Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Apr. 21, 2015 | Jun. 30, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | EMAV HOLDINGS, INC. | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1076744 | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 46,648,565 | ||
Entity Public Float | $24,422,963 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, Date of Incorporation | 14-May-87 | ||
Entity Incorporation, State Country Name | Florida |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets | ||
Cash and cash equivalents | $63,914 | $125,450 |
Prepaid expenses | 77,666 | |
Total Current Assets | 141,580 | 125,450 |
Property and equipment, net | 34,719 | 2,289 |
Total Assets | 176,299 | 127,739 |
Current liabilities | ||
Accounts payable | 19,353 | 14,000 |
Accrued liabilities | 5,052 | 2,192 |
Deposit for future issuance of common stock | 30,000 | |
Payable to related party | 12,500 | |
Notes payable, current portion, net of debt discount of $15,820 and $16,364 at December 31, 2014 and December 31, 2013, respectively | 38,686 | 25,419 |
Total Current Liabilities | 75,591 | 71,611 |
Note payable, net of current portion, net of debt discount of $15,639 and $4,091 at December 31, 2014 and December 31, 2013, respectively | 32,237 | 4,177 |
Total Liabilities | 107,828 | 75,788 |
Commitments and contingencies (Note 6) | ||
Stockholders' Equity | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 47,421,565 shares and 51,002,565 shares issued and 46,546,565 shares and 51,002,565 shares outstanding at December 31, 2014 and December 31, 2013, respectively | 47,422 | 51,003 |
Treasury stock, 875,000 shares, $0.001 par value, issued not outstanding | -875 | |
Additional paid in capital | 4,832,054 | 1,075,598 |
Accumulated deficit | -4,810,130 | -1,074,650 |
Total Stockholders' Equity | 68,471 | 51,951 |
Total Liabilities and Stockholders' Equity | $176,299 | $127,739 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets Parenthetical (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Consolidated Balance Sheets Parenthetical | ||
Debt Discount - current | $15,820 | $16,364 |
Debt Discount - long term | $15,639 | $4,091 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 300,000,000 | 300,000,000 |
Common stock shares issued | 47,421,565 | 51,002,565 |
Common stock shares outstanding | 46,546,565 | 51,002,565 |
Treasury stock par value | $0.00 | $0.00 |
Treasury stock shares issued | 875,000 | |
Treasury stock shares outstanding |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Operations | ||
Revenues | ||
Cost of goods sold | ||
Gross Profit (Loss) | ||
Depreciation | 8,478 | 208 |
General and administrative | 3,700,072 | 353,204 |
Total Operating Expenses | 3,708,550 | 353,412 |
Operating Loss from Operations | -3,708,550 | -353,412 |
Interest expense | -26,930 | -11,789 |
Total Other Income (Expenses) | -26,930 | -11,789 |
Loss from Continuing Operations before Income Taxes | -3,735,480 | -365,201 |
Provision for income tax | ||
Net loss | ($3,735,480) | ($365,201) |
Basic and diluted net loss per share | ($0.07) | ($0.01) |
Weighted average number of shares outstanding | 50,787,179 | 38,131,366 |
Consolidated_Statement_of_Shar
Consolidated Statement of Shareholders' Equity (USD $) | Common Stock | Treasury Stock | Additional paid in capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2012 | $37,502 | $656,430 | ($709,449) | ($15,517) | |
Balance - Shares at Dec. 31, 2012 | 37,502,388 | ||||
Common shares sold at $0.30 per share | 314 | 156,338 | 156,652 | ||
Common shares sold at $0.30 per share - shares | 313,303 | ||||
Common shares sold at $0.50 per share | 1,025 | 306,425 | 307,450 | ||
Common shares sold at $0.50 per share - shares | 1,024,834 | ||||
Recapitalization | 12,162 | -43,595 | -31,433 | ||
Recapitalization - shares | 12,162,040 | ||||
Net loss | -365,201 | -365,201 | |||
Balance at Dec. 31, 2013 | 51,003 | 1,075,598 | -1,074,650 | 51,951 | |
Balance - Shares at Dec. 31, 2013 | 51,002,565 | ||||
Common shares sold at $0.50 per share | 769 | 383,731 | 384,500 | ||
Common shares sold at $0.50 per share - shares | 769,000 | ||||
Return of common shares to treasury as part of settlement with shareholder | -12,000 | 12,000 | |||
Return of common shares to treasury as part of settlement with shareholder - shares | -12,000,000 | ||||
Retirement of shares from treasury | -5,000 | 5,000 | |||
Retirement of shares from treasury - shares | -5,000,000 | 5,000,000 | |||
Common shares issued in conjunction with note payable | 100 | 29,900 | 30,000 | ||
Common shares issued in conjunction with note payable - shares | 100,000 | ||||
Common stock issued to fundraising advisors for capital raise | 50 | 24,950 | 25,000 | ||
Common stock issued to fundraising advisors for capital raise - shares | 50,000 | ||||
Common shares issued to consultants for services | 500 | 249,500 | 250,000 | ||
Common shares issued to consultants for services - shares | 500,000 | ||||
Common shares issued to vendors for services, issued from treasury | 6,125 | 3,056,375 | 3,062,500 | ||
Common shares issued to vendors for services, issued from treasury - shares | 6,125,000 | ||||
Net loss | -3,735,480 | -3,735,480 | |||
Balance at Dec. 31, 2014 | $47,422 | ($875) | $4,832,054 | ($4,810,130) | $68,471 |
Balance - Shares at Dec. 31, 2014 | 47,421,565 | -875,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | ||
Net loss | ($3,735,480) | ($365,201) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 8,478 | 208 |
Issuance of common stock to vendors for services | 3,187,500 | |
Amortization of prepaid consulting services for stock issuances | 82,334 | |
Amortization of debt discount | 22,228 | 9,545 |
Changes in operating assets and liabilities: | ||
Change in Advances receivable | -29,433 | |
Change in Prepaid expense | -10,000 | |
Change in Accounts payable | 5,353 | -3,000 |
Change in Accrued liabilities | 2,860 | 2,192 |
Net cash used in operating activities | -436,727 | -385,689 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | -40,908 | -2,497 |
Net cash used in investing activities | -40,908 | -2,497 |
Cash Flows from Financing Activities: | ||
Cash proceeds from sale of stock | 384,500 | 464,102 |
Cash payments of line of credit | -17 | |
