Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | Crown Marketing | |
Document Type | 10-K | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 1,098,009 | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 20,056,021,800 | |
Entity Public Float | $ 3.5 | |
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 | 2,016 | |
Document Fiscal Period Focus | FY |
CROWN MARKETING AND SUBSIDIARIE
CROWN MARKETING AND SUBSIDIARIES - CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current assets | ||
Cash and cash equivalents | $ 4,669 | $ 24,276 |
Total current assets | 249,461 | 24,276 |
Total Assets | 249,461 | 24,276 |
Current liabilities | ||
Accounts payable | 4,020 | |
Accrued rent due to related parties | 120,000 | 400,000 |
Total current liabilities | 174,597 | 481,262 |
Shareholders' equity | ||
Preferred stock | 500,000 | |
Additional paid in capital | 550,000 | |
Retained earnings | (2,143,265) | (997,812) |
Total Equity | (1,093,265) | (992,370) |
LIABILITIES AND EQUITY | $ 249,461 | $ 24,276 |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures | ||
Preferred Stock, Shares Authorized | 999,999,999,999 | 999,999,999,999 |
Preferred Stock, Shares Issued | 500,000 | |
Preferred Stock, Shares Outstanding | 500,000 | |
Preferred Stock, Value, Outstanding | $ 500,000 | |
Common Stock, Shares Authorized | 999,999,999,999,000,000,000 | 999,999,999,999,000,000,000 |
Common Stock, Shares Issued | 20,056,021,800 | 19,981,021,800 |
Common Stock, Shares Outstanding | 20,056,021,800 | 19,981,021,800 |
CROWN MARKETING AND SUBSIDIARI3
CROWN MARKETING AND SUBSIDIARIES - STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Income | ||
Sales | $ 3,174,270 | $ 43,370 |
Cost of sales | 2,958,763 | 59,311 |
Gross margin | 215,507 | (15,941) |
Operating expenses | ||
Research and development expenses | 122,680 | |
Other Income(Expense) | ||
Interest expense, related party | (54,975) | |
Net loss attributable to non controlling interest | (9,942) | (15,558) |
Net loss attributable to Crown Marketing common shareholders | $ (1,140,953) | $ (644,536) |
Earnings per share | ||
Basic and diluted-actual per share | $ 0 | $ 0 |
CROWN MARKETING AND SUBSIDIARI4
CROWN MARKETING AND SUBSIDIARIES STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Preferred Stock Shares | Preferred Stock Amount | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Total Crown Marketing Deficiency | Non-Controlling Interests | Total Stockholders' Deficiency |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2014 | $ (353,276) | $ (353,276) | $ (353,276) | ||||||
Shares, Outstanding at Jun. 30, 2014 | 19,981,021,800 | ||||||||
Net loss | $ (660,094) | $ (644,536) | (644,536) | (644,536) | $ (15,558) | (660,094) | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2015 | (997,812) | (997,812) | 5,442 | 992,370 | |||||
Shares, Outstanding at Jun. 30, 2015 | 19,981,021,800 | ||||||||
Stock Issued During Period, Value, Other | $ 500,000 | 500,000 | 500,000 | ||||||
Stock Issued During Period, Shares, Other | 500,000 | ||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 525,000 | 525,000 | 525,000 | ||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 75,000,000 | ||||||||
Net loss | $ (1,150,895) | (1,140,953) | (1,140,953) | (9,942) | (1,150,895) | ||||
Stock Issued During Period, Value, New Issues | 25,000 | 25,000 | 25,000 | ||||||
Reclassification of non-controlling interest | (4,500) | (4,500) | $ 4,500 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2016 | $ 550,000 | $ (2,143,265) | $ (1,093,265) | $ (1,093,265) | |||||
Shares, Outstanding at Jun. 30, 2016 | 500,000 | 50,000 | 20,056,021,800 | (997,812) | (997,812) | (977,812) | 5,442 | (992,370) |
CROWN MARKETING AND SUBSIDIARI5
CROWN MARKETING AND SUBSIDIARIES - STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (1,150,895) | $ (660,094) |
Adjustments to reconcile net income before allocation to non-controlling interests to net cash provided by/(used in) operating activities: | ||
Fair value of shares issued for services | 525,000 | |
(Increase)decrease in interest due to related parties | 54,975 | |
(Increase)decrease in advances to suppliers | (242,760) | |
Increase(decrease) in rent payable to related parties | 220,000 | 370,000 |
Increase(decrease) in accounts payable and accrued expenses | 4,020 | |
Increase(decrease) in accounts payable and accrued expenses | 5,600 | |
Increase(decrease) in deferred rent due to shareholders | 100,770 | 220,770 |
Net cash provided by/(used in) operating activities | (485,322) | (69,324) |
Cash flows from investing activities: | ||
Net cash provided by/(used in) investing activities | 25,000 | |
Cash flows from financing activities: | ||
Capital proceeds from non-controlling interest | 21,000 | |
Proceeds from note payable - related party | 500,000 | 10,000 |
Repayment of accrued interest | (23,000) | |
Advances from related party | 34,977 | 62,600 |
Repayment of advances from related party | (71,262) | |
Net cash provided by/(used in) financing activities | 440,715 | 93,600 |
Net increase in cash and cash equivalents | (19,607) | 24,276 |
Cash and cash equivalents- beginning of period | 24,276 | |
