U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2017

For the transition period from _________ to _________

Commission File No.000-53462

VNUE, INC.

(Name of Registrant in its Charter)

104 West 29th Street, 11th Floor, New York, NY 10001

(Address of Principal Executive Offices)

Issuer’s Telephone Number: 857-777-6190(833) 937-5493

(Registrant’s telephone number, including area code)

Securities registered under Section 12 (b) of the Exchange Act:

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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. YesxNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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.) YesxNo¨No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.x¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨Nox

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitionsThe number of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2shares of the Exchange Act. (Check One)registrant’s common stock outstanding as of June 26, was 1,149,756,152.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

September 30, 2017

Common Voting Stock: 69,244,707

VNUE, INC.

INDEX TO FORM 10-Q FILING

FOR THE PERIOD ENDED SEPTEMBER 30, 2017

QUARTERLY REPORT ON FORM 10-Q

March 31, 2020

TABLE OF CONTENTS

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EXPLANATORY NOTE

VNUE, Inc. (the “Company”) filed this Quarterly Report on Form 10-Q on a delayed basis based on reliance on the Order of the Securities and Exchange Commission dated March 4, 2020, as modified March 25, 2020, pursuant to Section 36 of the Securities Exchange Act of 1934 modifying exemptions from the reporting and proxy delivery requirements for public companies (Release No. 34-22465).

This Report, including financial statements and completion of the auditing process, was delayed as a result of government-imposed quarantines, office closures and travel restrictions, which affected both the Company’s and its service provider’s personnel. Our office closing and quarantines have impacted our ability to both internally compile and complete our financial statements and to provide business records and to meet with auditors. Office staff has been forced to work remotely without access to the records kept in the Company’s offices. As a result of these government-imposed quarantines, office closings and travel restrictions, the Company’s accounting personnel and service providers experienced in processing certain of its accounting records and receipts required to complete the audit of the Company’s financial statements.

PART I

- FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements.

The following unaudited interim financial statements of VNUE, Inc. (referred to herein as the “Company,” “we,” “us” or “our”) are included in this quarterly report on Form 10-Q:

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

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

VNUE, INC.

(UNAUDITED) CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

THREE MONTHS ENDED MARCH 31, 2020 AND 2019

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

VNUE, INC.

(UNAUDITED) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Basis of Presentation

The accompanying interimunaudited condensed consolidated financial statements of VNUE, Inc., a Nevada corporation (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Therefore,10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity withrequired by generally accepted accounting principles.principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.included. Operating results for the interim periodthree months ended September 30, 2017March 31, 2020, are not necessarily indicative of the results that canmay be expected for the year ending December 31, 2017.2020.

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Table of Contents

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. Such reclassifications did not affect the Company’s financial position, results of operations, or cash flows.

VNUE, Inc.

September 30, 2017 and 2016

Index to the Condensed Consolidated Financial Statements

F-1

Table of Contents

VNUE, Inc.

Condensed Consolidated Balance Sheets

See accompanying notes to the condensed consolidated financial statements.

F-2

Table of Contents

VNUE, Inc.

Condensed Consolidated Statements of Operations

See accompanying notes to the condensed consolidated financial statements.

F-3

Table of Contents

VNUE, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Deficit

For the Nine Months ended September 30, 2017

(Unaudited)

See accompanying notes to the condensed consolidated financial statements.

F-4

Table of Contents

VNUE, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

See accompanying notes to the condensed consolidated financial statements.

F-5

Table of Contents

VNUE, Inc.

Three and Nine Months Ended September 30, 2017 and 2016

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Organization and Basis of Presentation

History and Organization

VNUE, Inc. (formerly Tierra Grande Resources, Inc.) ("VNUE"(“VNUE”, "TGRI"“TGRI”, or the "Company"“Company”) was incorporated under the laws of the State of Nevada on April 4, 2006.

On May 29, 2015, VNUE, Inc. entered into a merger agreement with VNUE Washington, Inc. Pursuant to the terms of the Merger Agreement, all of the outstanding shares of any class or series of VNUE Washington were exchanged for an aggregate of 50,762,987 shares of TGRI common stock. As a result of the Merger, VNUE Washington became a wholly-owned subsidiary of the Company, and the transaction was accounted for as a reverse merger with VNUE Washington deemed the acquiring company for accounting purposes, and the Company deemed the legal acquirer.