Cash proceeds from loan from related party | 12,500 | -500 |
Cash proceeds from note payable | 40,000 | 53,000 |
Cash payments against note payable | -20,901 | -2,949 |
Net cash provided by financing activities | 416,099 | 513,636 |
Net increase (decrease) in cash and cash equivalents | -61,536 | 125,450 |
Cash and cash equivalents, beginning of the period | 125,450 | |
Cash and cash equivalents, end of the period | 63,914 | 125,450 |
Cash paid for income taxes | ||
Cash paid for interest | 1,536 | 51 |
Acquisition of business through issuance of common stock and forgiveness of advances receivable | 31,343 | |
Accrued stock payable for shares to be issued in connection with note payable, recorded as debt discount | 30,000 | |
Issuance of common stock in satisfaction of liability for issuance of common stock | 30,000 | |
Cancellation of 5,000,000 common shares per settlement | 5,000 | |
Gross up of debt principal, offset by debt discount to normalize interest on note payable | 33,233 | |
Issuance of common stock for prepaid consulting services and fundraising advisor | $150,000 |
Note_1_Nature_of_Operations_an
Note 1 - Nature of Operations and Going Concern | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 1 - Nature of Operations and Going Concern | NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN |
As used herein and except as otherwise noted, the term “Company”, “it(s)”, “our”, “us”, “we” and “EMAV” shall mean EMAV Holdings, Inc., a Delaware corporation, and its consolidated subsidiary Electric Motors and Vehicles Company. | |
EMAV Holdings, Inc. was originally incorporated on May 14, 1987 in Florida as Ventura Promotion Group, Inc. The Company became a public company in July 1998 and on November 12, 1998 changed its name to American Surface Technologies International, Inc. In September 2001, the State of Florida administratively dissolved the Company for not maintaining proper filings with the state and not paying franchise tax fees. In 2006, the Company changed its name to Global Environmental, Inc. In December 2007, the Company re-domiciled to Delaware and on August 27, 2008, changed its name to Ravenwood Bourne, Ltd. Effective September 30, 2011 the Company changed its name to PopBig, Inc. | |
On December 26, 2013, the Company changed its name to EMAV Holdings, Inc. and entered into a merger agreement to acquire Electric Motors and Vehicles Company, a Delaware corporation (“EMAVC”). The merger completed on December 27, 2013 and was accounted for as a reverse merger and recapitalization in which EMAVC is deemed to be the accounting acquirer. Consequently, the assets and liabilities and the operations are reflected as the historical financial statements prior to the merger will be those of EMAVC and are recorded at the historical cost basis of EMAVC, and the consolidated financial statements subsequent to completion of the merger include the assets and liabilities of EMAV and EMAVC, and the operations of the combined Company from the closing date of the merger. The Company elected to change its fiscal year end to be December 31. | |
Electric Motors And Vehicles Company was formed under the laws of Delaware on March 11, 2010. EMAVC’s principal business is electric vehicle manufacturing and sales. It plans to design, assemble, and sell premium electric rugged sport adventure vehicles directly through a network of dealerships. EMAVC will deploy a unique approach to build and bring its vehicles to market. Rather than creating a new vehicle and building out a new distribution network, EMAVC will use the four-door Jeep Wrangler as the platform for its signature electric vehicle. | |
Going Concern: | |
The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established a stable ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $3,735,480 for the year ended December 31, 2014, used net cash in operating activities of $436,727, had a working capital of $65,989, and has an accumulated deficit of $4,810,130 as of December 31, 2014. These factors, among others raise a substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Note_2_Significant_Accounting_
Note 2 - Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 2 - Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The following summary of significant accounting policies of the Company is presented to assist in the understanding of the Company’s consolidated financial statements. The consolidated financial statements and notes are the representation of the Company’s management who is responsible for their integrity and objectivity. The consolidated financial statements of the Company conform to accounting principles generally accepted in the United States of America (U.S. GAAP). | |
Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary Electric Motors and Vehicles Company. All intercompany balances and transactions are eliminated in consolidation. | |
Use of Estimates | |
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates of valuation of equity instruments. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. | |
Cash and Cash Equivalents | |
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. | |
Property and Equipment | |
Property and equipment consists of office equipment and an automobile, which are recorded at cost and is depreciated on a straight-line basis over its estimated useful life of three to five 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. | |
Long-lived Assets | |
In accordance with ASC 360, “Property, Plant, and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the estimated future undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss equal to the excess of the carrying value over the assets fair market value is recognized when the carrying amount exceeds the undiscounted cash flows. Through December 31, 2014, the Company has not experienced impairment losses on its long-lived assets. However, there can be no assurance that demand for the Company’s products will continue, which could result in an impairment of long-lived assets in the future. | |
Fair value of Financial Instruments and Fair Value Measurements | |
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: | |
Level 1 | |
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | |
Level 2 | |
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | |
Level 3 | |
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | |
The Company’s financial instruments consist principally of cash, accounts payable, accrued liabilities, and loan payable to related party. Pursuant to ASC 820 and ASC 825, “Financial Instruments”, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The Company had no financial assets or liabilities carried and measured on a non-recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. | |
Revenue Recognition | |
The Company recognizes revenues when persuasive evidence of an arrangement exists; delivery has occurred; price is fixed or determinable; and collectability of the related receivable is reasonably assured. The Company closely follows the provisions of ASC 605 “Revenue Recognition”, which includes the guidelines of Staff Accounting Bulletin No. 104 as described above. The Company has not recognized any revenue through December 31, 2014. | |
Earnings (Loss) Per Common Share | |
The Company computes net earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted net earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (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. For the years ended December 31, 2014 and 2013, there were no potentially dilutive common shares outstanding during the period. Outstanding warrants to purchase 2,500,000 shares of common stock were excluded from this calculation as their effect would be anti-dilutive due to the reported net losses in each period. | |
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services | |
Issuances of the Company’s common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. However, situations may arise in which counter performance may be required over a period of time but the equity award granted to the party performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates. | |
Non Cash Equity Transactions | |
Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received whichever is more readily determinable. | |
Income Taxes | |
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. | |
The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |
Recent Accounting Pronouncements | |
We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. | |
In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides guidance regarding management’s responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect that the adoption of this ASU to have a material effect on the Company’s financial position, operations, or cash flows. | |
In May 2014, the FASB issued ASU 2014-09, which will update Codification topic: “Revenue from Contracts with Customers”. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein. Management is currently evaluating the impact ASU 2014-09 will have on our financial position, results of operations and cash flows. | |
IMPACT OF NEW ACCOUNTING STANDARDS | |
In June 2014 the FASB issued ASU 2014-10 regarding development stage entities. The ASU removes the definition of development stage entity, as was previously defined under generally accepted accounting principles in the United States (U.S. GAAP), from the accounting standards codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. | |
In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders' equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. | |
The Company has chosen to adopt the ASU early for the Company’s financial statements as of September 30, 2014. The adoption of this pronouncement impacted the Company by eliminating the requirement to report inception to date financial information previously required. | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Note_3_Property_and_Equipment
Note 3 - Property and Equipment | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes | |||||
Note 3 - Property and Equipment | NOTE 3 – PROPERTY AND EQUIPMENT | ||||
Property and equipment consists of: | |||||
December 31, | |||||
2014 | 2013 | ||||
Property and equipment | $ | 43,405 | $ | 2,497 | |
Less: accumulated depreciation | (8,686) | (208) | |||
Property and equipment, net | $ | 34,719 | $ | 2,289 | |
Depreciation expense for the years ended December 31, 2014 and 2013 was $8,478 and $208, respectively. |
Note_4_Note_Payable
Note 4 - Note Payable | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes | |||||
Note 4 - Note Payable | NOTE 4 – NOTES PAYABLE | ||||
Notes payable consists of: | |||||
December 31, | December 31, | ||||
2014 | 2013 | ||||
Stockholder note payable, unsecured, 5% stated annual interest, monthly interest only payments from September 2014 to April 2015, 24 fixed monthly payments of $3,290 from May 2015 to April 2017. Original discount of $33,233 applied to normalize interest to 5% will be amortized over the loan term (P/Note 1) | $ | 73,233 | $ | - | |
Stockholder note payable, principal balance of $53,000, unsecured, interest bearing, monthly payment of $3,790 starting February 1, 2014, due April 1, 2015 (P/Note 2) | 29,149 | 50,051 | |||
$ | 102,382 | $ | 50,051 | ||
Note payable - current portion | 54,506 | 41,783 | |||
Note payable - long term portion | $ | 47,876 | $ | 8,268 | |
Debt discount- current portion | $ | 15,820 | $ | 16,364 | |
Debt discount- long term portion | $ | 15,639 | $ | 4,091 | |
On June 18, 2014, the Company executed a promissory note (the “P/Note 1”) with a stockholder lender in the principal amount of $40,000. The terms of the P/Note 1 require the Company to make (a) monthly interest only payments (5% annual rate) starting on September 18, 2014; (b) twenty-four (24) payments of $3,290 each, including principal and interest, beginning May 18, 2015 through April 18, 2017, at which time the entire principal amount, plus any and all accrued interest shall be due and payable; and, (c) in the event of an investment or series of related investments of at least $5,000,000 before April 18, 2017, then the entire principal balance and all accrued and unpaid interest shall be due in full in addition to a $5,000 prepayment penalty. In connection with the issuance of P/Note 1, the Company has recorded a debt discount of $33,233 applied to normalize interest to 5% which will be amortized as interest expense over the life of the Note 1. The Company has recognized interest expense of $5,865 for amortization of debt discount related to P/Note 1 for the year ended December 31, 2014. The unamortized portion of debt discount was $27,368 at December 31, 2014. In addition, the Company has recorded an interest expense of $1,000 on P/Note 1 for the year ended December 31, 2014. | |||||
