss was recognized on the conversion. We relied on an exemption from the registration requirements provided by Section 4(a) (2) of the Securities Act.

 

Issuer Purchase of Securities

 

The Company did not repurchase any of its securities during the fiscal year ended December 31, 2016.


Item 6.  SELECTED FINANCIAL DATA

 

The registrant is a smaller reporting company, pursuant to Rule 229.10(f)(1), and is not required to report this information.


 Item 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND  RESULTS OF OPERATIONS

 

Results of Operations for the year ended December 31, 2016 compared to the year ended December 31, 2015

The following information should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Form 10-K.

 

Revenues

 

For the year ended December 31, 2016 the Company recorded revenue of $426,154, net of returns and allowances of $19,811 compared to revenue, net of sales returns and allowances of $590,023 and mark down program of $165,138, of $1,496,586 for the year ended December 31, 2015. In the current year $388,013 of revenue was from the accrued product returns and allowance account. This revenue is not from sales in the current period. It is from sales made in 2015 and held in reserve in the event of subsequent returns (Note 4). Cost of goods sold was $(503,946) compared to $1,118,378 in the prior period. In the current year $373,512 was a result of the impairment of all remaining finished and work in process inventory of Plumber’s Hero.

 


6


Operating Expenses

 

For the year ended December 31, 2016, compensation expense increased $29,439 to $282,711 compared to $253,272 for the year ended December 31, 2015. The increase is due to increasing the yearly salary for two of our officers in July of 2015.

 

For the year ended December 31, 2016, the Company incurred $36,830 in advertising and promotional expense as compared to $584,061 for the prior year, a decrease of $547,241, or 99.8%. In the prior year, there was substantial spending on promotional activities for the Plumber’s Hero. There have been no such expenditures in the current period; however, we did recognize $52,059 that was previously in prepaid expenses for promotional activities that will no longer be completed and for which there will be no refunds.

 

For the year ended December 31, 2016, the Company incurred $63,444 in professional fees compared to $103,871 in the prior year, a decrease of $40,427, or 38.9%. Professional fees are mainly for accounting, auditing and legal services associated with our quarterly filings as a public company.

 

For the year ended December 31, 2016, the Company incurred $245,719 in general and administrative expense as compared to $916,623 for the prior year, a decrease of $670,904, or 73.1%. The decrease is in conjunction with our decreased business activities as we pursue a potential restructuring.

 

On August 13, 2015, the Company signed a binding Letter of Intent with a third party whereby the Company acquired the license rights to a series of products. Per the terms of the Letter of Intent, and the Warrant Agreement dated September 15, 2015, the Company issued 35 million warrants to the third party to purchase common stock. The aggregate fair value of the warrants totaled $6,501,715 which has been recorded as licensing expense for the year ended December 31, 2015.

 

Other income and expense

 

For the year ended December 31, 2016 we had total other expense of $7,375 compared to total other expense of $257,241 for the year ended December 31, 2015. For the year ended December 31, 2016 we had interest expense of $7,319 and a loss on disposal of fixed assets of $20,461 that were offset by a gain on forgiveness of debt of $20,435. For the year ended December 31, 2015, the Company recorded interest expense of $23,184, a loss on disposal of fixed assets of $17,034 and a loss on conversion of debt of $226,811. In addition, as a result of the convertible Promissory Note with KBM Worldwide, Inc. we recorded amortization of debt discount of $50,029, a gain on settlement of debt of $62,859, and a gain on derivative of $3,042.


Net loss

 

For the year ended December 31, 2016, the Company recorded a net loss of $714,031 as compared to a net loss of $8,328,575 in the prior year, a decrease of $7,524,544. The decrease is mainly contributed to not having the license expense in the current year as well as to a decrease in advertising and marketing and general and administrative expense.


Liquidity and Capital Resources


As reflected in the accompanying financial statements, the Company has an accumulated deficit of $15,369,988 at December 31, 2016, had a net loss of $714,031 and net cash used in operating activities of $49,069 for year ended December 31, 2016.

 

The Company currently has no revenue from current operations, with liabilities exceeding its assets. Management is analyzing new potential growth paths and the potential for a restructuring; however, there is still substantial doubt about the Company’s ability to continue as a going concern.

 

Critical Accounting Estimates and Policies

 

The 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 reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Note 1 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes.  Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

 


7


We are subject to various loss contingencies arising in the ordinary course of business.  We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies.  An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated.  We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

 

We recognize deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities.  The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled.  Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred tax asset will be realized.

  

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 

Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

In May 2014, August 2015, April 2016 and May 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09 (ASC Topic 606), Revenue from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016- from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016-10 (ASC Topic 10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. This standard may be applied process of assessing the impact, if any, on its consolidated financial statements.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this standard will have on our financial statements.

 

In June 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force.” The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The ASU is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including interim periods within those fiscal years. An entity that elects early adoption must adopt all of the amendments in the same period. The guidance requires application using a retrospective transition method. The Company is currently evaluating the effects, if any, that the adoption of this guidance will have on the Company’s consolidated cash flows.

 

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to smaller reporting companies.



8


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INSYNERGY PRODUCTS, INC.

INDEX TO FINANCIAL STATEMENTS

 

 

Report of Independent Registered Public Accounting Firm

 10

 

Balance Sheets as of December 31, 2016 and 2015

 11

 

Statements of Operations for the years ended December 31, 2016 and 2015

12

    

Statements of Cash Flows for years ended December 31, 2016 and 2015

 13

 

Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2016 and 2015

 14

 

Notes to the Financial Statements

 15


 


9



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and
Stockholders of Insynergy Products, Inc.

