NOTE 3 – CONSOLIDATED VARIABLE INTEREST ENTITY

The Financial Accounting Standards Board (FASB) authoritative guidance on consolidation requires the “primary beneficiary” of a variable interest entity (a “VIE”) to consolidate that entity. The “primary beneficiary” of a VIE, for this purpose, is a company that has a controlling financial interest in the VIE without any corresponding voting rights control. A controlling financial interest in this regard exists when a company is determined to have 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, among others, of a collaborative joint venture limited liability company, Advanced Nanofibers LLC (“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 enterprise is focused on developing and globally industrializing a variety of proprietary breakthrough advances in nano-based and other performance-enhancing cementitious product technologies. Having been involved in the formation of Advanced in September 2016, the Company determined during the fourth quarter of 2016 that it was the primary beneficiary of Advanced, among the equity participants, based on qualitative and quantitative criteria. Among other factors, and more specifically, it was determined that 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 the Company’s management was involved in the organization of the entity. U.S. GAAP thereunder, requires a VIE to be consolidated by a company if and when that company holds a majority of the variable interests in the entity and is thus subject to a majority of the risk of loss from the VIE’s activities. For the nine months ended September 30, 2017, the Company provided the financial resources in the amount of $175,075 as support for Advanced’s day-to-day research and development activities and a total of $227,825 since Advanced’s inception. See Note 1.

The carrying value of the assets and liabilities of Advanced which are consolidated as of September 30, 2017 are as follows:

	September 30, 2017 (Unaudited)			December 31, 2016 (Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	23,727		$	4,020
Accounts receivable, net		702			—
Total current assets		24,429			4,020
Total assets	$	24,429		$	4,020

Liabilities and Members’ Deficit
Current Liabilities:
Due to Findex.com, Inc.	$	62,825		$	52,750
Accounts payable		5,321			—
Total current liabilities		68,146			52,750
Stockholders’ equity:
Members' investment		264,020			4,020
Accumulated deficit		(307,737	)		(52,750	)
Total members’ equity		(43,717	)		(48,730	)
Total liabilities and members’ deficit	$	24,429		$	4,020

Net loss	$	(254,987	)	$	(52,750	)

For the nine months ended September 30, 2017 and 2016, respectively, Advanced recognized $1,705 and $0 in revenue.