On May 23, 2013, the Company executed a promissory note (the “P/Note 2”) with a stockholder in the principal amount of $53,000. The terms of the P/Note 2 required the Company to make (a) a principal payment of $3,000 on or before June 6, 2013, and (b) fifteen (15) monthly payments of $3,790 each, including principal and interest, beginning February 2014 through April 2015, at which time the entire principal amount, plus any and all accrued interest shall be due and payable. On March 30, 2015, the Company and the shareholder mutually agreed to extend the due date of payment of the P/Note 2 to April 1, 2016, at which time, the entire principal amount plus any and all accrued interest shall be due and payable (See Note 10). The Company is delinquent in making six (6) monthly payments and the note holder has not made a demand for the past due payments. | |||||
The Company has recorded interest expense of $3,698 and $2,244 on P/Note 2 for the years ended December 31, 2014 and 2013, respectively. The Company has recorded accrued interest of $4,052 and $2,192 as of December 31, 2014 and December 31, 2013, respectively. | |||||
As additional consideration and not as additional interest, the Company agreed to issue 100,000 shares of restricted common stock at its fair value of $30,000 to the stockholder upon execution of P/Note 2. The Company has formally issued the shares during the year ended December 31, 2014 (Note 7). As of December 31, 2013, the Company had not issued the 100,000 shares of its common stock and as such the value of shares to be issued was reflected as a liability in the balance sheet at that date. | |||||
In connection with the issuance of the common stock pursuant to P/Note 2, the Company has recorded a debt discount in the amount of $30,000 which is being amortized to interest expense over the life of the Note. The Company has recognized interest expense of $16,364 and $9,545 related to the amortization of debt discount related to P/Note 2 for the years ended December 31, 2014 and 2013, respectively. The net book value of the unamortized portion of the debt discount was $4,091 and $20,455 at December 31, 2014 and 2013, respectively. | |||||
The Company has recorded total interest expense, including amortization of debt discount, of $26,930 and $11,789 for the year ended December 31, 2014 and 2013, respectively. |
Note_5_Related_Party_Transacti
Note 5 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 5 - Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS |
In April 2010, the Company entered into a verbal agreement with its executive director for providing business consulting and marketing services to the Company. No fixed compensation was agreed at the time of the verbal agreement. On November 14, 2014, the executive director resigned from his position and entered into a separation agreement which provided for, among other covenants and conditions, a mutual release of all claims between the Company and its executive director. The executive director was previously alloted 13,000,000 shares of the Company’s common stock. Pursuant to the separation agreement, the executive will retain 1,000,000 shares of common stock, and the Company will have the sole discretion to determine the disposition of the remaining 12,000,000 shares of common stock. The Company has allocated these 12,000,000 shares of common stock as follows: (i) 6,125,000 shares of common stock have been reallocated to other persons and the Company has recorded an expense of $3,062,500 upon their issuance, (ii) 5,000,000 shares of common stock were cancelled and returned to the status of authorized and unissued shares as of December 31, 2014, and (iii) the remaining 875,000 shares of common stock to remain issued and held in treasury as of December 31, 2014 (see Note 7). The Company made cash payments to the executive director and recorded an expense of $54,100 and $65,334 as consulting fees for the years ended December 31, 2014 and 2013, respectively. | |
At December 31, 2014, amounts due to the Chief Executive Officer for advances made to the Company for working capital were $12,500. Amounts due to the Chief executive Officer are unsecured, non-interest bearing and due on demand without specific repayment terms. | |
The Company engaged an entity owned by the Chief Executive Officer/director of the Company to provide business advisory, consulting and legal services. The Company has made cash payments and recorded an expense of $42,500 and $77,011 as consulting services for the years ended December 31, 2014 and 2013, respectively. |
Note_6_Commitments_and_Conting
Note 6 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 6 - Commitments and Contingencies | NOTE 6 – COMMITMENTS AND CONTINGENCIES |
Settlement of litigation | |
The Company entered into an agreement for public relations services (the “Agreement”) with an unrelated third party (“DLC”) in September 2010. The Company disputed the quality of the services rendered and failed to tender final payment under the Agreement. DLC initiated legal action against the Company in January 2012 for collection under the Agreement. The Company did not have the resources to contest the action, so a default judgment was entered against the Company in favor of DLC in July 2012 in the amount of $14,425. Thereafter, DLC sought to collect on the judgment, and the total amount claimed by DLC grew to over $25,000 as DLC was entitled to collect attorney’s fees under the Agreement. | |
In October 2013, the entire Agreement with DLC was negotiated and settled requiring the Company to pay DLC $3,000 in November 2013 and $1,000 per month for the next 12-month period. The Company agreed not to contest DLC’s ownership of 80,000 shares of the Company’s stock. As of December 31, 2014, the remaining liability on the settlement of $7,000 is included in accounts payable in accompanying consolidated financial statements. The Company plans on paying DLC for the months of May 2014 through November 2014, which DLC has yet to demand. | |