Cash and cash equivalents- end of period | $ 4,669 | $ 24,276 |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company has incurred recurring net losses. For the year ended June 30, 2016, the Company incurred a net loss of $1,150,895 and used cash to fund operating activities of $485,322, and at June 30, 2016, had a shareholders deficit of $1,039,265. These factors create substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company's management plans to continue as a going concern revolve around its ability to achieve profitable operations, as well as raise necessary capital to pay ongoing general and administrative expenses of the Company. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company's plan. There is no assurance that the Company will be successful in raising the additional capital or in achieving profitable operations. Our cash needs for the year ended June 30, 2016 were primarily met by a note payable of $500,000 from a company owned by our majority shareholder. As of June 30, 2016, we had a cash balance of $4,669. Our majority shareholder is providing all of our working capital and will continue to do so until at least June 30, 2017. We will require approximately $1 million and up to 12 months to complete remediation and building refit prior to being able to re-lease our warehouse space to customers. |
Accounting Policies
Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Accounting Policies | Reclassifications Advances from related party reported in June 30, 2015 as cash flows from operating expenses have been reclassified to cash flows from financing activities to conform to the current period presentation. Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include accounting for potential liabilities and the assumptions made in valuing stock instruments issued for services. Actual results could differ from those estimates. Advances to Suppliers For certain vendors in which the Company agreed to sale its products on a consignment basis, the Company is required to make payments once the inventory is received, the Company records it as advances to suppliers since the title has not been transferred to the Company. Advances to suppliers were $242,760 at June 30, 2016. There were no advances to suppliers at June 30, 2015. CROWN MARKETING AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenues In the year ended June 30, 2016, we derived our revenue primarily from the sale of balance scooters and vaping equipment. The Company also markets Chinese herbal and other remedies in the Peoples Republic of China, but has not sold any of these products in China as of June 30, 2016. The Company recognizes revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue is recognized for hardware product sales upon transfer of title and risk of loss to the customer. We record reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. These estimates are based on contractual return rights, historical sales returns, analysis of credit memo data and other factors known at the time. If actual future returns and pricing adjustments differ from past experience and our estimates, adjustments to revenue reserves may be required. In the fourth quarter of fiscal 2016, the Company entered into agreements with certain of its vendors in which the Company agreed to sell the vendors products on a consignment basis. The Company accounted for the revenues on a net basis based on the guidance of as the Company acted as an agent under the agreements. The Company recognized revenue under these consignment agreements when they shipped the vendors products to their customers and recognized a 2.5% fee, per the agreements, on the date of shipment. The gross and net sales relating to the agreements during the year ended June 30, 2016 were $81,306 and $2,033, respectively. Fair Value Measurements Fair value measurements are determined using authoritative guidance issued by the FASB, with the exception of the application of the guidance to non-recurring, non-financial assets and liabilities as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1Quoted prices in active markets for identical assets or liabilities. Level 2Inputs, other than the quoted prices in active markets, are observable either directly or indirectly. Level 3Unobservable inputs based on the Company's assumptions. The Company is required to use observable market data if available without undue cost and effort. The Companys financial instruments include cash and accounts payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature. Loss per Share Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Companys diluted loss per share is the same as the basic loss per share for the years ended June 30, 2016 and 2015, as there are no potential shares outstanding that would have a dilutive effect. CROWN MARKETING AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company recorded a valuation allowance against its deferred tax assets as of June 30, 2016 and 2015. The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50 percent likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax Stock-Based Compensation The Company periodically grants stock options and warrants to employees and non-employees in non-capital raising transactions as compensation for services rendered. The Company accounts for stock option and stock warrant grants to employees based on the authoritative guidance provided by the Financial Accounting Standards Board where the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board