We have audited the accompanying balance sheets of Insynergy Products, Inc. as of December 31, 2016 and 2015, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two year period then ended. Insynergy Product Inc.’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 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 also 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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Insynergy Products, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the two year period then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations since inception and its current cash flow is not enough to meet current needs. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to this matter are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Haynie & Company

Salt Lake City, Utah

March 31, 2017



10


 


INSYNERGY PRODUCTS, INC.

BALANCE SHEETS

  
  

December 31, 2016

  

December 31, 2015

ASSETS

  

 

  

Current Assets:

  

 

  

    Cash

$

-

 

$

40,485

Accounts receivable

 

-

  

158,482

    Inventory

 

-

  

503,946

    Prepaid consulting

 

-

  

16,324

    Prepaid and other assets

 

6,601

  

67,748

        Total Current Assets

  

 

 

786,985

   

 

  

    Deposit

 

3,500

 

 

10,161

    Property and equipment, net

 

-

 

 

35,300

        Total Assets

$

10,101

 

$

832,446

 

  

 

  

LIABILITIES AND STOCKHOLERS' EQUITY (DEFICIT)

 

 

  

Current Liabilities:

  

 

  

    Accounts payable

$

417,387

 

$

522,100

    Other payables and accruals

 

270,988

 

 

223,615

    Product returns & allowances

 

-

  

609,770

    Accrued compensation

 

87,850

  

226,556

    Due to an officer

 

1,393

  

3,253

    Notes payable

 

21,400

  

370,671

        Total Current Liabilities

 

799,018

 

 

1,955,965

       Total Liabilities

 

799,018

 

 

1, 955,965

Stockholders' Equity (Deficit):

  

 

  

Common Stock par value $0.001 300,000,000 shares authorized, 27,605,564 and 26,296,868 shares issued, respectively

 

27,607

 

 

26,298

Additional paid in capital

 

14,553,464

 

 

13,506,140

Retained deficit

 

(15,369,988)

 

 

(14,655,957)

Total Stockholders' Equity (Deficit)

 

(788,917)

 

 

(1,123,519)

Total Liabilities and Stockholders' Equity (Deficit)

$

10,101

 

$

832,446

 

 

 

 

  

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


11



INSYNERGY PRODUCTS, INC.

STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

For the Years Ended December 31,

 

 

2016

 

 

2015

      

Revenues

$

445,965

 

 $

2,086,609

Sales returns and allowances

 

(19,811)

  

(590,023)

Net revenue

 

426,154

  

1,496,586

Costs of goods sold

 

503,946

 

 

1,118,378

      Gross margin

 

(77,792)

 

 

378,208

 

 

  

 

 

Operating Expenses:

 

  

 

 

    Compensation expense

 

282,711

 

 

253,272

    Advertising and promotion

 

36,820

  

584,061

    Professional fees

 

63,444

  

103,871

 Licensing expense

 

-

  

6,501,715

    General and administrative

 

245,719

 

 

916,623

        Total operating expenses

 

628,894

 

 

8,359,542

 

 

  

 

 

Loss from operations

 

(706,686)

 

 

(7,981,334)

 

 

  

 

 

Other Income (Expense):

 

  

 

 

    Interest expense

 

(7,319)

 

 

(23,184)

Amortization of debt discount

 

-

  

(50,029)

Loss on disposal of assets

 

(20,461)

  

(17,034)

Loss on conversion of debt

 

-

  

(226,811)

Change in fair value of derivative liability

 

-

  

(3,042)

    Gain on extinguishment of debt

 

20,435

  

62,859

 Total other income (expense)

 

7,375

 

 

(257,241)

 

 

  

 

 

    Net Loss

$

(714,031)

 

 $

(8,238,575)

 

 

  

 

 

Loss per Share, Basic & Diluted

$

(0.02)

 

 $

(0.32)

Weighted Average Shares Outstanding

 

26,300,453

 

 

26,094,042

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



12



INSYNERGY PRODUCTS, INC.

STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

 

Common Stock

 

Additional

    

 

Shares

 

Amount

 

Paid in

Capital

 

Accumulated Deficit

 


Total

Balance, December 31, 2014

24,574,813

$

24,576

$

6,460,254

$

(6,417,382)

$

67,448

Stock issued for services

66,500

 

67

 

21,015

 

-

 

21,082

Stock issued for conversion of debt

1,655,555

 

1,655

 

523,156

 

-

 

524,811

Issuance of warrants

-

 

-

 

6,501,715

 

-

 

6,501,715

Net Loss for the year ended December 31, 2015

-

 

-

 

-

 

(8,238,575)

 

(7,651,985)

Balance, December 31, 2015

26,296,868

 

26,298

 

13,506,140

 

(14,655,957)

 

(1,123,519)

Forgiveness of accrued officer compensation

-

 

-

 

388,180

 

-

 

388,180

Forgiveness of related party loan and accounts payable

-

 

-

 

359,453

 

-

 

359,453

Stock issued for conversion of debt

1,308,696

 

1,309

 

299,691

 

-

 

301,000

Net Loss for the year ended December 31, 2016

-

 

-

 

-

 

(714,031)

 

(714,031)

Balance, December 31, 2016

27,605,564

$

27,607

$

14,553,464

$

(15,369,988)

$

(788,917)

 

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


13



INSYNERGY PRODUCTS, INC.

