LANDSTAR, INC. UNAUDITED INTERIM FINANCIAL STATEMENTS

Transcription

1 UNAUDITED INTERIM FINANCIAL STATEMENTS MARCH 31, 2018

2 BALANCE SHEETS (UNAUDITED) December 31, March 31, (Restated) ASSETS Current Assets: Cash $ 20,019 $ - Prepaid expenses 11,500 - Total Current Assets 31,519 - Other Assets Intellectual property 1,500,000 - TOTAL ASSETS $ 1,531,519 $ - LIABILITIES & STOCKHOLDERS' Equity (Deficit) Current Liabilities: Accounts payable $ 155,994 $ 81,458 Accrued interest payable 1,368 Due to related party 23,173 7,990 Convertible note payable 121, ,000 Total Current Liabilities 301, ,448 Long Term Liabilities Convertible notes payable 400,000 Total Liabilities $ 701,785 $ 214,448 Stockholders' Equity (Deficit) Series A preferred stock 50,000,000 shares authorized, par value $0.001 each 1,000,000 shares issued and outstanding at March 31, ,000,000 shares issued and outstanding at December 31, ,000 1,000 Common stock 8,888,000,000 shares authorized, par value $0.001 each 4,022,676,982 shares issued and outstanding at March 31, ,022,677 3,947,677 3,947,676,982 shares issued and outstanding at December 31, 2017 Common shares issuable (1,200,000,000) 1,200,000 - Additional Paid-In Capital 1,215,552 1,286,802 Accumulated deficit (5,609,495) (5,449,927) Total Stockholders' Equity (Deficit) $ 829,734 $ (214,448) TOTAL LIABILITES & STOCKHOLDERS' EQUITY (DEFICIT) $ 1,531,519 $ -

3 STATEMENT OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH 31, Revenue: Income $ - $ - Total Income - - Operating Expenses Marketing 7,123 - Management fees 103,750 - Consulting fees 39,069 - Professional fees 4,475 - General and Administrative 3,782 - Total Operating Expenses 158,200 - Operating Loss (158,200) - Other Items Loan interest 1,368 - Net Income (Loss) $ (159,568) $ - Per Share Information: Weighted average number of common shares outstanding - basic 4,021,732,538 3,947,676,982 Net Income (Loss) per common share - Basic $ (0.00) $ - Weighted average number of common shares outstanding - fully diluted 21,446,732,538 18,950,176,982 Net Income(Loss) per common share - fully diluted $ (0.00) $ -

4 STATEMENT OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED MARCH 31, Cash Flows from Operating Activities: Net income (loss) $ (159,568) $ - Adjustments to reconcile net income (loss) to net cash used in operating activities Accounts receivable - - Prepaid assets (11,500) - Accounts payable 74,536 Accrued interest payable 1,368 - Net Cash Used In Operating Activities (95,164) - Cash Flows From Investing Activities Purchase of intellectual property (50,000) - Net Cash Used In Investing Activities (50,000) - Cash Flows from Financing Activities: Increase (decrease) in Notes Payable 150,000 - Loan from a related party 15,183 - Net Cash Provided By Financing Activities 165,183 - Net Change in Cash 20,019 - Cash and Cash Equivalents - Beginning of Year - - Cash and Cash Equivalents - End of Year $ 20,019 $ - Supplementary Information Conversion of notes payable to common stock $ 3,750 $ - Issuance of common stock and notes for acquisition of intellectual property $ 1,450,000 $ -

5 DATA443 Risk Mitigation, Inc. (formerly Landstar, Inc.) STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) LANDSTAR, Inc. PREFERRED STOCK COMMON STOCK COMMON STOCK ISSUABLE Additional Accumulated Total STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) # of Shares Amount # of Shares Amount # of Shares Amount Capital Deficit Equity PREFERRED STOCK COMMON STOCK COMMON STOCK ISSUABLE Additional Accumulated # of Shares Amount # of Shares Amount # of Shares Amount Capital Deficit Equity Balances - January 1, ,000,000 $ 1,000 3,947,676,982 $ 3,947,677 - $ - $ 1,286,802 $ (5,360,479) $ (125,000) Total Prior Balances period - January adjustments 1, ,000,000 - $ 1,000-3,947,676,982 $ - 3,947, $ - $ 1,286,802 $ (5,360,479) - $ (89,448) (125,000) (89,448) Prior period adjustments (89,448) (89,448) As restated - January 1, ,000,000 1,000 3,947,676,982 3,947, ,286,802 (5,449,927) (214,448) As restated - January 1, ,000,000 1,000 3,947,676,982 3,947, ,286,802 (5,449,927) (214,448) Conversion of notes payable to common Conversion of notes payable to common stock ,000,000 75,000 (71,250) - 3,750 stock ,000,000 75,000 (71,250) - 3,750 Common stock issuable on on acquisition of intellectual property ,200,000,000 1,200, ,200,000 of intellectual property ,200,000,000 1,200, ,200,000 Net loss - March 31, (159,568) (159,568) - Net loss -- March 31, (159,568) (159,568) Balances - March 31, ,000,000 $ 1,000 4,022,676,982 $ 4,022,677 1,200,000,000 $ 1,200,000 $ 1,215,552 $ (5,609,495) $ 829,734 Balances - March 31, ,000,000 $ 1,000 4,022,676,982 $ 4,022,677 1,200,000,000 $ 1,200,000 $ 1,215,552 $ (5,609,495) $ 829,734

