Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 18-May-15 | |
Document and Entity Information: | ||
Entity Registrant Name | EMAV HOLDINGS, INC. | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 1076744 | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 46,668,565 | |
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 | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Incorporation, Date of Incorporation | 14-May-87 | |
Entity Incorporation, State Country Name | Florida |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $19,141 | $63,914 |
Prepaid expenses | 35,000 | 77,666 |
Total Current Assets | 54,141 | 141,580 |
Property and equipment, net | 31,855 | 34,719 |
Total Assets | 85,996 | 176,299 |
Current liabilities | ||
Accounts payable | 27,000 | 19,353 |
Accrued liabilities | 16,459 | 5,052 |
Payable to related party | 12,500 | 12,500 |
Notes payable, current portion, net of debt discount of $11,729 and $15,820 at March 31, 2015 and December 31, 2014, respectively | 45,552 | 38,686 |
Total Current Liabilities | 101,511 | 75,591 |
Note payable, net of current portion, net of debt discount of $12,707 and $15,639 at March 31, 2015 and December 31, 2014, respectively | 25,441 | 32,237 |
Total Liabilities | 126,952 | 107,828 |
Commitments and contingencies (Note 6) | ||
Stockholders' Equity | ||
Common stock, $0.001 par value, 300,000,000 shares authorized; 47,523,565 shares and 47,421,565 shares issued and 46,648,565 shares and 46,546,565 shares outstanding at March 31, 2015 and December 31, 2014, respectively | 47,524 | 47,422 |
Treasuary stock, 875,000 shares, $0.001 par value, issued not outstanding | -875 | -875 |
Additional paid in capital | 4,882,952 | 4,832,054 |
Accumulated deficit | -4,970,557 | -4,810,130 |
Total Stockholders' Equity (Deficit) | -40,956 | 68,471 |
Total Liabilities and Stockholders' Equity | $85,996 | $176,299 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets Parenthetical (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets Parenthetical | ||
Debt Discount Current | $11,729 | $15,820 |
Debt Discount NonCurrent | $12,707 | $15,639 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 300,000,000 | 300,000,000 |
Common stock shares issued | 47,523,565 | 47,421,565 |
Common stock shares outstanding | 46,648,565 | 46,546,565 |
Treasury stock par value | $0.00 | $0.00 |
Treasury stock shares authorized | 875,000 | 875,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Condensed Consolidated Statements of Operations | ||
Revenues | ||
Cost of goods sold | ||
Gross Profit (Loss) | ||
Depreciation | 2,864 | 1,494 |
General and administrative | 148,507 | 199,195 |
Total Operating Expenses | 151,371 | 200,689 |
Operating Loss from Operations | -151,371 | -200,689 |
Interest expense | -9,056 | -5,011 |
Total Other Income (Expenses) | -9,056 | -5,011 |
Loss from Continuing Operations before Income Taxes | -160,427 | -205,700 |
Provision for income tax | ||
Net loss | ($160,427) | ($205,700) |
Basic and diluted net loss per share | $0 | $0 |
Weighted average number of shares outstanding | 46,590,721 | 51,090,432 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash Flows from Operating Activities: | ||
Net loss | ($160,427) | ($205,700) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,864 | 1,494 |
Amortization of prepaid consulting services for stock issuances | 42,666 | |
Amortization of debt discount | 7,023 | 4,091 |
Changes in operating assets and liabilities: | ||
Change in accounts payable | 7,647 | -2,000 |
Change in accrued liabilities | 11,408 | 920 |
Net cash used in operating activities | -88,820 | -201,195 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | -37,479 | |
Net cash used in investing activities | -37,479 | |
Cash Flows from Financing Activities: | ||
Cash proceeds from sale of stock | 51,000 | 153,500 |
Cash payments against note payable | -6,953 | |
Net cash provided by financing activities | 44,047 | 153,500 |
Net decrease in cash and cash equivalents | -44,773 | -85,174 |
Cash and cash equivalents, beginning of the period | 63,914 | 125,450 |
Cash and cash equivalents, end of the period | 19,141 | 40,276 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | ||
Cash paid for interest | 626 | |
Supplemental disclosures of non-cash investing and financing activities: | ||
Issuance of common stock in satisfaction of liability for issuance of common stock | $30,000 |
Note_1_Nature_of_Operations_an
Note 1 - Nature of Operations and Going Concern | 3 Months Ended |
Mar. 31, 2015 | |
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 wholly-owned 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 entered into a merger agreement to acquire Electric Motors and Vehicles Company, a Delaware corporation (“EMAVC”) and changed its name to EMAV Holdings, Inc. The merger was completed on December 27, 2013 and is being 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 that will be reflected in the historical financial statements prior to the merger will be those of EMAVC and will be 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. | |