STATEMENTS OF CASH FLOWS

 

 

For the Years Ended December 31,

 

 

2016

  

2015

CASH FLOW FROM OPERATING ACTIVITES:

     

Net Loss for the Year

$

(714,031)

 

$

(8,238,575)

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

  

 

  

    Stock based compensation

 

-

 

 

21,082

    Depreciation

 

14,839

 

 

38,431

   Consulting paid with options

 

-

  

119,707

License fees paid with warrants

 

-

  

6,501,715

   Gain on extinguishment of debt

 

(20,435)

  

(63,859)

 Loss on inventory

 

499,861

  

-

    Loss on conversion of debt

 

-

  

226,811

Loss on disposal of fixed assets

 

20,461

  

17,034

   Amortization of debt discount

 

-

  

50,029

   Change in fair value of derivative liability

 

-

  

3,042

Changes in Operating Assets and Liabilities:

  

 

  

    Accounts receivable

 

158,482

  

(151,466)

    Prepaids & other assets

 

84,132

 

 

11,521

    Inventory

 

4,085

  

(359,053)

    Accounts payable

 

194,703

 

 

387,405

   Product returns & allowances

 

(609,770)

  

609,770

    Accrued expenses

 

318,604

 

 

206,314

Net Cash Used in Operating Activities

 

(49,069)

 

 

(620,092)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

-

 

 

-

CASH FLOWS FROM FINANCING ACTIVITIES:

  

 

  

    Officer advances

 

115,429

 

 

20,953

    Repayment of officer advance

 

(56,574)

 

 

(21,800)

    Proceeds from notes payable

 

36,843

 

 

776,199

    Payments on notes payable

 

(87,114)

  

(114,971)

Net Cash Provided by Financing Activities

 

8,584

 

 

660,381

Net Increase / (Decrease) in Cash

 

(40,485)

 

 

40,289

Cash at Beginning of Year

 

40,485

 

 

196

Cash at End of Year

$

-

 

$

40,485

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

Cash paid during the year for:

  

 

 

 

 Interest

$

-

 

$

-

 Franchise and income taxes

$

-

 

$

-

Supplemental disclosure of non-cash activities:

     

  Forgiveness of accrued salary

$

388,180

 

$

-

Forgiveness of related party debt and accounts payable

$

359,453

 

$

-

  Stock granted for conversion of debt

$

301,000

 

$

298,000

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


14



INSYNERGY PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2016

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Insynergy Products, Inc. (the "Company") was incorporated in the State of Nevada on January 26, 2010, to engage in Direct Response marketing of consumer products with the goal of producing sales through television and/or retail.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).The 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Use of estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates include the estimated useful lives of property and equipment.  Actual results could differ from those estimates.

 

Concentrations of Credit Risk

 

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits.  We continually monitor our banking relationships and consequently have not experienced any losses in our accounts.  We believe we are not exposed to any significant credit risk on cash.


Cash equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the year ended December 31, 2016 or 2015.

 

Accounts Receivable

 

Revenues that have been recognized but not yet received are recorded as accounts receivable. Losses on receivables will be recognized when it is more likely than not that a receivable will not be collected. An allowance for estimated uncollectible amounts will be recognized to reduce the amount of receivables to its net realizable value. The allowance for uncollectible amounts is evaluated quarterly.


15


Fair value of financial instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.  To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments.  The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2016.

 

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis as of December 31, 2016 and 2015.

 

Fixed Assets

 

Fixed assets are carried at the lower of cost or net realizable value. All fixed assets with a cost of $2,000 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations.

 

Depreciation is computed using the straight-line method over the estimated useful lives of three years.

 

Revenue recognition

 

The Company follows paragraph 605-15-25 of the FASB Accounting Standards Codification for revenue recognition when the right of return exists.  The Company will recognize revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) The seller's price to the buyer is substantially fixed or determinable at the date of sale, (ii) The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product. If the buyer does not pay at time of sale and the buyer's obligation to pay is contractually or implicitly excused until the buyer resells the product, then this condition is not met., (iii) The buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product, (iv) The buyer acquiring the product for resale has economic substance apart from that provided by the seller. This condition relates primarily to buyers that exist on paper, that is, buyers that have little or no physical facilities or employees. It prevents entities from recognizing sales revenue on transactions with parties that the sellers have established primarily for the purpose of recognizing such sales revenue, (v) The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (vi) The amount of future returns can be reasonably estimated.

 

The Company records an allowance for sales returns. The allowance is based on multiple criteria, including type of store, history of returns, length of time since product was sold to the customer and inventory remaining with customer (if known). The allowance will be evaluated and adjusted accordingly on a quarterly basis.

 


16


Income taxes

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

 

Stock-based Compensation

 

We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

 

Net income (loss) per common share

 

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.  The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

 

The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2016 and 2015, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

 


17


Advertising Costs

 

The Company expenses the cost of advertising and promotional materials when incurred. For the years ended December 31, 2016 and 2015 advertising costs were $36,820 and $584,061, respectively.

 

Reclassifications

 

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the year ended December 31, 2016.

 

Recently issued accounting pronouncements

 

In May 2014, August 2015, April 2016 and May 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09 (ASC Topic 606), Revenue from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016- from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016-10 (ASC Topic 10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. This standard may be applied process of assessing the impact, if any, on its consolidated financial statements.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this standard will have on our financial statements.

 

In June 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force.” The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The ASU is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including interim periods within those fiscal years. An entity that elects early adoption must adopt all of the amendments in the same period. The guidance requires application using a retrospective transition method. The Company is currently evaluating the effects, if any, that the adoption of this guidance will have on the Company’s consolidated cash flows.

 

The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 


18


NOTE 3 – GOING CONCERN

 

As reflected in the accompanying financial statements, the Company has an accumulated deficit of $15,369,988 at December 31, 2016, had a net loss of $714,031 and net cash used in operating activities of $49,069 for year ended December 31, 2016. This raises substantial doubt about the Company’s ability to continue as a going concern.

