Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Pocket Shot Co | |
Entity Central Index Key | 1,351,573 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,458,657 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 49,547 | $ 51,965 |
Accounts receivable | 8,708 | 1,454 |
Inventory | 81,063 | 84,635 |
Total current assets | 139,318 | 138,054 |
Fixed assets | ||
Machinery & equipment | 305,165 | 305,165 |
Accumulated depreciation | (231,801) | (224,595) |
Total Fixed assets | 73,364 | 80,570 |
TOTAL ASSETS | 212,682 | 218,624 |
Current liabilities | ||
Accounts payable | ||
Royalty payable | 3,653 | 3,276 |
Total current liabilities | 3,653 | 3,276 |
Stockholders’ equity | ||
Common stock, no par value, 6,458,657 shares issued and outstanding at March 31, 2017 and December 31, 2016 | ||
Additional paid-in capital | 583,069 | 583,069 |
Retained deficit | (374,040) | (367,721) |
Total Stockholders' equity | 209,029 | 215,348 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 212,682 | $ 218,624 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, no par value | ||
Common stock, shares issued | 6,458,657 | 6,458,657 |
Common stock, shares outstanding | 6,458,657 | 6,458,657 |
Income Statements (Unaudited)
Income Statements (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Royalty income | $ 12,754 | $ 16,260 |
Costs of sales | 3,948 | 5,695 |
Gross margin | 8,806 | 10,565 |
Operating expenses | ||
Advertising and promotion | ||
General and administrative expenses | 6,026 | 32,075 |
Sales incentives | 832 | |
Travel and entertainment | 1,893 | 6,952 |
Depreciation expense | 7,206 | 4,010 |
Total costs and expenses | 15,125 | 43,869 |
Net income (loss) | $ (6,319) | $ (33,304) |
Statements of Stockholders' Def
Statements of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Stockholders' Deficit [Member] | Total |
Balance at Dec. 31, 2013 | $ 497,500 | $ (165,818) | $ 331,682 | |
Balance, shares at Dec. 31, 2013 | 5,668,657 | |||
Net loss | (68,778) | (68,778) | ||
Balance at Dec. 31, 2014 | 497,500 | (234,596) | 262,904 | |
Balance, shares at Dec. 31, 2014 | 5,668,657 | |||
Shares issued for cash | 79,000 | 79,000 | ||
Shares issued for cash, shares | 790,000 | |||
Net loss | (54,213) | (54,213) | ||
Balance at Dec. 31, 2015 | 583,069 | (288,809) | 294,260 | |
Balance, shares at Dec. 31, 2015 | 6,458,657 | |||
Net loss | (78,912) | (78,912) | ||
Balance at Dec. 31, 2016 | 583,069 | (367,721) | 215,348 | |
Balance, shares at Dec. 31, 2016 | 6,458,657 | |||
Net loss | (6,319) | (6,319) | ||
Balance at Mar. 31, 2017 | $ 583,069 | $ (374,040) | $ 209,029 | |
Balance, shares at Mar. 31, 2017 | 6,458,657 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows provided by operating activities: | ||
Net loss | $ (6,319) | $ (33,304) |
Changes in Operating Assets and Liabilities | ||
Accounts Receivable | (7,254) | 2,660 |
Inventory | 3,572 | 536 |
Accounts payable | ||
Royalty payable | 377 | |
Depreciation | 7,206 | 4,010 |
Net cash provided (used) by operating activities | (2,418) | (26,097) |
Cash flows from investing activities: | ||
Purchases of property and equipment | ||
Net cash used by investing activities | ||
Cash flows from financing activities | ||
Issuance of Capital Stock for cash | ||
Net cash provided by financing activities | ||
Net increase (decrease) in cash | (2,418) | (26,097) |
Cash, beginning of period | 51,965 | 156,412 |
Cash end of period | $ 49,547 | $ 130,314 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS The Pocket Shot Company, formerly Pocket Shot, LLC, a Colorado limited liability company, was initially formed on April 18, 2004. Under a 351 Exchange Agreement, the members chose to contribute all of their membership interests in the LLC to The Pocket Shot Company, a Colorado corporation in exchange for shares of common stock of the corporation in accordance with the terms and provisions of the agreement. The effective date for the exchange was January 1, 2006. The Company has developed a plastic pouch for the packaging of alcohol under the trademarks Pocketshot and Pocket Shot. They collect royalty income from licensing the right to use the patent and the trademarks in connection with manufacturing, filling and packaging the pouches with alcohol and the distribution, sale and advertising of the products under the brand name. The Company’s accounting year end is December 31. Basis of Presentation These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles. Management’s Representation of Interim Financial Statements The accompanying unaudited financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements at December 31, 2016 and 2015 as presented in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2017 and December 31, 2016, the Company cash equivalents totaled $49,547 and $51,965 respectively. Accounts Receivable We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense) in the combined statements of operations. We calculate this allowance based on our history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the economic status of, our customers. As of