EMAVC 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 consumer vehicles and commercial electric vehicles. 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 and sell its consumer vehicles directly through Jeep dealerships; its commercials vehicles will be sold directly to users. | |
The accompanying (a) condensed consolidated balance sheet at December 31, 2014 has been derived from audited statements and (b) the condensed consolidated unaudited financial statements as of and for the periods ended March 31, 2015 and 2014, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2015. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for a fair financial statements presentation. The financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the financial statements not misleading as required by Regulation S-X, Rule 10-01. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results of operations expected for the year ending December 31, 2015. | |
The Company’s unaudited 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 $160,427 for the three months ended March 31, 2015, used net cash in operating activities of $88,820 and has an accumulated deficit of $4,970,557 as of March 31, 2015. The Company had a working capital deficit of $47,370 and total stockholders’ deficit of $40,956 as of March 31, 2015. 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 unaudited consolidated condensed 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 | 3 Months Ended |
Mar. 31, 2015 | |
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 unaudited consolidated financial statements. The unaudited consolidated financial statements and notes are the representation of the Company’s management who is responsible for their integrity and objectivity. The unaudited 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 unaudited consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary EMAVC. All intercompany balances and transactions are eliminated in consolidation. | |
Use of Estimates | |
The preparation of unaudited 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 unaudited 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 Company’s balances requiring management to make estimates and assumptions about future events include equity and debt transactions, depreciation of property and equipment, and the valuation allowance on deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. | |
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 March 31, 2015. | |
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 three months ended March 31, 2015, 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. | |
Recent Accounting Pronouncements | |
Consolidation Reporting | |
In February 2015, the FASB issued ASU 2015-02, "Consolidation: Amendments to the Consolidation Analysis" (“ASU 2015-02”). This standard update is intended to improve targeted areas of consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This ASU simplifies consolidation accounting by reducing the number of consolidation models and improves current U.S. GAAP by (1) placing more emphasis on risk of loss when determining a controlling financial interest; (2) reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity; and (3) changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or variable interest entities. The amendments in ASU 2015-02 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. The adoption of ASU 2015-02 is not expected to have an impact on the Company’s consolidated financial statements. | |
Debt Issuance Costs | |
In April 2015, the FASB issued ASU 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs". This standard update requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs will continue to be reported as interest expense. The update is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued, and the new guidance would be applied retrospectively to all prior periods presented. If the Company adopts this standard update on its effective date, management expects that approximately $31,900 will be reclassified from assets to being presented as contra-liability. |
Note_3_Property_and_Equipment
Note 3 - Property and Equipment | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Notes | |||||
Note 3 - Property and Equipment | NOTE 3 – PROPERTY AND EQUIPMENT | ||||
Property and equipment consists of: | |||||
March 31, | December 31, | ||||
2015 | 2014 | ||||
(Unaudited) | |||||
Property and equipment | $ | 43,405 | $ | 43,405 | |
Less: accumulated depreciation | (11,550) | (8,686) | |||
Property and equipment, net | $ | 31,855 | $ | 34,719 | |
Depreciation expense for the three months ended March 31, 2015 and 2014 was $2,864 and $1,494, respectively. |
Note_4_Note_Payable
Note 4 - Note Payable | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Notes | |||||
Note 4 - Note Payable | NOTE 4 – NOTES PAYABLE | ||||
31-Mar-15 | 31-Dec-14 | ||||
(Unaudited) | |||||
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 | $ | 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, 2016 (P/Note 2) | 22,196 | 29,149 | |||
$ | 95,429 | $ | 102,382 | ||
Note payable - current portion | 57,281 | 54,506 | |||
Note payable - long term portion | $ | 38,148 | $ | 47,876 | |
Discount - current portion | $ | 11,729 | $ | 15,820 | |
Discount - long term portion | $ | 12,707 | $ | 15,639 | |
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 $2,932 and $0 for amortization of debt discount related to P/Note 1 for the three months ended March 31, 2015 and 2014, respectively. The unamortized portion of debt discount was $24,436 at March 31, 2015. In addition, the Company has recorded an interest expense of $500 and $0 on P/Note 1 for the three months ended March 31, 2015 and 2014, respectively. | |||||
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. The Company is delinquent in making seven (7) monthly payments as of March 31, 2015, and the note holder has not made a demand for the past due payments. The Company has recorded interest expense of $909 and $920 on P/Note 2 for the three months ended March 31, 2015 and 2014, 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). 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 $4,091 and $4,091 related to the amortization of debt discount related to P/Note 2 for the three months ended March 31, 2015 and 2014, respectively. The net book value of the unamortized portion of the debt discount was $0 and $4,091 at March 31, 2015 and December 31, 2014, respectively. | |||||
The Company has recorded total interest expense, including amortization of debt discount, of $9,056 and $5,011 for the three months ended March 31, 2015 and 2014, respectively. The Company has recorded accrued interest of $6,459 and $4,052 on P/Note 1 and P/Note 2 as of March 31, 2015 and December 31, 2014, respectively. |
Note_5_Related_Party_Transacti
Note 5 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 5 - Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS |
The Company has engaged an entity owned by the Chief Executive Officer/director of the Company to provide business advisory, consulting, and legal services. The Company has recorded an expense of $34,500 and $21,500 for consulting services for the three months ended March 31, 2015 and 2014, respectively. There were no amounts due under this arrangement as of March 31, 2015 or December 31, 2014. | |
In 2014 the Chief Executive Officer/Director provided a short term advance of $12,500 to the Company for its working capital needs. The short term advance is non-interest bearing, unsecured and due on demand and is due and payable as of March 31, 2015 and December 31, 2014, respectively. |
Note_6_Commitments_and_Conting
Note 6 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
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 March 31, 2015 and 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_Equity_Transactions
Note 7 - Equity Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 7 - Equity Transactions | NOTE 7 - EQUITY TRANSACTIONS |
The Company’s capitalization at March 31, 2015 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 three months ended March 31, 2015, the Company sold 102,000 shares of its common stock at $0.50 per share and received total cash consideration of $51,000. All the common shares were sold to accredited investors pursuant to separate Private Placements. | |
On September 1, 2014, the Company engaged Fastnet Advisors, LLC (Fastnet) to provide corporate business advisory services to the Company. The engagement is for an initial period of six (6)-months. The Company agreed to pay 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 $18,000 for consulting services rendered for November 2014 to February 2015 as accounts payable as of March 31, 2015. In addition, on November 14, 2014, the Company agreed to issue 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 total value of the engagement was estimated at $150,000, which was recorded as prepaid expense in 2014 to be amortized over the 6-month term of the engagement. The remaining prepaid expense was $42,666 at December 31, 2014, and the Company has amortized the remaining $42,666 to consulting expense for the three months ended March 31, 2015. | |
On November 14, 2014, pursuant to a separation agreement with an executive, the Company received 875,000 shares of returned common stock, which remain issued and not outstanding and held as treasury shares as of March 31, 2015. | |
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 has recorded the offering costs of $35,000 as prepaid expense for raising capital, to be offset against the proceeds from such offering when that is completed. | |
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 March 31, 2015. | |
The Company has not established a stock option plan nor has issued any stock options through March 31, 2015. | |
As a result of all common stock issuances and cancellations, the total common shares issued at March 31, 2015 were 47,523,565 of which 46,648,565 shares were outstanding and the remaining 875,000 shares were held in treasury. | |
Preferred Stock | |
At March 31, 2015, the Company had no shares of preferred stock issued or outstanding. |
Note_8_Concentration_of_Credit
Note 8 - Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 8 - Concentration of Credit Risk | NOTE 8 - 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 March 31, 2015 and December 31, 2014, respectively. |
Note_9_Subsequent_Events
Note 9 - Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 9 - Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS |
From April 1, 2015 to May 14, 2015, the Company sold 20,000 shares of its common stock to accredited investors pursuant to a Private Placement and received a total cash consideration of $10,000. |
Note_1_Nature_of_Operations_an1
Note 1 - Nature of Operations and Going Concern: Substantial Doubt about Going Concern (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Substantial Doubt about Going Concern | The Company’s unaudited 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 $160,427 for the three months ended March 31, 2015, used net cash in operating activities of $88,820 and has an accumulated deficit of $4,970,557 as of March 31, 2015. The Company had a working capital deficit of $47,370 and total stockholders’ deficit of $40,956 as of March 31, 2015. 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 unaudited consolidated condensed 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. |
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Note 2 - Significant Accounting Policies: Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Principles of Consolidation | Principles of Consolidation |
The accompanying unaudited consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary EMAVC. All intercompany balances and transactions are eliminated in consolidation. |
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Note 2 - Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Use of Estimates | Use of Estimates |
The preparation of unaudited 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 unaudited 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 Company’s balances requiring management to make estimates and assumptions about future events include equity and debt transactions, depreciation of property and equipment, and the valuation allowance on deferred tax assets. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
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Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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. |
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Note 2 - Significant Accounting Policies: Revenue Recognition (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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 March 31, 2015. |
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Note 2 - Significant Accounting Policies: Earnings (loss) Per Common Share (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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 three months ended March 31, 2015, 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. |
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Note 2 - Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
Consolidation Reporting | |
In February 2015, the FASB issued ASU 2015-02, "Consolidation: Amendments to the Consolidation Analysis" (“ASU 2015-02”). This standard update is intended to improve targeted areas of consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This ASU simplifies consolidation accounting by reducing the number of consolidation models and improves current U.S. GAAP by (1) placing more emphasis on risk of loss when determining a controlling financial interest; (2) reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity; and (3) changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or variable interest entities. The amendments in ASU 2015-02 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. The adoption of ASU 2015-02 is not expected to have an impact on the Company’s consolidated financial statements. | |
Debt Issuance Costs | |
In April 2015, the FASB issued ASU 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs". This standard update requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs will continue to be reported as interest expense. The update is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued, and the new guidance would be applied retrospectively to all prior periods presented. If the Company adopts this standard update on its effective date, management expects that approximately $31,900 will be reclassified from assets to being presented as contra-liability. |
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Note 3 - Property and Equipment: Schedule of property and equipment (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Tables/Schedules | |||||
Schedule of property and equipment | Property and equipment consists of: | ||||
March 31, | December 31, | ||||
2015 | 2014 | ||||
(Unaudited) | |||||
Property and equipment | $ | 43,405 | $ | 43,405 | |
Less: accumulated depreciation | (11,550) | (8,686) | |||
Property and equipment, net | $ | 31,855 | $ | 34,719 |
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Note 4 - Note Payable: Schedule of note payable (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Tables/Schedules | |||||
Schedule of note payable | 31-Mar-15 | 31-Dec-14 | |||
(Unaudited) | |||||
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 | $ | 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, 2016 (P/Note 2) | 22,196 | 29,149 | |||
$ | 95,429 | $ | 102,382 | ||
Note payable - current portion | 57,281 | 54,506 | |||
Note payable - long term portion | $ | 38,148 | $ | 47,876 | |
Discount - current portion | $ | 11,729 | $ | 15,820 | |
Discount - long term portion | $ | 12,707 | $ | 15,639 |
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Note 1 - Nature of Operations and Going Concern (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Details | |
Entity Incorporation, Date of Incorporation | 14-May-87 |
Entity Incorporation, State Country Name | Florida |
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Note 1 - Nature of Operations and Going Concern: Substantial Doubt about Going Concern (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Details | |||
Net loss | $160,427 | $205,700 | |
Net cash used in operating activities | 88,820 | 201,195 | |
Accumulated deficit | 4,970,557 | 4,810,130 | |
Working Capital Deficit | 47,370 | ||
Total Stockholders' Equity (Deficit) | $40,956 | ($68,471) |
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Note 2 - Significant Accounting Policies: Earnings (loss) Per Common Share (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,500,000 | 2,500,000 |
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Note 3 - Property and Equipment: Schedule of property and equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Property, Plant and Equipment, Gross | $43,405 | $43,405 |
Property, Plant and Equipment, Other, Accumulated Depreciation | -11,550 | -8,686 |
Property and equipment, net | $31,855 | $34,719 |
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Note 3 - Property and Equipment (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Depreciation | $2,864 | $1,494 |
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Note 4 - Note Payable: Schedule of note payable (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Other Notes Payable | $95,429 | $102,382 |
Other Notes Payable, Current | 57,281 | 54,506 |
Other Notes Payable, Noncurrent | 38,148 | 47,876 |
Debt Discount - current portion | 11,729 | 15,820 |
Debt Discount - long term portion | 12,707 | 15,639 |
Notes Payable 1 | ||
Other Notes Payable | 73,233 | 73,233 |
Notes Payable 2 | ||
Other Notes Payable | $22,196 | $29,149 |
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Note 4 - Note Payable (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Jun. 18, 2014 | 23-May-13 | |
Interest Expense, Debt | $909 | $920 | |||
Common shares issued in conjunction with debt settlement | 30,000 | ||||
Debt Discount | 30,000 | ||||
Amortization of debt discount | 7,023 | 4,091 | |||
Net stock value of the unamortized portion of the debt discount | 0 | 4,091 | |||
Interest expense | 9,056 | 5,011 | |||
Accrued Liabilities, Current | 6,459 | 4,052 | |||
Common Stock | |||||
Common shares issued in conjunction with debt settlement - Shares | 100,000 | ||||
Notes Payable 1 | |||||
Original Amount of Promissory Note | 40,000 | ||||
Notes Payable 2 | |||||
Original Amount of Promissory Note | 53,000 | ||||
Amortization of debt discount | $4,091 | $4,091 |
Note_5_Related_Party_Transacti1
Note 5 - Related Party Transactions (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Details | ||
Consulting fees paid to related party | $34,500 | $21,500 |
Short term loans | $12,500 |
Note_6_Commitments_and_Conting1
Note 6 - Commitments and Contingencies (Details) (USD $) | 1 Months Ended | ||
Oct. 31, 2013 | Jul. 31, 2012 | Mar. 31, 2015 | |
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 | ||
Remaining Liability on the Settlement | |||
Accounts Payable, Current | $7,000 |
Note_7_Equity_Transactions_Det
Note 7 - Equity Transactions (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2015 | Dec. 31, 2014 | 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 | ||||||
CommonSharesSoldAt050PerShare | $51,000 | ||||||
Prepaid expenses | 35,000 | 77,666 | |||||
Treasury stock shares authorized | 875,000 | 875,000 | |||||
CommonStockIssuedToFundraisingAdvisorsForCapitalRaise | 25,000 | ||||||
Common stock shares issued | 47,523,565 | 47,421,565 | |||||
Common stock shares outstanding | 46,648,565 | 46,546,565 | |||||
Common Stock Transaction - Sept 1, 2014 | |||||||
Prepaid expenses | 42,666 | ||||||
Common Stock Transaction - Dec 1, 2014 | |||||||
Prepaid expenses | 35,000 | ||||||
Fastnet Advisors, LLC | |||||||
Accounts Payable, Current | 4,000 | 5,000 | 5,000 | 4,000 | 4,000 | 3,000 | |
Common Stock, Shares Subscribed but Unissued | 250,000 | ||||||
Accrued stock payable | 125,000 | ||||||
Professional and Contract Services Expense | $42,666 | ||||||
Common Stock | |||||||
CommonSharesSoldAt050PerShareShares | 102,000 | ||||||
CommonStockIssuedToFundraisingAdvisorsForCapitalRaiseShares | 50,000 |
Note_7_Equity_Transactions_War
Note 7 - Equity Transactions: 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_9_Subsequent_Events_Detai
Note 9 - Subsequent Events (Details) (USD $) | 1 Months Ended |
14-May-15 | |
Details | |
Shares sold in private placement | 20,000 |
Proceeds from shares sold in private placement | $10,000 |