where the value of the stock compensation is determined based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. Segment Information At June 30, 2016, the Company had one reportable operating segment. Okra Energy Inc. is primarily engaged in research and development of sustainable energy solutions. The Okra Energy subsidiary did not have any operations during the years ended June 30, 2016 and 2015. The Laboratory segment sells vaping equipment and balance scooters, along with other products, and also develops and markets Chinese herbal and other remedies in the Peoples Republic of China. In June 2016, the Company, through its new Italiano division, entered into an agreement with an individual to acquire the entire right, title and interest in and to certain U.S. trademarks and services marks. As consideration for the assignment, the Company issued 100,000,000 shares of its common stock to the individual. The Company is still in process of forming a corporation to operate this division. During the quarter ended December 31, 2015, the Company disposed of its interest in one of its segments, the Mobile segment, which distributed prepaid SIM cards and wireless phones (see Note 6). On December 15, 2015, the Board of Directors of the Company approved the sale of the Companys interest in Crown Mobile for $25,000, which approximated the Companys basis in Crown Mobile on that date. The chief operating decision-maker evaluates performance, makes operating decisions and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Companys consolidated financial statements. CROWN MARKETING AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Segment Information (Continued) Summarized financial information by segment for the year ended June 30, 2016, based on the Companys internal financial reporting system utilized by the Companys chief operating decision maker, follows: Mobile Laboratory Consolidated Sales $ 4,876 $ 3,169,394 $ 3,174,270 Cost of sales 5,543 2,953,220 2,958,763 Gross profit (loss) (667) 216,174 215,507 Rent expense-related - 590,769 590,769 Stock issued for services - 525,000 525,000 Research and development - 122,680 122,680 Selling, general and administrative 19,218 99,060 118,278 Loss from operations $ (19,885) $ (1,121,335) $ (1,141,220) For the year ended June 30, 2016, four customers individually accounted for 10% or more of total sales, combining for 51% of total sales. The top five customer during the year ended June 30, 2016 accounted for 60% of total sales. For the year ended June 30, 2015, no customers accounted for 10% or more of total sales. During the year ended June 30, 2016, the Company had foreign sales of $2,605 to one person located in the Peoples Republic of China. All other sales were domestic sales in the United States. For the year ended June 30, 2015, there were two segments. The Laboratory segment recorded rent expense (related party) of $590,769 and selling, general, and administrative expenses of $38,209. The Mobile segment recorded revenues of $43,370, cost of goods sold of $59,311 and selling, general, and administrative expenses of $4,897. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Companys financial statements and disclosures. CROWN MARKETING AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Pronouncements (continued) In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15 requires management to perform interim and annual assessments of an entitys ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entitys ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2014-15 on the Companys financial statements and disclosures. In February, 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. Early adoption is permitted. The adoption of ASU 2015-02 is not expected to have a material effect on the Companys consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory within the scope of ASU 2015-11 be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory method are not impacted by the new guidance. ASU 2015-11 applies to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure inventory within the scope of ASU 2015-11 at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for public business entities in fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2015-11 on the Companys financial statements and disclosures. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Companys financial statements and disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or is not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Note 3 - Related Party Transact
Note 3 - Related Party Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Note 3 - Related Party Transactions | NOTE 3 RELATED PARTY TRANSACTIONS Notes Payable Notes payable to related parties were as follows at June 30, 2016 and 2015: June 30, 2016 June 30, 2015 Note payable, interest at 12% per annum, secured by essentially all assets of the Company, due July 31, 2017. The lender is Temple CB LLC (Temple), a limited liability company controlled by Jay Hooper, the Companys President and majority shareholder $ 531,975 $ - Note payable to Jay Hooper, due on demand, interest at 4% per annum 10,000 10,000 541,975 10,000 Less: current portion (10,000) (10,000) Notes payable, non-current portion $ 531,975 $ - Advances As of June 30, 2016 and 2015, $34,977 and $71,262, respectively, was due to the Companys President and majority shareholder, Mr. Jay Hooper, for advances made to the Company to pay for operating expenses. The advances are non-interest bearing and are due on demand. Lease Obligation Through its subsidiary, Crown Laboratory Inc., the Company leased a warehouse in El Monte, California. The warehouse is owned by Temple CB LLC, (Temple CB), a single member limited liability company owned by the Companys President and majority shareholder. In October 2016, the Company and Temple CB agreed to terminate the lease effective as of July 1, 2016. The Company ceased using the premises prior to July 1, 2016. In the future, the Company may plan to lease and sublease the warehouse but will require approximately $1 million and up to 12 months to complete remediation and a building refit prior to being able to re-lease the warehouse building to customers. The lease commenced December 2, 2013, terminates May 31, 2020, and requires monthly lease payments of $30,000 beginning June 1, 2014. The monthly lease payment increases to $40,000 on June 1, 2015, $50,000 on June 1, 2016, $60,000 on June 1, 2017, and $70,000 on June 1, 2019. The lease includes a period of free rent from December 2, 2013 to May 31, 2014. The lease is an operating lease. The Company recognizes rent expense on a straight-line basis over the entire lease period. During the years ended June 30, 2016 and 2015, the Company recorded $590,769 of rent expense for each period. As of June 30, 2016 and June 30, 2015, the Company recorded a deferred lease obligation of $636,154 and $535,384, respectively. In August, 2015, the lease was assigned to and assumed by Crown Laboratory, Inc. As of June 30, 2016 and June 30, 2015, the Company owed $120,000 and $400,000, respectively, under this lease obligation. During the year ended June 30, 2016, the Company issued 500,000 shares of its Series A Preferred Stock to Temple CB in satisfaction of $500,000 of accrued rent (see Note 4). CROWN MARKETING AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015 NOTE 3 RELATED PARTY TRANSACTIONS (CONTINUED) Due to Related Party During the year ended June 30, 2016, the Company used contract labor services provided by Temple CB totaling $10,000. Total payments made to Temple CB for the services during the year ended June 30, 2016 were $4,400. As of June 30, 2016, a total of $5,600 was owed to Temple CB. There were no amounts owed to Temple CB for contract services during the year ended June 30, 2015. |
Note 4 - Convertible, Redeemabl
Note 4 - Convertible, Redeemable Preferred Stock | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Note 4 - Convertible, Redeemable Preferred Stock | NOTE 4 CONVERTIBLE, REDEEMABLE PREFERRED STOCK During the year ended June 30, 2016, the Companys Board of Directors authorized the creation of a series of preferred stock consisting of 1,000,000 shares designated as Series A Preferred Stock (the Series A). The Series A is entitled to a dividend of 4%, when and as declared, and is entitled to a liquidation preference of $1 per share plus unpaid dividends. The Series A is redeemable at the option of the Company at any time, in whole or in part, at a price of $1.00 per share, plus 4% per annum thereupon from the date of issuance (the Stated Value). In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the Series A shall be entitled to a preferential amount equal to the Stated Value, prior to the holders of common stock receiving any distribution. Each share of Series A is automatically converted on the Conversion Date into a number of shares of common stock of the Company at the initial conversion rate (the Conversion Rate), which shall be the Stated Value as of the date of conversion divided by the Market Price. The Market Price for purposes of this Section 5 shall be equal to the average closing sales price of the Common Stock over the 5 previous trading days. The Series A is also subject to adjustments to the Conversion Rate. If the common stock issuable on conversion of the Series A is changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above), the holders of the Series A shall, upon its conversion, be entitled to receive, in lieu of the common stock which the holders would have become entitled to receive but for such change, a number of shares of such other class or classes of stock that would have been subject to receipt by the holders if they had exercised their rights of conversion of the Series A immediately before that change. During the year ended June 30, 2016, the Company issued 500,000 shares of its Series A to Temple CB, a single member LLC owned by the Companys majority shareholder, in satisfaction of $500,000 of accrued rent (see Note 3). The Company plans to issue the remaining 500,000 authorized shares of its Series A preferred stock to Temple CB in 2017 in satisfaction of additional accrued rent. CROWN MARKETING AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015 NOTE 5 SHAREHOLDERS DEFICIT During the year ended June 30, 2016, the Company issued 75,000,000 shares of common stock to a consultant, which was valued at $525,000 based on the closing price of the Companys common stock on the date of the grant, and included in selling, general, and administrative expenses. In July 2016, the Company entered into a settlement agreement under which the consultant agreed to return the shares to the Company in exchange for a cash payment (see Note 7). During the year ended June 30, 2016, the Board of Directors of the Company approved the sale of the Companys interest in Crown Mobile for $25,000, which approximated the Companys basis in Crown Mobile on that date. |