 

The Company currently has no revenue from current operations, with liabilities exceeding its assets. Management is analyzing new potential growth paths and the potential for a restructuring; however, there is still substantial doubt about the Company’s ability to continue as a going concern. The Company is currently performing its due diligence for a corporate reorganization. This due diligence phase, involving counsel and other qualified professionals is necessary in order to cautiously explore appropriate steps to restructure the Company for the purposes of executing a new business model within the Company’s core competencies.  

 

NOTE 4 – INVENTORY

 

As of December 31, 2016, the Company has no inventory. As of December 31, 2015, there was $131,759 of finished goods and $372,187 of work in process inventory. Inventory is carried at the lower of cost or net realizable value. Management has recognized that all the existing inventory no longer has any commercial value and has therefore written all remaining inventory down to zero resulting in a loss on inventory impairment of $373,512. The Company recognized an additional loss on inventory of $126,349 when a vendor failed to return product. In total $499,861 has been recorded to cost of goods sold.

 

NOTE 5 – PRODUCT RETURNS AND ALLOWANCES

The Company recorded an allowance for estimated customer returns of $0 and $609,770 for the years ended December 31, 2016 and 2015, respectively. The allowance was based on multiple criteria, including type of store, history of returns, length of time since product was sold to the customer and inventory remaining with customer (if known). Use of these criteria resulted in different percentages being applied to different customers. The allowance will be evaluated and adjusted accordingly on a quarterly basis.

December 31, 2016

 

Amount to apply reserve against

 

Reserve %

 

Reserve

 

Recognized in 2016

 

Reserve 12/31/2016

Pending return

$

N/A

 

N/A

$

140,962

$

(140,962)

$

-

Customer type 1

 

395,353

 

20%

 

79,071

 

(79,071)

 

-

Customer type 2

 

163,434

 

20%

 

32,687

 

(32,687)

 

-

Customer type 3

 

343,620

 

35%

 

120,267

 

(120,267)

 

-

Customer type 4

 

150,262

 

10%

 

15,026

 

(15,026)

 

-

 

$

1,052,669

  

$

388,013

$

(388,013)

$

-

 

 


19


NOTE 6 – PROPERTY AND EQUIPMENT

 

Furniture fixtures and equipment, stated at cost, less accumulated depreciation at December 31 consisted of the following:                

 

 

December 31, 2016

 

 

December 31, 2015

Equipment

 $

35,202

 

$

35,202

Furniture

 

18,766

  

37,276

Computers & Hardware

 

5,187

  

5,187

Leasehold improvements

 

-

  

-

Moldings

 

-

  

59,955

Less: accumulated depreciation

 

(59,165)

 

 

(102,320)

 Fixed assets, net

$

-

 

$

35,300


During the year ended December 31, 2015, the Company ceased using the office space for which it had capitalized prior leasehold improvement expense of $12,230. Accordingly, the Company has determined that carrying amount of such asset is not recoverable and has written it down to $0, resulting in a loss on disposal of $7,148.

 

During the year ended December 31, 2015, the Company determined that it would no longer be using tooling that had been capitalized at $26,500. Accordingly, the Company has determined that carrying amount of such asset is not recoverable and has written it down to $0, resulting in a loss on disposal of $9,886.

 

During the year ended December 31, 2016, the Company determined that it would no longer be using tooling that had been capitalized at $59,995. Accordingly, the Company has determined that carrying amount of such asset is not recoverable and has written it down to $0, resulting in a loss on disposal of $20,461.

 

Depreciation expense

 

Depreciation expense for the years ended December 31, 2016 and 2015 was $14,839 and $38,431, respectively.

 

NOTE 7 – NOTES PAYABLE

 

During the year ended December 31, 2015, the Company received short term loans from three creditors for a total of $354,000. The loans were uncollateralized, non-interest bearing and are due on demand. During the year ended December 31, 2016, the Company added $36,843 to the balance due and repaid $87,114. On December 31, 2016, two of the creditors converted their loans totaling $299,000 of principal and $2,000 of interest into 1,308,696 shares of common stock. The shares were issued at $0.23, no gain or loss was recognized on the conversion. As of December 31, 2016, $21,400 remains outstanding.



20


NOTE 8 – COMMITMENTS & CONTIGENCIES

 

Operating Lease

 

The Company currently occupies office space in Burbank, California. The Company signed a three-year lease starting January 1, 2016. Current monthly lease payments are $3,527 with yearly increases.  The lease required a deposit of $3,500 which was paid on December 10, 2015. Minimum lease payments over the next three years are as follows: 

 

Year

 

Amount

2016

$

41,097

2017

 

42,330

2018

 

43,596

Total

$

127,023

 

Investment Agreement

 

On July 9, 2014, the Board of Directors approved an investment arrangement with an individual. Per the terms of the agreement the investor has transferred $150,000 to the Company for which he is now entitled to the following: $1 per unit sold through all retail outlets including online and retail shopping shows until the investment is paid back in full. Once the original investment is recouped the investor shall then receive a 2% royalty in perpetuity on all future retail sales of the fitness product. The investment remains with the Company and is disclosed as an accrued liability on the balance sheet. This agreement is currently being renegotiated.

 

NOTE 9 – RELATED PARTY TRANSACTIONS

 

On May 15, 2015, the Company issued 25,000 shares of common stock to Rachel Boulds, CFO for services rendered. The shares were valued at $0.317 per share for a total non-cash expense of $7,925. Fair market value for the shares was determined by taking the average share price for each cash-for-stock purchase in the prior period.

 

On August 13, 2015, the Company, granted 15,000,000 warrants to purchase shares of common stock to Sanford Lang, CEO. The warrants will vest at 5,000,000 for each $5 million in revenue realized by the Company over the eighteen months from the date of issuance. The warrants have an exercise price of $0.23 and a term of ten years. The performance condition must be met for the award to vest; therefore, compensation costs will be recognized when those performance measures are met.