Overview of Business

We are a music technology company, that offers a suite of products and services that monetize and monitor music for artists, labels, performing rights organizations, publishers, writers, radio stations, venues, restaurants, bars, and other stakeholders in music.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, during the three months ended March 31, 2020, the Company incurred an operating loss of $639,557, used cash in operations of $181,277 and had a stockholders’ deficit of $4,543,301. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The Company does not have any commitments for additional capital. The financial statements do not include any adjustments that might be necessary if the Company is developingunable to continue as a technology driven solutiongoing concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2019, consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern.

On March 31, 2020, the Company had cash on hand of $16,419. Subsequent to March 31, 2020, we raised $100,000 from the issuance of three convertible notes to an accredited investor - see Note 10, Subsequent Events. Management estimates that the current funds on hand will be sufficient to continue operations through August 31, 2020. The continuation of the Company as a going concern is dependent upon its ability to obtain necessary debt or equity financing to continue operations until it begins generating positive cash flow. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for Artists, Venues and Festivals to automateour stockholders, in the capturing, publishing and monetizationcase of their content.equity financing.

NOTE 2 – SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES

Basis of Consolidation

The Company conductedconsolidates all wholly-owned and majority-owned subsidiaries in which the Company’s power to control exists. The Company consolidates the following subsidiaries and/or entities:

VNUE Technology, Inc. and VNUE Media, Inc. were inactive corporations on March 31, 2020, and 2019, respectively. Inter-company balances and transactions have been eliminated.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606,Revenue from Contracts. The implementation of ASC 606 did not have a reverse stock splitmaterial impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

The Company recognizes revenue on the sale of vouchers that fans redeem for limited edition CD sets that contain the recording of live concerts and made available to concert attendees immediately after the show and on-line. Revenue is recognized on the sale of a product when the risk of loss transfers to our customers, and the collection of the Company’sreceivable is reasonably assured, which generally occurs when after the event is held.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. Significant estimates include the assumptions used for impairment testing of intangible assets, assumptions used to value the derivative liabilities, the valuation allowance for the deferred tax asset, and the accruals for potential liabilities. Actual results could differ from these estimates.

Fair Value of Financial Instruments

The Company determines the fair value of its assets and liabilities based on the exchange price in U.S. dollars that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value:

The carrying amounts of financial instruments such as cash, and accounts payable and accrued liabilities, approximate the related fair values due to the short-term maturities of these instruments.

The fair value of the derivative liabilities of $1,213,372 and $922,509 on March 31, 2020, and December 31, 2019, respectively, were valued using Level 3 inputs.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Income (Loss) per Common Share

Basic net income (loss) per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Diluted income (loss) per share reflects the potential dilution, using the treasury stock method, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income (loss) of the Company as if they had been converted at the beginning of the periods presented, or issuance date, if later. In computing diluted income (loss) per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants may have a ratio 1dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share on March 31, 2020, because their impact was anti-dilutive. As of March 31, 2020, the Company had 23,805,027 outstanding warrants and 4,736,115,952 shares related to convertible notes payables respectively, which were excluded from the computation of net loss per share.

Intangible Assets

The Company accounts for 10intangible assets in accordance with the authoritative guidance issued by the FASB. Intangibles are valued at their fair market value and are amortized taking into account the character of each share issuedthe acquired intangible asset and outstandingthe expected period of benefit. The Company evaluates intangible assets for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated undiscounted future cash flows. Recoverability of intangible assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors, including past operating results, budgets, economic projections, market trends, and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss.

The Company had intangible assets with a carrying value of $-0- and $-0- as of March 31, 2020, and December 31, 2019, respectively. In accordance with ASC Topic 350 – Goodwill and Other Intangible Assets, the Company assesses the carrying value of its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable and records an impairment charge if the carrying value of such intangible assets is not recoverable and if it exceeds its fair value. While our fiscal year-to-date financial performance has not met our expectations, and the enterprise value of the Company based on the effectivecurrent price of our common stock may fluctuate at or near the recorded level of finite-lived intangible assets, management does not consider these to be events requiring the performance of an impairment test. The Company will continue to monitor its operating results for indicators of impairment and perform additional tests as necessary, which could result in an impairment charge to intangible assets.

On December 31, 2019, we conducted an impairment analysis and although we believe that we will be able to generate revenues in the future from our Sounstr asset, based on the lack of any historical sales to date or lack of April 15, 2017. The reverse was effectiveany pending contracts, we determined that we could not substantiate any anticipated future revenues, and determined that the remaining book value of the intangible of $132,397 should be impaired as of December 31, 2019.

