SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
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The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Investment in Unconsolidated Affiliate | Investment in Unconsolidated Affiliate |
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The Company utilizes the equity method of accounting, as prescribed by ASC Topic 323 “Investments – Equity Method and Joint Ventures”, when it is able to exercise significant management influence over the entity’s operations, which generally occurs when HPIL has an ownership interest of between 20% and 50% in an entity. The cost method of accounting is used when the Company does not exercise significant management influence, generally when HPIL has an ownership interest of less than 20%. The Company’s 32% investment in Haesler Real Estate Management SA (“HREM”) is accounted for under the equity method of accounting. As of December 31, 2014, the carrying amount of the investment is equal to the Company’s equity interest of the carrying amount of the net assets of HREM. |
Use of Estimates | Use of Estimates |
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The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from these estimates. |
Income Taxes | Income Taxes |
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The Company accounts for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes”. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements and applies to all federal or state income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. |
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As of December 31, 2014 and December 31, 2013, there were no amounts that are required to be accrued in respect to uncertain tax positions. |
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The Company’s tax returns are not currently under examination by the Internal Revenue Service (“IRS”) or state authorities. None of the Company’s tax returns have yet been filed, and once filed, will be subject to examination by the IRS for up to three years after they are filed, and up to four years for the respective states. |
Property and equipment | Property and Equipment |
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The Company’s property and equipment consists of molds and designs not yet being used in operations at December 31, 2014. Once placed into operations, the Company will depreciate these assets over their estimated useful lives, expected to range between 5 and 10 years. For the years ended December 31, 2014 and 2013, the Company has not recorded any depreciation expense related to these assets as they are not yet placed in service. |
Long-Lived Assets | Long-Lived Assets |
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The carrying value of long-lived assets is reviewed annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company considers internal and external factors relating to each asset, including cash flow, market developments, and other publicly available information. If these factors indicate that the asset will not be recoverable, the carrying value will be adjusted to the estimated fair value. |
Intangible Assets | Intangible Assets |
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The Company entered into a brand license agreement (the “Brand License Agreement”) with World Traditional Fudokan Shotokan Karate-Do Federation (the “WTFSKF”), a worldwide karate federation based in Switzerland. Pursuant to the Brand License Agreement, WTFSKF has granted to the Company an exclusive, worldwide, transferrable license (the “License”) to use certain logos, names, and marks of WTFSKF (the “Marks”) and manufacture and sell certain products (clothing, accessories and sporting goods) bearing the Marks (see Notes 3 and 8 for further discussion of the Brand License Agreement). The Company will amortize the License over the contractual life of the asset of 25 years. No amortization has been recognized as of December 31, 2014, as the Brand License Agreement does not commence until 2018. |
Net Loss per Share | Net Loss per Share |
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Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period and the number of shares of common stock issuable upon assumed exercise of preferred stock provided the result is not anti-dilutive. |
Supplemental Cash Flow Information Regarding Non-Cash Investing and Financing Activities | Supplemental Cash Flow Information Regarding Non-Cash Investing and Financing Activities |
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During the years ended December 31, 2014 and 2013, the Company had the following non-cash transactions: |
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| | 2014 | | 2013 |
Issuance of 752,000 shares of common stock for Brand License | $ | 6,805,600 | $ | - |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
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Management has reviewed and recently issued accounting pronouncements and determined that ASU 2014-10 is relevant to the reporting requirements for the Company. As a result, the Company adopted ASU 2014-10 “Development Stage Entities” (Topic 915) effective January 1, 2014. The amendments in this Accounting Standards Update no longer require statements to include the definition of a developmental stage company. In addition, there is no longer a requirement to include 1) inception-to-date information in the statements of income, cash flows, and shareholder equity, 2) label the financial statements as those of a development stage entity, 3) disclose a description of the development stage activities in which the entity is engaged, or 4) 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. |
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In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP. The standard is effective for the first interim period within annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact of the provisions of this new standard on our consolidated financial statements. None of the other recently issued accounting pronouncements are expected to significantly affect the Company. |
Revenue Recognition | Revenue Recognition |
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Revenue is recognized when persuasive evidence that an arrangement or contract exists, delivery has occurred, the service provider’s fees are fixed and determinable, and collectability is probable or certain. Revenue is recognized for services as rendered. |