 

On August 13, 2015, the Company, granted 1,000,000 warrants to purchase shares of common stock to Martin Goldrod, COO. The warrants will vest at 333,000 for each $5 million in revenue realized by the Company over the eighteen months from the date of issuance. The warrants have an exercise price of $0.23 and a term of ten years. The performance condition must be met for the award to vest; therefore, compensation costs will be recognized when those performance measures are met.

 

Pursuant to a binding Letter of Intent with Ross Sklar (“Sklar”), a related party, dated August 13, 2015, the Company granted warrants to purchase 35,000,000 shares of common stock to Sklar on September 15, 2015 for consideration of entering into the license agreement.  The warrants have an exercise price of $0.23 and a term of ten years.

 

During 2015 an officer advanced the Company $5,000, $3,600 of which was repaid. The advance was used to pay for general operating expenses. The advance is uncollateralized, non-interest bearing and due on demand.

 

During the year ended December 31, 2016, Sanford Lang, CEO advanced the company $60,715 to pay for general operating expenses. The advances are uncollateralized, non-interest bearing and due on demand. As of December 31, 2016 the $60,715 was forgiven and credited to additional paid in capital.

 

On December 31, 2016, Chase Products Co. forgave $298,738 of accounts payable due to them. The amounts were credited to additional paid in capital. Ross Sklar, a member of the Company’s Board of Directors is also a Board member of Chase Products Co.

 

On December 31, 2016, Sanford Lang, CEO and Martin Goldrod, COO each forgave $287,095 and $101,085, respectively of accrued salary. The amounts were credited to additional paid in capital.

 


21


NOTE 10 – STOCK OPTIONS

 

For the years ended December 31, 2016 and 2015, $16,324 and $119,707 has been amortized to expense, respectively.

 

A summary of the status of the Company’s outstanding stock options and changes during the periods is presented below:


 

Shares available to purchase with options

 

 

Weighted

Average

Price

 

 

Weighted

Average

Fair Value

 

 

 

 

 

 

 

 

Outstanding, December 31, 2015

 

1,000,000

 

 

$

0.27

 

 

$

0.20

 

 

 

 

 

$

 

 

 

 

 

Issued

 

-

 

 

$

-

 

 

$

-

Exercised

 

-

 

 

$

-

 

 

$

-

Forfeited

 

-

 

 

$

-

 

 

$

-

Expired

 

1,000,000

 

 

$

0.27

 

 

$

0.20

Outstanding, December 31, 2016

 

-

 

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

Exercisable, December 31, 2016

 

-

 

 

$

-

 

 

$

-

 

NOTE 11 – STOCK WARRANTS

 

Pursuant to a binding Letter of Intent with Ross Sklar (“Sklar”), a related party, dated August 13, 2015, the Company granted warrants to purchase 35,000,000 shares of common stock to Sklar on September 15, 2015.  The warrants have an exercise price of $0.23 and a term of ten years.  The aggregate fair value of the warrants totaled $6,501,715 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.23, 2.28% risk free rate, 65.24% volatility and expected life of the options of 10 years. Mr. Sklar was also appointed to the Board of Directors designating him a related party.

A summary of the status of the Company’s outstanding stock warrants and changes during the periods is presented below:


 

Shares available to purchase with warrants

 

 

Weighted

Average

Price

 

 

Weighted

Average

Fair Value

 

 

 

 

 

 

 

 

Outstanding, December 31, 2015

 

51,000,000

 

 

$

0.23

 

 

$

0.186

 

 

 

 

 

 

 

 

 

 

 

Issued

 

-

 

 

$

-

 

 

$

-

Exercised

 

-

 

 

$

-

 

 

$

-

Forfeited

 

-

 

 

$

-

 

 

$

-

Expired

 

-

 

 

$

-

 

 

$

-

Outstanding, December 31, 2016

 

51,000,000

 

 

$

0.23

 

 

$

0.186

 

 

 

 

 

 

 

 

 

 

 

Exercisable, December 31, 2016

 

35,000,000

 

 

$

0.23

 

 

$

0.186

 

Range of Exercise Prices

Number Outstanding 12/31/2016

Weighted Average Remaining Contractual Life

 

Weighted Average Exercise Price

$0.23

51,000,000

8.62 years

$

0.23


22


NOTE 12 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

During the year ended December 31, 2015, the Company issued 41,500 shares of common stock for services to service providers. The shares were valued at $0.317 per share for a total non-cash expense of $13,156. Fair market value for the shares was determined by taking the average share price for each cash-for-stock purchase in the prior period.

 

During the year ended December 31, 2015, the Company converted loans due to a creditor totaling $298,000 into 1,655,555 shares of common stock. The shares were valued at $0.317 which was determined using the average of the most recent stock sales for cash.

 

On December 31, 2016, two of the Company’s creditors converted their loans totaling $299,000 of principal and $2,000 of interest into 1,308,696 shares of common stock. The shares were issued at $0.23. No gain or loss was recognized on the conversion. There has been no recent trading of stock for which there is a fair value; current outstanding warrants are exercisable at $0.23.

 

Refer to Note 9 for related party equity transactions.