Note 6 - Non-controlling Intere
Note 6 - Non-controlling Interest | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Note 6 - Non-controlling Interest | NOTE 6 NON-CONTROLLING INTEREST During 2015, the Company entered into a joint venture to create Crown Mobile. During the year ended June 30, 2016, the Company disposed of its interest in Crown Mobile. Crown Mobile was in the business of selling mobile phones and sim cards and generated revenues of $4,876 during the year ended June 30, 2016, respectively. The Company owned 50% of the joint venture while two other owners owned 35% and 15%, respectively. Based on the authoritative guidance of the FASB on consolidation, the Company determined it should include Crown Mobile in its consolidated financial statements as a subsidiary since the Company has a controlling financial interest and directed the operating activities of Crown Mobile. The non-controlling interest represents the minority stockholders share of 50% of the equity of Crown Mobile. On December 15, 2015, the Board of Directors of the Company approved the sale of the Companys interest in Crown Mobile for $25,000, which approximated the Companys basis in Crown Mobile on that date. The table below reflects a reconciliation of the equity attributable to non-controlling interest: For the Year Ended June 30, 2016 Beginning balance, June 30, 2015 $ 5,442 Net loss attributable to non-controlling interest (9,942) Reclassification of non-controlling interest 4,500 Ending balance, June 30, 2016 $ - |
Note 7 - Income Taxes
Note 7 - Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Note 7 - Income Taxes | NOTE 7 INCOME TAXES Deferred taxes represent the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Temporary differences result primarily from the recording of tax benefits of net operating loss carry forwards and stock-based compensation. As of June 30, 2016, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated with the deferred tax asset. Accordingly, a valuation allowance has been established for the full amount of the net deferred tax asset. The Companys effective income tax rate differs from the amount computed by applying the federal statutory income tax rate to loss before income taxes for the years ended June 30, 2016 and 2015 as follows: June 30, 2016 June 30, 2015 Income tax benefit at federal statutory rate (34.0)% (34.0)% State income tax benefit, net of federal benefit (6.0)% (6.0)% Change in valuation allowance for deferred tax assets 40.0% 40.0% Income taxes at effective income tax rate -% -% The components of deferred taxes consist of the following at June 30, 2016 and 2015: June 30, 2016 June 30, 2015 Stock based compensation $ 210,000 $ - Net operating loss carryforwards 647,306 400,000 Less: Valuation allowance (857,306) (400,000) Net deferred tax assets $ - $ - As of June 30, 2016, the Company had federal and California income tax net operating loss carryforwards of approximately $2.0 million. These net operating losses will begin to expire 20 years from the date the tax returns will be filed. Currently, no tax returns have been filed for the Company, but the Company believes no taxes will be due because of the operating losses. |
Note 8 -subsequent Events
Note 8 -subsequent Events | 12 Months Ended |
Jun. 30, 2016 | |
Notes | |
Note 8 -subsequent Events | NOTE 8 SUBSEQUENT EVENTS In July 2016, the Company and Temple CB agreed to terminate their lease agreement. |
Accounting Policies_ Revenues (
Accounting Policies: Revenues (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Policies | |
Revenues | Revenues In the year ended June 30, 2016, we derived our revenue primarily from the sale of balance scooters and vaping equipment. The Company also markets Chinese herbal and other remedies in the Peoples Republic of China, but has not sold any of these products in China as of June 30, 2016. The Company recognizes revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue is recognized for hardware product sales upon transfer of title and risk of loss to the customer. We record reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. These estimates are based on contractual return rights, historical sales returns, analysis of credit memo data and other factors known at the time. If actual future returns and pricing adjustments differ from past experience and our estimates, adjustments to revenue reserves may be required. In the fourth quarter of fiscal 2016, the Company entered into agreements with certain of its vendors in which the Company agreed to sell the vendors products on a consignment basis. The Company accounted for the revenues on a net basis based on the guidance of as the Company acted as an agent under the agreements. The Company recognized revenue under these consignment agreements when they shipped the vendors products to their customers and recognized a 2.5% fee, per the agreements, on the date of shipment. The gross and net sales relating to the agreements during the year ended June 30, 2016 were $81,306 and $2,033, respectively. |