Vopia, Inc.

In May 2014, and later amended in August 2015, the Financial Accounting Standards Board ("FASB") issued new Accounting Standards Update ("ASU") regarding revenue recognition under GAAP. This new guidance will supersede nearly all existing revenue recognition guidance, and is effective for public entities for annual and interim periods beginning after December 31, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. The Company adopted the standard effective January 1, 2018 with no impact n the Company's financial statements.

The note payable is currently in default. As a result the lender is entitled to increase the interest rate on the note to 22% and to increase the conversion eligible amount of the note by 15% for each major default.

Power Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of 4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates. The beneficial ownership limitation may not be waived by Power Up. Upon issue, the Company recorded derivative liabilities for the conversion feature of the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following assumptions: an exercise price of $0.0143, our stock price on the date of grant $.022, expected dividend yield of 0%, expected volatility of 131.300, risk free interest rate of 2.16 for notes payable , and remaining term of .80 year. . Upon initial valuation, the derivative liability of $149,884 was recorded as a debt discount which is being amortized over the life of the note payable. 

We originally decided to pursue an agreement with a Chinese company to develop our drone hardware. In the past three months, however, we have been working on a number of technical issues the main one being the dynamic video streaming from the drone to the cloud. The DG Intruder drone has an onboard flash video storage card but at the same time we need to stream the video footage to the cloud to be stored and reviewed at any time. We came to the realization that our Chinese partners would not be able to complete this task for us.

We also plan on working with Skydio and its drone platform as we believe technically Skydio has promising neural network AI available in the drone market today. Our technicians are working on integrating the Skydio software development kit into our DG Intruder. We are very confident that we can deliver the day night time on board cameras, autonomous following and anti-collision capabilities, which includes the security sweep and call home functions of the drone functionality, and cloud video streaming functionality.