December 31, 2015 and December 31, 2016, an allowance for estimated, uncollectible accounts was determined to be unnecessary. Inventory Inventory is reported at the lower of cost or market on the first-in, first-out (FIFO) method. Our inventory is subject to obsolescence. Accordingly, quantities on hand are periodically monitored for items no longer being sold, which are written off. All inventory is stored at the manufacturer and maintained by them. Inventory consists of pouches, display and shipping boxes and no inventory is deemed obsolete. Machinery and Equipment Machinery and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant machinery and equipment categories are as five years. A summary of machinery and equipment as of March 31, 2017 and December 31, 2016, is as follows: 2017 2016 Machinery and equipment $ 305,165 $ 305,165 Less accumulated depreciation (231,801 ) (224,595 ) $ 73,364 $ 80,570 Depreciation expense for the three months ended March 31, 2017 and 2016 was $7,206 and $4,010, respectively. Cost of Sales The costs associated with our royalty income are packaging, a royalty of $1.20 per case, and repair and maintenance costs of our filling machines. Advertising and Promotion This category includes costs of website design and maintenance and event sponsorships. General and Administrative This category includes costs of legal and accounting, telephone, office supplies, product samples, insurance, registration costs, and consulting expenses. Travel and Entertainment This category includes the costs of air travel, hotels, meals and reimbursed automotive expenses. Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Revenue Recognition We recognize revenue when the four revenue recognition criteria are met, as follows: ● Persuasive evidence of an arrangement exists ● Delivery ● The price is fixed or determinable ● Collectability is reasonably assured Refunds and returns, which are minimal, are recorded as a reduction of revenue. Payments received by customers prior to our satisfying the above criteria are recorded as unearned income in the combined balance sheets. Fair Value of Financial Instruments The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The guidance also establishes a fair value hierarchy for measurements of fair value as follows: ● Level 1 - quoted market prices in active markets for identical assets or liabilities. ● Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s financial instruments approximates their fair value as of March 31, 2017 and December 31, 2016, due to the short-term nature of these instruments. Recent Accounting Pronouncements In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the years ended December 31, 2015 and December 31, 2016. In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
Related Party Transaction
Related Party Transaction | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | NOTE 3 – RELATED PARTY TRANSACTION Consulting services are provided by shareholders. For the three months ended March 31, 2017 and 2016, fees for these services amounted to $0 and $6,000 respectively. The board of directors has approved and granted Jarrold R. Bachmann an officer and shareholder, a $1.20 per case royalty on sales of Pocket Shot effective January 1, 2006. Royalty expense for the three months ended March 31, 2017 and 2016 were $377 and $490 respectively. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 4 – STOCKHOLDERS’ DEFICIT The company has authorized and issued 6,458,657 common shares with a par value of $0.00 as of March 31, 2017 and December 31, 2016. Under a 351 Exchange Agreement effective January 1, 2006, the former members of Pocket Shot, LLC agreed to contribute all of their membership interests in the LLC to The Pocket Shot Company, a Colorado corporation, in exchange for 4,943,657 shares of common stock, no par value per share, of the corporation in accordance with the terms and provisions of the agreement. The corporation subsequently issued, in the first quarter of 2006, 675,000 shares of common stock at $0.50 per share and warrants to purchase 675,000 shares of common stock for $1 per share. The warrants have expired unexercised. On June, 22, 2009, the board of directors approved the issuance of 50,000 shares of common stock to Michael Grove in consideration of past services as the Corporation’s consulting accountant. In September, 2015, the company issued 790,000 common shares with a par value of $0.00 in exchange for $79,000. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 5 – COMMITMENTS AND CONTINGENCIES The Company has developed a plastic pouch for the packaging of alcohol under the marks Pocketshot and Pocket Shot. The Company (the Licensor) entered into an initial agreement dated August 10, 2005 with Frank-Lin Distillers, Ltd (the Licensee) to fill and package the Company’s product. The initial term of the agreement was for five years. The agreement automatically renews for succeeding terms of two years each unless either party has given a written notice of its election to terminate the agreement at least one hundred, eighty calendar days prior to the end of any initial or extended term. |