Legal Costs and Contingencies | |
In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received. | |
If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable. |
Note_7_Stockholders_Equity
Note 7 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 7 - Stockholders' Equity | NOTE 7 – STOCKHOLDERS’ EQUITY |
The Company’s capitalization at December 31, 2014 was 300,000,000 authorized common shares with a par value of $0.001, and 10,000,000 authorized preferred shares with a par value of $0.001. | |
Common stock | |
During the year ended December 31, 2014, the Company sold 769,000 shares of its common stock at $0.50 per share and received total cash consideration of $384,500. All the common shares were sold to accredited investors pursuant to separate Private Placements. The Company issued 100,000 shares of its common stock to a third party lender as additional consideration in conjunction with providing cash proceeds of $53,000 as loan to the Company on May 23, 2013. The common shares issued were valued at their fair value of $30,000 to the third party lender (See Note 4). | |
On or around June 25, 2014, the Company engaged Lamnia International, LLC (Lamnia) to provide investor relations and investor communications services. The engagement is on a “month-to-month” basis. The Company has made cash payments of $25,250 for the services rendered for the year ended December 31, 2014. In addition, the Company issued to Lamnia 250,000 shares of restricted common stock valued at $125,000 based upon the selling price of $0.50 per share the Company was able to obtain for sales of similar stock around the date of issuance. The Company has recorded $150,250 as investor relations expense for the year ended December 31, 2014. | |
On September 1, 2014, the Company engaged Fastnet Advisors, LLC (Fastnet) to provide corporate advisory services. The engagement is for an initial period of 6-months. The Company agreed to pay to Fastnet $3,000 for September 2014; $4,000 per month for October 2014, November 2014 and December 2014; and $5,000 per month for January 2015 and February, 2015. The Company has made cash payments to Fastnet of $7,000 for consulting services rendered for September and October 2014 and has accrued the expense of $8,000 for consulting services rendered for November and December 2014 as accounts payable as of December 31, 2014. In addition, on December 30, 2014, the Company issued to Fastnet 250,000 shares of restricted common stock valued at $125,000 based upon the selling price of $0.50 per share the Company was able to obtain for sales of similar stock around the date of issuance. The Company has recorded $82,334 as consulting expense for stock issuance for the year ended December 31, 2014 and the remaining balance of $42,666 as prepaid assets as of December 31, 2014. The Company recorded a total of $98,333 as consulting expense to Fastnet for the year ended December 31, 2014. | |
On November 14, 2014, pursuant to a separation agreement with an executive, the executive returned 12,000,000 shares of the Company’s common stock, and the Company had the sole discretion to determine the disposition of the shares. The Company has allocated these 12,000,000 shares of common stock as follows: (i) reissued 6,125,000 shares of its common stock to third parties for consulting and business advisory services and the Company has recorded an expense of $3,062,500 upon their issuance, (ii) cancelled 5,000,000 shares of common stock valued at $5,000 based upon the par value of the shares at the date of issuance, and returned to the status of authorized and unissued shares as of December 31, 2014, and (iii) the remaining 875,000 shares of common stock to remain issued and not outstanding and held as treasury shares as of December 31, 2014 (See Note 5). | |
On December 1, 2014, the Company engaged a financial advisor and placement agent to raise capital for the Company for a six months term. Pursuant to the terms of the agreement, the Company paid a non-refundable retainer of $10,000 and issued 50,000 shares of its common stock valued at $25,000 based upon the selling price of $0.50 per share the Company was able to obtain for sales of similar stock around the date of issuance. The Company recorded the offering costs of $35,000 as prepaid expense for raising capital as of December 31, 2014. | |
Warrants | |
In April 2010, the Company granted three individuals, warrants to purchase 2,500,000 shares of common stock at an exercise price of $0.25 per share as compensation in connection with the individuals providing introductions for raising capital for the Company. The warrants have a six year term and expire in April 2016. The fair value of 2,500,000 warrants at the original issue date was estimated to be $1,077,927 using a Black-Scholes option pricing model with an expected life of 6 years, a risk free interest rate of 2.96%, a dividend yield of 0%, and an expected volatility of 100%. The expected volatility was estimated to be 100% since the Company's stock is not traded and no historical volatility data is available. As these services were provided as part of the Company’s equity funding, the value of the warrants were recorded within equity as part of the accounting for the related equity transactions. There have been no other grants of warrant instruments through December 31, 2014. | |
The Company has not established a stock option plan nor has issued any stock options through December 31, 2014. | |
As a result of all common stock issuances and cancellations, the total common shares issued at December 31, 2014 were 47,421,565, of which 46,546,565 shares were outstanding and the remaining 875,000 where held in treasury. | |
Preferred Stock | |
At December 31, 2014, the Company had no shares of preferred stock issued or outstanding. |
Note_8_Income_Taxes
Note 8 - Income Taxes | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes | |||||
Note 8 - Income Taxes | NOTE 8 - INCOME TAXES | ||||
The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate of 34% and 8.7% state income tax rate for Delaware for the years ended December 31, 2014 and 2013, respectively, to the income taxes reflected in the Consolidated Statements of Operations: | |||||