6 NOTE 1 - NATURE OF BUSINESS Organization The name of the issuer is Landstar, Inc. (the Company ). On December 18, 2017, the Company applied for and was approved for a Change of Name to Data443 Risk Mitigation, Inc. by filing Articles of Amendment with the North Carolina Department of State. The Company s name change is related to a merger transaction between the Company and Landstar, Inc., a Nevada corporation ( Landstar-NV ). The Company is preparing to file the corporate action for the merger transaction, change of domicile to North Carolina, and the corporate name change to Data443 Risk Mitigation, Inc. with FINRA in the near future and hopes to have the changes effected by May 31, On July 12, 2017, the Company s prior management filed Articles of Incorporation with the Secretary of State in North Carolina, forming a company called Landstar, Inc. Also on July 12, 2017, the Company s prior management filed Articles of Merger with the North Carolina Secretary of State, indicating that the Company merged with Landstar-NV, with the Company being the surviving entity (the Merger ). Under the terms of the Merger, it was the intent of the parties that the Company would assume Landstar-NV s status as a publicly-quoted company on the OTC Markets. During the period ending March 31, 2018, while preparing documents to file with FINRA to effect the corporate changes that occurred as a result of the Merger, current management of the Company became aware that the Merger may not have actually been fully consummated since Landstar-NV was not technically an active entity in good standing in the State of Nevada at the time of the Merger. In order to ensure the Merger was consummated correctly, the Company, Landstar-NV, and both companies management are in the process of ensuring the proper ratification of the merger transaction with the States of Nevada and North Carolina, and will then file an Issuer Notification Form with FINRA asking FINRA to recognize the merger transaction, with the corresponding change in domicile from Nevada to North Carolina, and the name change to Data443 Risk Mitigation, Inc. Operations The Company operates by a set of guiding principles, primarily set as: Identify product & solution whitespace existing in the market, identify acquisition target products/companies that fulfill product and customer profile requirements, and/or Build/Integrate the rollup candidate organizations into a larger operating umbrella focusing heavily on customer experience and adoption into existing investments made in the cyber security, cyber operations, data protection and management realms. Leverage existing and new skillsets in the organization to introduce unique product offerings that also encompass cyber response, data and identity governance, blockchain ledgers and other distributed big-data oriented capabilities.

7 On or about January 26, 2018, the Company purchased ClassiDocs from Myriad Software Productions, LLC, a company wholly owned by our CEO, CFO and controlling shareholder Jason Remillard. ClassiDocs is a data classification & governance platform that provides organizations with a GDPR compliance interface that facilitates queries required to complete explicit PII-based searches across data files (unstructured) and databases (structured) data sets for the whole enterprise. The Company is currently co-located at 1053 E. Whitaker Mill Rd. Suite #115, Raleigh, North Carolina, within Raleigh s leading high-tech co-working space, which better reflects the culture that the Company is working towards. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES GOING CONCERN The accompanying financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. We have made one product acquisition this year (ClassiDocs) and are actively seeking new products and companies to acquire, with several accretive candidates identified. The Company has developed, and continues to develop, large scale partnerships with world-leading cyber security, marketing and product organizations, to market and promote ClassiDocs and other products the Company may develop or acquire. The Company has not earned any revenue to date. As of March 31, 2018, the Company had operating losses, outstanding payables and an accumulated deficit of $5,609,495. These factors, among others, raise substantial doubt about the Company s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. general 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 consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, cash equivalents include demand deposits, money market funds, and all highly liquid debt instructions with original maturities of three months or less. FINANCIAL INSTRUMENTS The Company s balance sheet includes certain financial instruments, primarily, cash, prepaid expenses, accounts payable, and debt to related parties. The carrying amounts of current assets and current liabilities approximate their fair value due to the relatively short period of time between the origination of these instruments and their expected realization.

8 CONCENTRATIONS AND CREDIT RISKS The Company s financial instruments that are exposed to concentrations and credit risk primarily consist of its cash, sales and accounts receivable. Cash - The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited. PROPERTY, EQUIPMENT AND LONG-LIVED ASSETS Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the assets, five years, utilizing the straight method. Maintenance and repairs are expensed as incurred. Expenditures which significantly increase value or extend useful asset lives are capitalized. When property or equipment is sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation period or the undepreciated balance is warranted. Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. OTHER ASSETS On or about January 26, 2018, the Company acquired intellectually property referred to as ClassiDocs from Myriad Software Productions, LLC, a company wholly owned by our CEO, CFO and controlling shareholder Jason Remillard. The purchase price for our acquisition of ClassiDocs was $1,5000,000: $50,000 was paid in cash, $250,000 was issued in the form of a long term, non-interest bearing note, and $1,200,000 is to be issued in the form of 1,200,000,000 of our common shares. As of this filing, the shares have not yet been issued.

9 SHARE-BASED COMPENSATION ASC 718, Compensation Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. SHARE-BASED COMPENSATION The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC , Equity Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. INCOME TAXES The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Deferred tax assets or liabilities were off-set by a 100% valuation allowance, therefore there has been no recognized benefit as of March 31, COMMITMENTS AND CONTINGENCIES The Company follows ASC , Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

10 EARNINGS PER SHARE Net income (loss) per share is calculated in accordance with ASC 260, Earnings Per Share. The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at. Due to net operating loss, there is no presentation of dilutive earnings per share, as it would be anti-dilutive. FORGIVENESS OF INDEBTEDNESS The Company follows the guidance of AS related to debt forgiveness and extinguishment. Debts of the Company are considered extinguished when the statute of limitations in the applicable jurisdiction expire or when terminated by judicial authority such as the granting of a declaratory judgment. Debts to related parties or shareholders are treated as capital transactions when forgiven or extinguished and credited to additional paid in capital. Debts to non-related parties are treated as other income when forgiven or extinguished. RECENT ACCOUNTING PRONOUNCEMENTS From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. NOTE 3 - INCOME TAXES Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the more likely than not standard imposed by accounting standards to allow recognition of such an asset. At March 31, 2018, the Company expected no net deferred tax assets to be recognized, resulting from net operating loss carry forwards. Deferred tax assets were offset by a corresponding allowance of 100%.

11 NOTE 4 - COMMITMENTS AND CONTINGENCIES Risks and Uncertainties The Company s operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure. Commitments We have signed consulting contracts with thirteen consultants: four are providing senior leadership to the company in corporate development, technology development, finance, operations, marketing and sales, with the others providing services in marketing, sales and engineering. Additionally, we engage junior and mid-level engineering consultants on a project by project basis to further develop technology and to implement services for prospective clients. Collectively, the thirteen are to be paid approximately $180,000 cumulatively, quarterly. Additionally, we have reserved stock and stock options for some of these consultants as part of their compensation and/or in lieu of cash to reduce cash outlays. Stock and stock options reserves are awarded selectively to consultants upon their start dates, and once quarterly thereafter, for the term of their agreements, at a fixed dollar amount. Each stock and stock option reserve vests, and is issuable, upon the one-year anniversary from the date the reserve was awarded. For the period ended March 31, 2018, 97,662,906 common shares were reserved, to be issued in the first quarter of During the same period, options to purchase 126,872,175 common shares were reserved. Likewise, the options will not be issued until the first quarter of Exercise prices for the reserved options range from $ to $ One of our consulting contracts is with Myriad Software Productions, LLC ( Myriad ), a company wholly owned by our controlling shareholder Jason Remillard, for services rendered, with Jason Remillard serving as both an officer and director of the Company. Of the shares and options reserved for consultants during the period ending March 31, 2018, 32,142,857 common shares and 32,142,857 in stock options were reserved for Myriad. Of the approximately $150,000 payable to consultants in the period ending March 31, 2018, $30,000 of the Company s consultant expense was due to Myriad for services rendered by Jason Remillard during the period. Payables Due to Related Parties Payables due to Jason Remillard, our CEO, CFO and controlling shareholder, grew from $7,990 as of December 31, 2017 to $23,173 as of March 31, This payable is to reimburse Jason Remillard for company expenses paid by him on our behalf during the normal course of business. Legal and other matters In the normal course of business, the Company may become a party to litigation matters involving claims against the Company. The Company's management is unaware of any pending or threatened assertions and there are no current matters that would have a material effect on the Company s financial position or results of operations.

12 Legal and other matters Notwithstanding the above, an unauthorized Current Report on Form 8-K was filed on April 9, 2018, under the name Landstar, Inc. that purports to have financial statements for the years ended December 31, 2017 and 2016 and includes an inserted entry for long term debt with interest for $1,000,000 on the balance sheet. The notes to the financial statements also state: 'The Company has taken loan from Emry Capital before The North Carolina Company ignored the inclusion of debt of $500,000 which has now been restated in 2016 by increasing accumulated deficits and long term loans. This loan includes two notes amounting to $500,000 and one for $94,000. Together with interest it now amounts to $1,000,000 being interest rate of 12% per annum. Although we are aware of a claim for a $500,000 debt obligation, LANDSTAR is not familiar with the allegations that form the basis for this claim. We provide this in the interest of full disclosure that such a statement could form the basis for claim if such statement accurately represents obligations of the Company since the Company does not recognize any such obligations. As such, the Company has not recognized this purported debt in its current financial statements. NOTE 5 CONVERTIBLE NOTES PAYABLE The notes payable consist of: 1) Non-interest bearing note for the original principal of $125,000, payable due on demand and convertible at the option of the holder into common shares at the conversion price of $ per share. The outstanding principal for the convertible note was $121,250 as of March 31, 2018 and $125,000 as of March 31, ) Non-interest bearing note for $250,000, issued for the purchase of ClassiDocs from Myriad Software Productions, LLC, a company wholly owned by our CEO, CFO and controlling shareholder Jason Remillard, payable in two payments, due April 30, 2019 and April 30, 2020, each for $125,000. The outstanding principal for the note was $250,000 as of March 31, 2018 and $0 as of March 31, ) Two 8% interest accruing, convertible notes, totaling $150,000, due in the period ending September 30, Each note is convertible at the option of the holder into common shares at a 25% discount to the lowest trading price during the ten consecutive trading days immediately preceding the date of conversion. The outstanding principal for these notes was $150,000 as of March 31, 2018 and $0 as of March 31, 2017.

13 NOTE 6 - EQUITY The Company is authorized to issue 8,888,000,000 shares of $0.001 par value common stock. The Company is authorized to issue 50,000,000 shares of $0.001 par value, Class A, convertible preferred stock. Each share of preferred stock votes and is convertible into 15,000 shares of voting common stock. 1,000,000 shares of our Class A convertible preferred stock are held by Jason Remillard, our CEO, CFO and Director. On or about January 26, 2018, the Company committed to issue 1,200,000,000 shares to Myriad Software Productions, LLC, a company wholly owned by our CEO and controlling shareholder Jason Remillard, as part of the payment for the Company s purchase of ClassiDocs from Myriad Software Productions, LLC. While not yet issued as of this filing, these shares have been recorded as Common Shares Issuable within our financial statements for the period ending March 31, During the period ended March 31, 2018, the Company issued 75,000,000 shares to settle $3,750 of a convertible note. As previously stated, during the period ending March 31, 2018, the Company reserved approximately 97,662,906 common shares for consultants. The common shares are to be issued upon the one-year anniversary of their reserve date. As previous stated, out of the total common shares reserved, 32,142,857 common shares were reserved for Myriad Software Productions, LLC, a company wholly owned by our CEO, CFO and controlling shareholder Jason Remillard, for services rendered during the period ending March 31, NOTE 7 PRIOR PERIOD ADJUSTMENTS The opening deficit has been restated to effect expenses that were incurred from 2011 to 2017 inclusive not previously known when the original financial statements were prepared. As a result, opening deficit has been restated and the comparative balance sheet for the year ended December 31, 2017 has also been restated to take into account these prior period adjustments. The prior period adjustment for $89,448 was primarily for amounts owed to the State of Nevada for annual business license fees and to our stock transfer agent.

14 NOTE 8 - SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of filing the financial statements with the OTC Markets, the date the financial statements were available to be issued. Management is not aware of any significant events that occurred subsequent to the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure, other than those notes below: On or about April 9, 2018, a Current Report on Form 8-K was filed under the name Landstar, Inc. The filing was not authorized by the Company and we have had no known communication with the named filer. The 8-K purports to present financial statements for the years ended December 31, 2017 and 2016 and includes an entry for long term debt with interest for $1,000,000 on the balance sheet. Although the Company is aware of an unsubstantiated claim for a $500,000 debt obligation, we are not familiar with the allegations that form the basis for this claim. We provide this in the interest of full disclosure that such a statement could form the basis for claim if such statement accurately represents obligations of the Company since we do not recognize any such obligations. CERTIFICATION I, Jason Remillard, CEO and CFO, hereby certify that I have prepared the accompanying unaudited interim financial statements and notes hereto, and that these financial statements and accompanying notes present fairly, in all material respects, the financial position of the issuer and the results of its operations and cash flows for the periods presented, in conformity with accounting principles generally accepted in the United States, consistently applied. s/s Jason Remillard Jason Remillard, CEO and CFO