 

NOTE 13 – INCOME TAX

 

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 bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Net deferred tax assets consist of the following components as of December 31:

 

 

2016

 

2015

Deferred Tax Assets:

 

 

 

 

NOL Carryover

1,691,400

1,137,400

Related party accrual

 

500

 

1,300

Product returns & allowance

 

-

 

230,100

      Payroll accrual

 

34,300

 

88,400

Deferred tax liabilities:

    

      Depreciation

 

(13,200)

 

3,600

Less valuation allowance

 

(1,713,000)

 

(1,460,800)

Net deferred tax assets

 $

-

 $

-

 

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended December 31, due to the following:

 

 

 

2016

 

2015

Book loss

 $

(305,900)

 $

(3,529,400)

Meals and entertainment

 

2,600

 

4,600

Depreciation

 

1,200

 

11,300

Product returns & allowance

 

(252,800)

 

252,800

Other nondeductible expenses

 

7,000

 

2,921,400

Related party accruals

 

(900)

 

(400)

Accrued payroll

 

58,900

 

58,900

Valuation allowance

 

489,900

 

280,800

 

 $

-

 $

-

 


23


At December 31, 2016, the Company had net operating loss carry forwards of approximately $4,337,000 that may be offset against future taxable income from the year 2016 to 2036. No tax benefit has been reported in the December 31, 2016 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2012.

 

NOTE 14 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statement were issued, and has determined that no material subsequent events exist.

 

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None

 

Item 9A.  CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including the Chief Executive Officer who also acts as our principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.  The disclosure controls and procedures ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer as appropriate to allow timely decisions regarding required disclosure.  Based on that evaluation, the Chief Executive Officer concluded that, as of December 31, 2016, these disclosure controls and procedures were not effective.

   

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible to establish and maintain adequate internal control over financial reporting.   Our Chief Executive Officer is responsible to design or supervise a process that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  The policies and procedures include:

 

maintenance of records in reasonable detail to accurately and fairly reflect the transactions and dispositions of  assets,

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with  generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

 


24


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of the end of the period December 31, 2016.  In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the fiscal year December 31, 2016, our internal control over financial reporting were not effective at that reasonable assurance level. The following aspects of the Company were noted as potential material weaknesses:

 

·

timely and accurate reconciliation of accounts

·

lack of segregation of duties

·

complex accounting transaction expertise

·

lack of corporate documentation

 

Changes in Internal Controls over Financial Reporting

 

Our management has determined that there were no changes made in the implementation of our internal controls over financial reporting during the fourth quarter of the year ended December 31, 2016.  

 

Attestation Report of Independent Public Accounting Firm

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting because as a smaller reporting company we are not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

 

Item 9B.  OTHER INFORMATION

 

None.


25


PART III


Item 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

 

The following table sets forth the names and ages of our current directors and executive officers. Also, the principal offices and positions with us held by each person and the date such person became our director, executive officer. Our bylaws require at least four directors to serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors.  Our executive officers are appointed by our board of directors and serve at its discretion. There are no family relationships among our directors, executive officers, director nominees.

 

Name

Age

Position

Sanford Lang

71

Chief Executive Officer, Director & Chairman

Martin Goldrod

75

Director, President, & COO

Rachel Boulds

47

Chief Financial Officer

Ross Sklar

41

Director


Sanford Lang is a co-founder of Insynergy and has served as its Chief Executive Officer and as Chairman of its Board of Directors from January 2010 when the Company was incorporated, to the present.  From January 2007 to October 2009, Mr. Lang was President of Xstatic Corporation, a company involved in the development, marketing and sale of retail products designed to improve strength, balance and flexibility.  Mr. Lang was responsible for planning and implementation of all marketing for products, including the scripting and shooting of video campaigns for the Products. Mr. Lang was previously for approximately 30 years an executive in the movie industry.

 

Martin Goldrod is a co-founder of Insynergy, and has served as its President and Chief Operating Officer, as well as on the Board of Directors, from January 2010 when the Company was incorporated, to the present. From January 2010 until March 2015 he served as the Company’s Chief Financial Officer. From January 2007 to October 2009, Mr. Goldrod was Vice President of Xstatic Corporation, a company involved in the development, marketing and sale of retail products designed to improve strength, balance and flexibility.  Mr. Goldrod was responsible for accounting and budgeting for Xstatic Corporation.  Mr. Goldrod has an Associate of Arts degree from City College of San Francisco along with a certificate in Financial Planning from UCLA Extension.  For approximately 30 years Mr. Goldrod was an executive in the music industry.

 

Rachel Boulds was appointed as Chief Financial Officer of the Company on March 6, 2015.  She has been a Certified Public Accountant since September 2005.  Since July 2009 to the present she has been the independent owner-operator of a Utah Professional Limited Liability Company that provides accounting services to companies.  Her firm provides contract Chief Financial Officer, controllership, financial reporting, audit consulting, bookkeeping, and business operation consulting services to various public and private companies.  Typical services include preparation of period-end financial statements, footnotes and Management Discussion and Analysis in conformity with US GAAP and SEC reporting rules, as well as consultation on complex accounting matters and working closely with client staff, auditors and legal counsel to prepare, review and file periodic public financial information, including Forms 10-K and 10-Q.

 

Ross Sklar was appointed to fill a vacancy on our Board on August 13, 2015.  Mr. Sklar is 40 years old and is the founder and current Chief Executive Officer of The Starco Group, located in Los Angeles, California.  He started The Starco Group in January 2010. The Starco Group is a coating and adhesive aerosol producer and one of only two companies in the U.S. that produces aerosols and janitor and food service chemicals all under one roof.  For over 15 years Mr. Sklar has developed technology in the chemical, coatings, oil and gas, construction and consumer markets.  He holds a Bachelor’s degree in Political Science with a minor in Economics from the University of Manitoba.

 


26


Involvement in Certain Legal Proceedings


None of our officer nor directors, promoters or control persons have been involved in the past ten years in any of the following:

 

(1)

Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

(2)

Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(3)

Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

 

(4)

Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

 

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than ten percent of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock.  Officers, directors and ten-percent or greater beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.  Based upon a review of those forms and representations regarding the need for filing for the year ended December 31, 2015, we believe all necessary forms have been filed.  

 

Corporate Governance

 

We do not have a standing nominating committee for directors, nor do we have an audit committee with an audit committee financial expert serving on that committee.  Our entire board of directors, including Messrs. Sanford, Goldrod and Sklar, act as our nominating and audit committee.

 

Code of Ethics

 

The Company has not adopted a Code of Ethics.

 


27


Item 11.  EXECUTIVE COMPENSATION

 

The following table provides information as to cash compensation of all executive officers of the Company, for each of the Company’s last two fiscal years.

 

SUMMARY COMPENSATION TABLE

 

Name and

principal position

Year

Salary

($)(1)

Bonus

($)

Stock Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings ($)

All Other

Compensation

($)

Total

($)


Sanford Lang,

CEO

2016

2015

$0

$42,905

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$42,905


Martin Goldrod, COO

2016

2015

$7,275

$19,140

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$7,275

$19,140

Rachel Boulds, CFO

2016

2015

$6,750

$8,500

$0

$0

$7,925

$7,925

$0

$0

$0

$0

$0

$0

$0

$0

$6,750

$16,425

 

(1)Amounts indicated are cash payments. Officers may have accrued unpaid salary.

Employment Agreements

 

We have separate employment agreements with our three principle officers as follows:

 

On February 5, 2010, the Company entered into a five-year employment contract with Sanford Lang, providing for his services as Chief Executive Officer of the Company.  The employment Agreement provides for a salary of $120,000 per year, and for additional bonus compensation each year at the discretion of the Board of Directors.  It also provides for a car allowance of $900 per month, reimbursement for all business expenses, and for participation in all employee benefit programs offered to other employees from time to time to other employees of the Company. Effective July 1, 2015, the Board approved an increase of the yearly salary to $180,000.

 


28


On February 5, 2010, the Company entered into a five-year employment contract with Martin Goldrod, providing for his services as President and Chief Operating Officer of the Company.  The employment Agreement provides for a salary of $60,000 per year, and for additional bonus compensation each year at the discretion of the Board of Directors.  It also provides for reimbursement for all business expenses, and for participation in all employee benefit programs offered to other employees from time to time to other employees of the Company. Effective July 1, 2015, the Board approved an increase of the yearly salary to $65,000.

 

The Company appointed Rachel Boulds as its CFO on March 6, 2015. The Company and Ms. Boulds have not entered into any formal written compensation agreement for the position of Chief Financial Officer of the Company.  

 

DIRECTOR COMPENSATION

 

The following table provides information concerning the compensation of the current and former directors of the Company for the past fiscal year:

 

Name

Fees Earned or Paid in Cash

Stock Awards

All Other Compensation

Total

Sanford Lang

$0

$0

$0

$0

Martin Goldrod

$0

$0

$0

$0

Ross Sklar

$0

$0

$0

$0


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

Securities Under Equity Compensation Plans

 

The following table lists the securities authorized for issuance under any equity compensation plans approved by our shareholders and any equity compensation plans not approved by our shareholders as of December 31, 2016.  This chart includes individual compensation arrangements as described below.


EQUITY COMPENSATION PLAN INFORMATION

 

 

 

 

 

Plan category

 

 

Number of securities to be issued upon exercise of outstanding options, warrants and rights

(a)

 

 

Weighted-average exercise price of outstanding options,

warrants and rights

(b)

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

(c)

Equity compensation plans approved by security holders            

0

$ 0.00

0

Equity compensation plans not approved by security holders            

51,000,000

$ 0.23

0

Total

51,000,000

$ 0.23

0


29


Equity Awards to Officers and Directors

 

On August 13, 2015, the Company granted 15,000,000 warrants to purchase shares of common stock to Sanford Lang, CEO.

The warrants will vest at 5,000,000 for each $5 million in revenue realized by the Company over the eighteen months from the date of issuance. The warrants have an exercise price of $0.23 and a term of ten years.

 

On August 13, 2015, the Company granted 1,000,000 warrants to purchase shares of common stock to Martin Goldrod, COO. The warrants will vest at 333,000 for each $5 million in revenue realized by the Company over the eighteen months from the date of issuance. The warrants have an exercise price of $0.23 and a term of ten years.

 

On September 15, 2015, the Company granted warrants to purchase 35,000,000 shares of common stock to Ross Sklar in consideration for licensing rights to a series of products. The warrants have an exercise price of $0.23 and a term of ten years.  

 

Beneficial Ownership

 

The following table lists the beneficial ownership of our outstanding common stock by our management and each person or group known to us to own beneficially more than 5% of our voting common stock.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Based on these rules, two or more persons may be deemed to be the beneficial owners of the same securities.  Except as indicated by footnote, the persons named in the table below have sole voting power and investment power with respect to the shares of common stock shown as beneficially owned by them. The percentage of beneficial ownership is based on 27,605,564 shares of common stock outstanding as of March 27, 2017, plus an aggregate of 35,000,000 shares which the following persons may acquire within 60 days by the exercise of rights, warrants and/or options.


MANAGEMENT


Title of Class

Name of

 Beneficial Owner

Amount of Beneficial Ownership


Percent of Class

Common Stock

Sanford Lang


8,050,320 (1)

12.9%


Common Stock


Martin Goldrod


1,362,500


2.2%

Common Stock

Rachel Boulds

25,000

0.0%

Common Stock

Ross Sklar

35,000,000 (2)

55.9%

 

Directors and executive officers as a group

(4 persons)

44,437,820

71.0%

(1)Represents 7,540,320 shares by Mr. Lang, 500,000 shares held by his spouse and 10,000 shares held by a child living with him.


(2)Represents warrants to purchase 35,000,000 common shares exercisable within the next 60 days.


30


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Related Party Transactions

 

The following information summarizes transactions we have either engaged in for the past two fiscal years or propose to engage in, involving our executive officers, directors, more than 5% stockholders, or immediate family members of these persons.  These transactions were negotiated between related parties without “arm’s length” bargaining and, as a result, the terms of these transactions may be different than transactions negotiated between unrelated persons.

 

On May 15, 2015, the Company issued 25,000 shares of common stock to Rachel Boulds, CFO for services rendered. The shares were valued at $0.317 per share for a total non-cash expense of $7,925. Fair market value for the shares was determined by taking the average share price for each cash-for-stock purchase in the prior period.

 

On August 13, 2015, the Company, granted 15,000,000 warrants to purchase shares of common stock to Sanford Lang, CEO. The warrants will vest at 5,000,000 for each $5 million in revenue realized by the Company over the next eighteen months. The warrants have an exercise price of $0.23 and a term of ten years. The performance condition must be met for the award to vest; therefore, compensation costs will be recognized when those performance measures are met.

 

On August 13, 2015, the Company, granted 1,000,000 warrants to purchase shares of common stock to Martin Goldrod, COO. The warrants will vest at 333,000 for each $5 million in revenue realized by the Company over the next eighteen months. The warrants have an exercise price of $0.23 and a term of ten years. The performance condition must be met for the award to vest; therefore, compensation costs will be recognized when those performance measures are met.

 

During 2015 Martin Goldrod, COO advanced the Company $5,000, $3,600 of which was repaid. The advance was used to pay for general operating expenses. The advance is uncollateralized, non-interest bearing and due on demand.

 

Pursuant to a binding Letter of Intent with Ross Sklar (“Sklar”), dated August 13, 2015, the Company granted warrants to purchase 35,000,000 shares of common stock Sklar on September 15, 2015.  The warrants were granted in consideration for licensing rights to a series of products owned by The Starco Group. The warrants have an exercise price of $0.23 and a term of ten years.  Pursuant to the Letter of Intent, the Company appointed Mr. Sklar as a member of its Board of Directors on August 13, 2015.

 

On February 5, 2010, the Company entered into a five-year employment contract with Sanford Lang, providing for his services as Chief Executive Officer of the Company.  The employment Agreement provides for a salary of $120,000 per year. Effective July 1, 2015, the Board approved an increase of the yearly salary to $180,000.

 

On February 5, 2010, the Company entered into a five-year employment contract with Martin Goldrod, providing for his services as President and Chief Operating Officer of the Company.  The employment Agreement provides for a salary of $60,000 per year. Effective July 1, 2015, the Board approved an increase of the yearly salary to $65,000.

 

During the year ended December 31, 2016, Sanford Lang, CEO advanced the company $60,715 to pay for general operating expenses. The advances are uncollateralized, non-interest bearing and due on demand. As of December 31, 2016, the $60, 715 was forgiven and credited to additional paid in capital.

 

On December 31, 2016, Sanford Lang, CEO and Martin Goldrod, COO each forgave $287,095 and $101,086, respectively of accrued salary. The amounts were credited to additional paid in capital.


31


Director Independence

 

At this time the Company does not have a policy that its directors or a majority be independent of management.  The Company has at this time only three directors. It is the intention of the Company to implement a policy in the future that a majority of the Board member be independent of the Company’s management as the members of the board of director’s increases after implementation of the Company’s business plan.

 

Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Audit Fees

 

The following table presents the aggregate fees billed for each of the last two fiscal years by our Independent Registered Public Accounting Firm in connection with the audit of our financial statements and other professional services rendered by those accounting firms.  

  

  

2016

  

2015

Audit fees

$

60,500

 

$

 52,000

Audit-related fees

$

-

 

$

-

Tax fees

$

2,400

 

$

2,400

All other fees

$

-

 

$

-  

 

Audit fees represent fees for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

 

Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of our financial statements that are not reported under audit fees.  


Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning.  

 

All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for the other three categories.

 

Pre-Approval Policies


Our audit committee makes recommendations to our board of directors regarding the engagement of an auditor. Our board of directors approves the engagement of the auditor before the firm renders audit and non-audit services.  Our audit committee does not rely on pre-approval policies and procedures.


32


PART IV


ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a)(1)   Financial Statements

 

The audited financial statements of Insynergy Products, Inc., are included in this report under Item 8 on pages 16 to 30.

 

(a)(2)   Financial Statement Schedules

 

All financial statement schedules are included in the footnotes to the financial statements or are inapplicable or not required.

 

(a)(3)  Exhibits

 

The following documents have been filed as part of this report.


Exhibit

No.


Description

3(i)

Articles of Incorporation (incorporated by reference to exhibit 3.0  Form S-1 file No. 333-179262, filed January 31, 2012)

3(ii)

By-laws of Insynergy Products, Inc., as amended August 13, 2015 (incorporated by reference to exhibit 3(ii)  Form 8-K filed August 20, 2015

31.1

Chief Executive Officer Certification

31.2

Chief Financial Officer Certification

32.1

Section 1350 Certification

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Label Linkbase Document

101.PRE

XBRL Taxonomy Presentation Linkbase Document

  

33


SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Insynergy Products, Inc.

  

By:

 

/s/ Sanford Lang

  

Sanford Lang

  

Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K 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/ Sanford Lang

Sanford Lang

 

Chief Executive Officer, Chairman of the
Board and Director

 

 

March 31, 2017

   

/s/ Martin Goldrod

Martin Goldrod

 

 

President, COO and Director

 

 

March 31, 2017

 

/s/ Rachel Boulds

Rachel Boulds

 

 

 

Chief Financial Officer

 

March 31, 2017

     

/s/ Ross Sklar

Ross Sklar

 

 

Director

 

 

March 31, 2017


 


34