Recently Issued Accounting Pronouncements

Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission are not believed by management to have a material impact on the market on August 7, 2017. All historical reported share amounts within have been adjusted to reflect the reverse stock split.Company’s present or future consolidated financial statements.

NOTE 3 – RELATED PARTY TRANSACTIONS

DiscLive Network

On July 10, 2017, the Company entered into a Licensing Agreement with RockHouse Live Media Productions, Inc., DBA “DiscLive” or “DiscLive Network” (“DiscLive”) to formalize the terms of the Strategic Alliance entered into by the Company with DiscLive on July 21, 2016. VNUE has acquired an exclusive license from DiscLive, for a period of three years unless earlier terminated under the Agreement, for the use of all its assets, including but not limited to the DiscLive brand, website (including eCommerce platform), intellectual property, inventory, equipment, trade secrets and anything related to its business of “instant live” recording. Under the terms of the Agreement, DiscLive granted the Company a worldwide exclusive license. In exchange for the license, DiscLive will receive a license fee equal to five percent (5%) of any sales derived from the sale and use of the products and services. DiscLive is controlled by our Chief Executive Officer. Revenues of $12,059 and $23,556 and direct cost of revenues of $8,509 and $58,438 during the three months ended March 31, 2020, and 2019, respectively, were recorded using the assets licensed under this agreement. Our Chief Executive Officer agreed to waive the right to receive these license fees for both years.

Accrued Payroll to Officers

Accrued payroll due to two officers was $131,750 and $108,000 respectively, as of March 31, 2020, and December 31, 2019, respectively.

During the three months ended March 31, 2019, the Company entered into a conversion and cancellation of a debt agreement with its Chief Executive Officer, Zach Bair. The Company agreed to convert accrued payroll of $52,700 into 15,057,143 shares of the Company’s stock, valued at $40,654 using the closing market price of the Company’s stock on the date of the conversion and cancellation of debt agreements. The difference between the total accrued payroll converted of $52,700, and the market value of the shares issued of $40,654, was recorded as contributed capital of $12,046 in the condensed consolidated statements of stockholders’ deficit for the three months ended March 31, 2019. The Chief Executive Officers’ compensation is $170,000 per year, and As of March 31, 2020, and December 31, 2019, the amounts due to Mr. Bair were $75,500 and $40,000, respectively.

On September 15, 2017, the Company entered into an Advisory Agreement with Louis Mann (“MANN”) for MANN’s continued and ongoing advisory services to the Company’s as Executive Vice President and director for six (6) months and with automatic six (6) months renewals unless terminated in accordance with the agreement. MANN is to receive $5,000 per month. This agreement was renewed on October 1, 2019, and on April 1, 2020. $15,000 in compensation was expensed during the three months ended March 31, 2020, and March 31, 2019.

As of March 31, 2020, and December 31, 2019, the amounts due to Mr. Mann were $56,250 and $40,000, respectively

Advances from Employees

From time to time, stockholders of the Company advance funds to the Company for working capital purposes. The advances are unsecured, non-interest bearing, and due on demand. On December 31, 2018, advances from employees were $14,720. During the year ended December 31, 2019, a former employee and stockholder agreed to forgive $14,000 owed by the Company. The Company recorded the $14,000 as a gain on the settlement of debt, leaving a remaining balance of $720 on March 31, 2020, and December 31, 2019.

NOTE 4 – NOTE PAYABLE

On December 17, 2015, the Company issued a Promissory Note in the principal amount of $9,000. The note became due within 10 business days of the Company receiving notice of the effectiveness of its Form S-1 filed on February 22, 2016. Failure to make payment during that 10 business day period shall constitute an Event of Default, as a result of which the note will become immediately due and payable and the balance will bear interest at 7%. The Company’s Form S-1 was declared effective on March 8, 2016, and payment was due before March 22, 2016. The Company did not repay the note before March 22, 2016; therefore, the note is in default with an interest rate of 7%.

On April 30, 2019, the Company issued an unsecured Promissory Note in the principal amount of $25,000. The Note was due and payable on August 30, 2019, along with $5,000 worth of interest. The Company continues to accrue interest on this note at the rate of $1,250 per month. The Promissory Note is past due, however, the maker of the Note has verbally agreed not to call a default.

During the three months ended March 31, 2020, the Company recorded $4,380 of accrued interest expense on these two Notes.

The balance of the Notes Payable outstanding was $34,000 and $34,000 as of March 31, 2020, and December 31, 2019, respectively.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable consist of the following: