NOTE 3 – CONSOLIDATED VARIABLE INTEREST ENTITY

The Financial Accounting Standards Board authoritative guidance on consolidation requires the primary beneficiary of a Variable Interest Entity (VIE) to consolidate that entity. The primary beneficiary of a VIE is a company that has a controlling financial interest in the VIE without any corresponding voting rights control. Controlling financial interests exist when a company has both the power to direct the activities that most significantly impact a VIE’s economic performance, on the one hand, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE, on the other. The Company is one member, along with two other technology firms, of a collaborative joint venture, Advanced. This enterprise was formed by the joint venture participants for the purpose of focusing on globally broadening the utilization of nanoparticle-enhanced nanofibers across a diverse range of mass-market industrial and consumer applications. The Company was involved in the formation of Advanced in September 2016. During the fourth quarter 2016, the Company determined that it was the primary beneficiary of Advanced based on qualitative and quantitative factors. Among other factors, and more specifically, the equity investors in Advanced do not, and are not obligated to, provide sufficient financial resources for the entity to support itself in terms of day-to-day research and development activities. However, the Company has provided financial support that is disproportionate to its equity interest and our CEO was involved in the organization of the entity. U.S. GAAP thereunder, requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss from the VIE’s activities. For the year ended December 31, 2016, the Company provided the financial resources in the amount of $52,750 as support for Advanced’s day-to-day research and development activities. See Notes 1 and 20.

The carrying value of the assets and liabilities of Advanced which are consolidated as of December 31, 2016 are as follows:

	As of December 31, 2016
Assets
Current Assets:
Cash and cash equivalents	$	4,020
Total current assets		4,020
Total assets	$	4,020

Liabilities and Members’ Deficit
Current Liabilities:
Due to Findex.com, Inc.	$	52,750
Total current liabilities		52,750
Stockholders’ equity:
Member’s investment		4,020
Accumulated deficit		(52,750	)
Total members’ deficit		(48,730	)
Total liabilities and members’ deficit	$	4,020

Net loss	$	(52,750	)