| The Company and Significant Accounting Policies | Note 1. The Company and Significant Accounting
Policies Ecomat Inc. (the “Company”) was
incorporated on December 14, 1995 pursuant to the laws of the State of Delaware. On February 9, 2007, the Company completed its
change in domicile to Nevada. The Company used to operate a wet-cleaning
process which was one of the first environmentally sound solution to current dry-cleaning methods. Basis of Presentation: We adopted “fresh-start” accounting
as of June 15, 2006 in accordance with procedures specified by AICPA Statement of Position (“SOP”) No. 90-7, “Financial
Reporting by Entities in Reorganization under the Bankruptcy Code. Significant Accounting Policies: Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and
the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Cash and Cash Equivalents: For financial statement presentation purposes,
the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or
cash equivalents. There were no cash equivalents at June 30, 2020 or 2019. Property and Equipment: New property and equipment are recorded at
cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation
value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 years.
Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to
operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period
the event takes place. Valuation of Long-Lived Assets: We review the recoverability of our long-lived
assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that
the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover
the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the
related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the
difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows.
The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as
other fair value determinations. Stock Based Compensation: Stock-based awards are accounted for using
the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of
stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options
include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the
exercise price of the warrants and the risk-free interest rate. Fair Value of Financial Instruments: FASB ASC 825, “Financial Instruments,”
requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized
on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current transaction between willing parties. At June 30, 2020 and
2019, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates
fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates. Earnings per Common Share: We compute net income (loss) per share in accordance
with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of
the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.
In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased
from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Income Taxes: We have adopted ASC 740, Accounting for Income
Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential
benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it
is more likely than not it will utilize the net operating losses carried forward in future years. We must make certain estimates and judgments
in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain
tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial
statement purposes. Deferred tax assets and liabilities are determined
based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in
effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization
of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient
taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and
from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not
materialize and have provided a valuation allowance against substantially all of our net deferred tax asset. Management will continue to evaluate the realizability
of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding
valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination.
Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which
we operate. In addition, the calculation of our tax liabilities
involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax
audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes
will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize
a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge
in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate
assessment to be. ASC 740 which requires recognition of estimated
income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable
to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates,
with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. Uncertain Tax Positions: The Financial Accounting Standards Board issued
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, Accounting
for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007. FIN No. 48 addresses
the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements. Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely
than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the
position. The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit
that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance
on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements. Our federal and state income tax returns are
open for fiscal years ending on or after June 30, 2007. We are not under examination by any jurisdiction for any tax year. At June
30, 2020, we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN
48. Recent Accounting Pronouncements In July 2018, the FASB issued ASU No. 2018-10,
Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation
guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the
same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease
guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception
of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured
on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents
the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private
companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with
early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases
existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During
the year ended June 30, 2020, the Company assessed the impact this guidance had on its financial statements and concluded that
at present ASU No. 2018-10 has no impact on its financial statements. In August, 2016, the FASB issued ASU No. 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues
Task Force). Effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within
those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and
interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim
period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning
of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in
the same period. In May, 2016, the FASB issued ASU No. 2016-12,
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this Update
affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective.
The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition
requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts
with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. In April, 2016, the FASB issued ASU No. 2016-10,
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update
affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective.
The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition
requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts
with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company has considered all new accounting
pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations,
financial condition, or cash flows, based on current information. |