For the year ended December 31, | |||||
2014 | 2013 | ||||
Tax expense at statutory rate - federal | -34.00% | -34.00% | |||
State tax expense, net of federal benefit | -5.74% | -5.74% | |||
Valuation allowance | 39.74% | 39.74% | |||
Tax expense at actual rate | - | - | |||
The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows: | |||||
For the year ended December 31, | |||||
2014 | 2013 | ||||
Deferred tax assets and liabilities: | |||||
Net operating loss carry forward | $ 1,911,642 | $ 427,087 | |||
Valuation allowance | (1,911,642) | (427,087) | |||
Net deferred tax asset | $ - | $ - | |||
Deferred income taxes are provided for the tax effects of transactions reported in the financial statements and consist of deferred taxes related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. | |||||
At December 31, 2014 and 2013, the Company had net operating loss carry-forwards of approximately $4.8 million4,800,000 and $1.1 million1,100,000 resulting in deferred tax assets recorded of $1,812,286 and $427,087, respectively, which begin to expire in 2032. The Company has recorded a 100% valuation allowance on the deferred tax assets due to the uncertainty of its realization. The net change in the valuation allowance for the years ended December 31, 2014 and 2013 was an increase of $1,484,554 and $145,138, respectively. | |||||
In the normal course of business, the Company’s income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessment by these taxing authorities. Accordingly, the Company believes that it is more likely than not that it will realize the benefits of tax positions it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with FASB ASC 740-10-15. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the company’s financial position. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2014, tax years 2013, 2012 and 2011 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years. |
Note_9_Concentration_of_Credit
Note 9 - Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 9 - Concentration of Credit Risk | NOTE 9- CONCENTRATION OF CREDIT RISK |
The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses related to this in any such accounts. The Company’s bank balances did not exceed FDIC insured amounts as of December 31, 2014 and 2013, respectively. |
Note_10_Subsequent_Events
Note 10 - Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 10 - Subsequent Events | NOTE 10 – SUBSEQUENT EVENTS |
We have evaluated subsequent events and transactions that occurred through the date and time our financial statements were issued for potential recognition or disclosure in the accompanying financial statements. | |
From January 1, 2015 to April 21, 2015, the Company sold 102,000 shares of its common stock at a per share price of $0.50 pursuant to a private placement to three accredited investors resulting in $51,000 in aggregate proceeds to the Company. The shares of common stock issued in this offering were offered and sold without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section 4(a)(2) (previously 4(2)) of the Securities Act and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws, based on the lack of any general solicitation or advertising in connection with the sale of the securities; the representation of the investor to the Company that it is an accredited investor (as that term is defined in Rule 501 of Regulation D) and that it was purchasing the securities for its own account and without a view to distribute them. | |
On March 30, 2015, the Company and the shareholder mutually agreed to extend the due date of payment of the P/Note 2 to April 1, 2016, at which time, the entire principal amount plus any and all accrued interest shall be due and payable (See Note 4). |
Note_1_Nature_of_Operations_an1
Note 1 - Nature of Operations and Going Concern: Substantial Doubt about Going Concern (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Substantial Doubt about Going Concern | Going Concern: |
The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established a stable ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $3,735,480 for the year ended December 31, 2014, used net cash in operating activities of $436,727, had a working capital of $65,989, and has an accumulated deficit of $4,810,130 as of December 31, 2014. These factors, among others raise a substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Note_2_Significant_Accounting_1
Note 2 - Significant Accounting Policies: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Principles of Consolidation | Principles of Consolidation |
The accompanying consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary Electric Motors and Vehicles Company. All intercompany balances and transactions are eliminated in consolidation. |
Note_2_Significant_Accounting_2
Note 2 - Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Use of Estimates | Use of Estimates |
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates of valuation of equity instruments. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Note_2_Significant_Accounting_3
Note 2 - Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
Note_2_Significant_Accounting_4
Note 2 - Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Long-lived Assets | Property and Equipment |
Property and equipment consists of office equipment and an automobile, which are recorded at cost and is depreciated on a straight-line basis over its estimated useful life of three to five 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. | |
Long-lived Assets | |
In accordance with ASC 360, “Property, Plant, and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the estimated future undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss equal to the excess of the carrying value over the assets fair market value is recognized when the carrying amount exceeds the undiscounted cash flows. Through December 31, 2014, the Company has not experienced impairment losses on its long-lived assets. However, there can be no assurance that demand for the Company’s products will continue, which could result in an impairment of long-lived assets in the future. |