Royalty Income
Royalty Income | 3 Months Ended |
Mar. 31, 2017 | |
Royalty Income | |
Royalty Income | NOTE 6 – ROYALTY INCOME Under the terms of an existing License agreement, the company receives Royalty income in exchange for the license to manufacture, fill and distribute the Company’s product, a plastic pouch for the packaging of alcohol. The Licensee is required to pay the Licensor a royalty per case as provided in the agreement. All royalties due to the Licensor shall accrue upon the sale of the products, regardless of the time of collection by the Licensee. |
Concentration of Sales and Segm
Concentration of Sales and Segmented Disclosure | 3 Months Ended |
Mar. 31, 2017 | |
Concentration Of Sales And Segmented Disclosure | |
Concentration of Sales and Segmented Disclosure | NOTE 7 – CONCENTRATION OF SALES AND SEGMENTED DISCLOSURE For the three months ended March 31, 2017 and the year ended December 31, 2016, the company’s revenue was generated in the form of royalty income from a single license agreement. The company has operated in a single business segment, licensing their product to customers in the United States. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2017 | |
Warrants | |
Warrants | NOTE 8 – WARRANTS In August 2015, the Company offered 790,000 shares of common stock at $0.10 per share, which included 790,000 warrants (1-for-1) exercisable at $0.50 per share of common stock, expiring in August 2017, carrying a term of 2 years. A summary of warrant activity is as follows: March 31, 2017 December 31, 2016 Shares Exercise Price Shares Exercise Price Outstanding, beginning of period 6,458,657 N/A 6,458,657 N/A Warrants Issued 0 N/A 0 N/A Warrants Exercised 0 N/A 0 N/A Warrants Expired 0 N/A 0 N/A Outstanding, end of period 6,458,657 N/A 6,458,657 N/A If all the warrants are exercised, there would be 7,248,657 shares issued and outstanding, of which 4,634,657 will be registered in this offering. The shares underlying the warrants are not being registered. The fair value of the Warrants, $6,569, has been determined using the Black Scholes model with the following assumptions: stock price of $0.10 based on current sales of stock for cash, an exercise price of $.50 based on the agreement, term of 2 years, volatility of 81% based on comparable public companies, annual rate of quarterly dividends of 0.0% and a discount rate of 0 .75 which resulted in a call option value of $0.01 per warrant. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing date of these financial statements and has disclosed that there are no such events that are material to the financial statements to be disclosed. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2017 and December 31, 2016, the Company cash equivalents totaled $49,547 and $51,965 respectively. |
Accounts Receivable | Accounts Receivable We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense) in the combined statements of operations. We calculate this allowance based on our history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the economic status of, our customers. As of December 31, 2015 and December 31, 2016, an allowance for estimated, uncollectible accounts was determined to be unnecessary. |
Inventory | Inventory Inventory is reported at the lower of cost or market on the first-in, first-out (FIFO) method. Our inventory is subject to obsolescence. Accordingly, quantities on hand are periodically monitored for items no longer being sold, which are written off. All inventory is stored at the manufacturer and maintained by them. Inventory consists of pouches, display and shipping boxes and no inventory is deemed obsolete. |
Machinery and Equipment | Machinery and Equipment Machinery and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant machinery and equipment categories are as five years. A summary of machinery and equipment as of March 31, 2017 and December 31, 2016, is as follows: 2017 2016 Machinery and equipment $ 305,165 $ 305,165 Less accumulated depreciation (231,801 ) (224,595 ) $ 73,364 $ 80,570 Depreciation expense for the three months ended March 31, 2017 and 2016 was $7,206 and $4,010, respectively. |
Cost of Sales | Cost of Sales The costs associated with our royalty income are packaging, a royalty of $1.20 per case, and repair and maintenance costs of our filling machines. |
Advertising and Promotion | Advertising and Promotion This category includes costs of website design and maintenance and event sponsorships. |
General and Administrative | General and Administrative This category includes costs of legal and accounting, telephone, office supplies, product samples, insurance, registration costs, and consulting expenses. |
Travel and Entertainment | Travel and Entertainment This category includes the costs of air travel, hotels, meals and reimbursed automotive expenses. |
Net Loss Per Share | Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. |