Note_2_Significant_Accounting_5
Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Fair Value of Financial Instruments and Fair Value Measurements | Fair value of Financial Instruments and Fair Value Measurements |
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: | |
Level 1 | |
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | |
Level 2 | |
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | |
Level 3 | |
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | |
The Company’s financial instruments consist principally of cash, accounts payable, accrued liabilities, and loan payable to related party. Pursuant to ASC 820 and ASC 825, “Financial Instruments”, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The Company had no financial assets or liabilities carried and measured on a non-recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. |
Note_2_Significant_Accounting_6
Note 2 - Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Revenue Recognition | Revenue Recognition |
The Company recognizes revenues when persuasive evidence of an arrangement exists; delivery has occurred; price is fixed or determinable; and collectability of the related receivable is reasonably assured. The Company closely follows the provisions of ASC 605 “Revenue Recognition”, which includes the guidelines of Staff Accounting Bulletin No. 104 as described above. The Company has not recognized any revenue through December 31, 2014. |
Note_2_Significant_Accounting_7
Note 2 - Significant Accounting Policies: Earnings (loss) Per Common Share (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Earnings (loss) Per Common Share | Earnings (Loss) Per Common Share |
The Company computes net earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted net earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (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. For the years ended December 31, 2014 and 2013, there were no potentially dilutive common shares outstanding during the period. Outstanding warrants to purchase 2,500,000 shares of common stock were excluded from this calculation as their effect would be anti-dilutive due to the reported net losses in each period. |
Note_2_Significant_Accounting_8
Note 2 - Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Income Taxes | Income Taxes |
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. | |
The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. |
Note_2_Significant_Accounting_9
Note 2 - Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. | |
In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides guidance regarding management’s responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect that the adoption of this ASU to have a material effect on the Company’s financial position, operations, or cash flows. | |
In May 2014, the FASB issued ASU 2014-09, which will update Codification topic: “Revenue from Contracts with Customers”. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein. Management is currently evaluating the impact ASU 2014-09 will have on our financial position, results of operations and cash flows. | |
IMPACT OF NEW ACCOUNTING STANDARDS | |
In June 2014 the FASB issued ASU 2014-10 regarding development stage entities. The ASU removes the definition of development stage entity, as was previously defined under generally accepted accounting principles in the United States (U.S. GAAP), from the accounting standards codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. | |
In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders' equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. | |
The Company has chosen to adopt the ASU early for the Company’s financial statements as of September 30, 2014. The adoption of this pronouncement impacted the Company by eliminating the requirement to report inception to date financial information previously required. | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Note_3_Property_and_Equipment_
Note 3 - Property and Equipment: Schedule of Property and Equipment (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of Property and Equipment | December 31, | ||||
2014 | 2013 | ||||
Property and equipment | $ | 43,405 | $ | 2,497 | |
Less: accumulated depreciation | (8,686) | (208) | |||
Property and equipment, net | $ | 34,719 | $ | 2,289 |
Note_4_Note_Payable_Schedule_o
Note 4 - Note Payable: Schedule of note payable (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of note payable | December 31, | December 31, | |||
2014 | 2013 | ||||
Stockholder note payable, unsecured, 5% stated annual interest, monthly interest only payments from September 2014 to April 2015, 24 fixed monthly payments of $3,290 from May 2015 to April 2017. Original discount of $33,233 applied to normalize interest to 5% will be amortized over the loan term (P/Note 1) | $ | 73,233 | $ | - | |
Stockholder note payable, principal balance of $53,000, unsecured, interest bearing, monthly payment of $3,790 starting February 1, 2014, due April 1, 2015 (P/Note 2) | 29,149 | 50,051 | |||
$ | 102,382 | $ | 50,051 | ||
Note payable - current portion | 54,506 | 41,783 | |||
Note payable - long term portion | $ | 47,876 | $ | 8,268 | |
Debt discount- current portion | $ | 15,820 | $ | 16,364 | |
Debt discount- long term portion | $ | 15,639 | $ | 4,091 |
Note_8_Income_Taxes_Schedule_o
Note 8 - Income Taxes: Schedule of income tax reconciliation (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of income tax reconciliation | For the year ended December 31, | ||||
2014 | 2013 | ||||
Tax expense at statutory rate - federal | -34.00% | -34.00% | |||
State tax expense, net of federal benefit | -5.74% | -5.74% | |||
Valuation allowance | 39.74% | 39.74% | |||
Tax expense at actual rate | - | - |
Note_8_Income_Taxes_Schedule_o1
Note 8 - Income Taxes: Schedule of deferred tax assets and liabilities (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of deferred tax assets and liabilities | For the year ended December 31, | ||||
2014 | 2013 | ||||
Deferred tax assets and liabilities: | |||||
Net operating loss carry forward | $ 1,911,642 | $ 427,087 | |||
Valuation allowance | (1,911,642) | (427,087) | |||
Net deferred tax asset | $ - | $ - |
Note_1_Nature_of_Operations_an2
Note 1 - Nature of Operations and Going Concern (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Details | |
Entity Incorporation, Date of Incorporation | 14-May-87 |
Entity Incorporation, State Country Name | Florida |
Note_1_Nature_of_Operations_an3
Note 1 - Nature of Operations and Going Concern: Substantial Doubt about Going Concern (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Net loss | $3,735,480 | $365,201 |
Net cash used in operating activities | 436,727 | 385,689 |
Working Capital | 65,989 | |
Accumulated deficit | $4,810,130 | $1,074,650 |
Note_3_Property_and_Equipment_1
Note 3 - Property and Equipment: Schedule of Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Property, Plant and Equipment, Gross | $43,405 | $2,497 |
Property, Plant and Equipment, Other, Accumulated Depreciation | -8,686 | -208 |
Property and equipment, net | $34,719 | $2,289 |
Note_3_Property_and_Equipment_2
Note 3 - Property and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Depreciation | $8,478 | $208 |
Note_4_Note_Payable_Schedule_o1
Note 4 - Note Payable: Schedule of note payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Other Notes Payable | $102,382 | $50,051 |
Other Notes Payable, Current | 54,506 | 41,783 |
Other Notes Payable, Noncurrent | 47,876 | 8,268 |
Debt Discount - current | 15,820 | 16,364 |
Debt Discount - long term | 15,639 | 4,091 |
P/Note 1 | ||
Other Notes Payable | 73,233 | |
P/Note 2 | ||
Other Notes Payable | $29,149 | $50,051 |
Note_4_Note_Payable_Details
Note 4 - Note Payable (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 18, 2014 | 23-May-13 | |
Interest expense | $26,930 | $11,789 | ||
P/Note 1 | ||||
Original Amount of Promissory Note | 40,000 | |||
Interest expense | 1,000 | |||
Debt Instrument, Unamortized Discount | 27,368 | |||
P/Note 1 | Amortization of Debt Discount | ||||
Interest expense | 5,865 | |||
P/Note 2 | ||||
Original Amount of Promissory Note | 53,000 | |||
Interest expense | 3,698 | 2,244 | ||
Debt Instrument, Unamortized Discount | 4,091 | 20,455 | ||
Accrued Liabilities, Current | 4,052 | 2,192 | ||
P/Note 2 | Amortization of Debt Discount | ||||
Interest expense | $16,364 | $9,545 |
Note_5_Related_Party_Transacti1
Note 5 - Related Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Consulting fees paid to executive director | $54,100 | $65,334 |
Consulting fees paid to related party | $42,500 | $77,011 |
Note_6_Commitments_and_Conting1
Note 6 - Commitments and Contingencies (Details) (USD $) | 1 Months Ended | ||
Oct. 31, 2013 | Jul. 31, 2012 | Dec. 31, 2014 | |
Litigation Settlement, Amount | $14,425 | ||
Estimated Litigation Liability | 25,000 | ||
Initial payment to settle litigation debt | 3,000 | ||
Subsequent monthly payments to settle litigation debt | 1,000 | ||
RemainingLiabilityOnTheSettlementMember | |||
Accounts Payable, Current | $7,000 |
Note_7_Stockholders_Equity_Det
Note 7 - Stockholders' Equity (Details) (USD $) | 12 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2015 | Jan. 31, 2015 | Nov. 30, 2014 | Oct. 31, 2014 | Sep. 30, 2014 | |
Common stock shares authorized | 300,000,000 | 300,000,000 | |||||
Common stock par value | $0.00 | $0.00 | |||||
Preferred Stock, Shares Authorized | 10,000,000 | ||||||
Preferred Stock, Par or Stated Value Per Share | $0.00 | ||||||
Common shares sold at $0.50 per share | $384,500 | $307,450 | |||||
CommonSharesIssuedInConjunctionWithDebtSettlement | 30,000 | ||||||
Professional and Contract Services Expense | 98,333 | ||||||
Prepaid expenses | 77,666 | ||||||
Common shares issued to vendors for services, issued from treasury | 3,062,500 | ||||||
Treasury stock shares issued | 875,000 | ||||||
Common stock issued to fundraising advisors for capital raise | 25,000 | ||||||
Common stock shares issued | 47,421,565 | 51,002,565 | |||||
Common stock shares outstanding | 46,546,565 | 51,002,565 | |||||
LamniaInternationalLlcMember | |||||||
Common Stock, Shares Subscribed but Unissued | 250,000 | ||||||
AccruedStockPayable | 125,000 | ||||||
Professional and Contract Services Expense | 150,250 | ||||||
Fastnet Advisors LLC | |||||||
Common Stock, Shares Subscribed but Unissued | 250,000 | ||||||
AccruedStockPayable | 125,000 | ||||||
Professional and Contract Services Expense | 82,334 | ||||||
Accounts Payable, Current | 4,000 | 5,000 | 5,000 | 4,000 | 4,000 | 3,000 | |
Prepaid expenses | 42,666 | ||||||
Common Stock | |||||||
Common shares sold at $0.50 per share - shares | 769,000 | 1,024,834 | |||||
Common shares sold at $0.50 per share | 769 | 1,025 | |||||
CommonSharesIssuedInConjunctionWithDebtSettlementShares | 100,000 | ||||||
Cancellation of common shares per settlement - shares | 5,000,000 | ||||||
Cancellation of common shares per settlement | 5,000 | ||||||
Common stock issued to fundraising advisors for capital raise - shares | 50,000 | ||||||
Common stock issued to fundraising advisors for capital raise | 50 | ||||||
Treasury Stock | |||||||
Return of common shares to treasury as part of settlement with shareholder - shares | 12,000,000 | ||||||
Common shares issued to vendors for services, issued from treasury - shares | 6,125,000 | ||||||
Common shares issued to vendors for services, issued from treasury | $6,125 |
Note_7_Stockholders_Equity_War
Note 7 - Stockholders' Equity: Warrants (Details) (USD $) | 1 Months Ended |
Apr. 30, 2010 | |
Details | |
Warrants Granted to Three Individuals | 2,500,000 |
Fair Value of Warrants Granted to Three Individuals | $1,077,927 |
Note_8_Income_Taxes_Schedule_o2
Note 8 - Income Taxes: Schedule of income tax reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | -34.00% | -34.00% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | -5.74% | -5.74% |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 39.74% | 39.74% |
Note_8_Income_Taxes_Schedule_o3
Note 8 - Income Taxes: Schedule of deferred tax assets and liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $1,911,642 | $427,087 |
Deferred Tax Assets, Valuation Allowance, Current | ($1,911,642) | ($427,087) |
Note_8_Income_Taxes_Details
Note 8 - Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Operating Loss Carryforwards | $4,800,000 | $1,100,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $1,484,554 | $145,138 |