Revenue Recognition | Revenue Recognition We recognize revenue when the four revenue recognition criteria are met, as follows: ● Persuasive evidence of an arrangement exists ● Delivery ● The price is fixed or determinable ● Collectability is reasonably assured Refunds and returns, which are minimal, are recorded as a reduction of revenue. Payments received by customers prior to our satisfying the above criteria are recorded as unearned income in the combined balance sheets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The guidance also establishes a fair value hierarchy for measurements of fair value as follows: ● Level 1 - quoted market prices in active markets for identical assets or liabilities. ● Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s financial instruments approximates their fair value as of March 31, 2017 and December 31, 2016, due to the short-term nature of these instruments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the years ended December 31, 2015 and December 31, 2016. In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives for Machinery and Equipment | A summary of machinery and equipment as of March 31, 2017 and December 31, 2016, is as follows: 2017 2016 Machinery and equipment $ 305,165 $ 305,165 Less accumulated depreciation (231,801 ) (224,595 ) $ 73,364 $ 80,570 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Warrants | |
Summary of Warrant Activity | A summary of warrant activity is as follows: March 31, 2017 December 31, 2016 Shares Exercise Price Shares Exercise Price Outstanding, beginning of period 6,458,657 N/A 6,458,657 N/A Warrants Issued 0 N/A 0 N/A Warrants Exercised 0 N/A 0 N/A Warrants Expired 0 N/A 0 N/A Outstanding, end of period 6,458,657 N/A 6,458,657 N/A |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 49,547 | $ 130,314 | $ 51,965 | $ 156,412 |
Property, plant and equipment, depreciation methods | straight-line method | |||
Estimated useful lives for machinery and equipment | 5 Years | |||
Machinery and equipment, depreciation expense | $ 7,206 | $ 4,010 | ||
Cost of royalty income packing, per case | $ 1.20 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives for Machinery and Equipment (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Machinery and equipment | $ 305,165 | $ 305,165 |
Less accumulated depreciation | (231,801) | (224,595) |
Machinery and equipment, Net | $ 73,364 | $ 80,570 |
Related Party Transaction (Deta
Related Party Transaction (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Jan. 01, 2006 | |
Consulting services fees | $ 0 | $ 6,000 | |
Royalty expense | $ 377 | $ 490 | |
Jarrold R. Bachmann [Member] | |||
Royalty per case | $ 1.20 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2015 | Aug. 31, 2015 | Jun. 22, 2009 | Mar. 31, 2006 | Jan. 01, 2006 |
Common stock, shares authorized | 6,458,657 | 6,458,657 | |||||
Common stock, par value | $ 0 | $ 0 | $ 0 | ||||
Common stock, shares issued | 6,458,657 | 6,458,657 | 790,000 | ||||
Common stock, no par value | |||||||
Warrants to purchase, per share | $ 0.50 | ||||||
Common stock, issued value | $ 79,000 | ||||||
Founding Members [Member] | |||||||
Common stock, shares issued | 4,943,657 | ||||||
Shareholders [Member] | |||||||
Common stock, par value | $ 0.50 | ||||||
Common stock, shares issued | 675,000 | ||||||
Warrants to purchase number of common stock | 675,000 | ||||||
Warrants to purchase, per share | $ 1 | ||||||
Michael Grove [Member] | |||||||
Common stock, shares issued | 50,000 |
Concentration Of Sales And Se23
Concentration Of Sales And Segmented Disclosure (Details Narrative) | 3 Months Ended |
Mar. 31, 2017Number | |
Concentration Of Sales And Segmented Disclosure | |
Number of operating segments | 1 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Aug. 31, 2015 | Mar. 31, 2017 | Dec. 31, 2016 | |
Stock issued during period, shares | 790,000 | ||
Shares issued, price per share | $ 0.10 | ||
Number of warrants issued to purchase common stock | 790,000 | ||
Warrants exercisable per share | $ 0.50 | ||
Warrant expiration term | Aug. 31, 2017 | ||
Warrant term | 2 years | ||
Warrant, issued | 7,248,657 | ||
Warrant , outstanding | 7,248,657 | ||
Number of shares registered | 4,634,657 | ||
Warrant [Member] | |||
Fair value of warrants | $ 6,569 | ||
Fair value assumptions, stock price | $ 0.10 | ||
Fair value assumptions, exercise price | $ .50 | ||
Fair value assumptions, term | 2 years | ||
Fair value assumptions, volatility | 81.00% | ||
Fair value assumptions, annual dividend rate | 0.00% | ||
Fair value assumptions, discount rate | 0.75% | ||
Fair value assumptions, call option value | $ 0.01 |
Warrants - Summary of Warrant A
Warrants - Summary of Warrant Activity (Details) - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Outstanding, beginning of period | 6,458,657 | 6,458,657 |
Warrants Issued | 0 | 0 |
Warrants Exercised | 0 | 0 |
Warrants Expired | 0 | 0 |
Outstanding, end of period | 6,458,657 | 6,458,657 |
Outstanding, beginning of period, exercise price | ||
Warrants Issued, exercise price | ||
Warrants Exercised, exercise price | ||
Warrants Expired, exercise price | ||
Outstanding, end of period, exercise price |