| Note 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (A)
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. The Company has adopted a December 31 year end. (B) Condensed
Unaudited Interim Financial Statements The
accompanying unaudited interim condensed financial statements of the Company have been prepared in accordance with generally accepted
accounting principles in the United States of America and the rules and regulations of the Securities and Exchange Commission
("SEC") for interim financial reporting. Accordingly, these unaudited interim condensed financial statements do not include
all information and footnote disclosure required fort an annual set of financial statements prepared under United States generally
accepted accounting principles. In the opinion of our management, all adjustments, consisting of normal recurring adjustments,
considered necessary for a fair presentation of the financial position, results of operations and cash flows as of June 30, 2015
and for the interim periods presented herein have been reflected in these unaudited interim condensed financial statements and
the notes thereto. Interim results included herein are not necessarily indicative of the results to be expected for the fiscal
year as a whole. These unaudited interim condensed financial statements should be read in conjunction with the audited financial
statements and accompanying notes for the fiscal year ended December 31, 2014, included in its Annual Report on Form 10-K filed
April 10, 2015. (C) Principles
of Consolidation The
accompanying June 30, 2015 condensed consolidated financial statements include the accounts of Double Crown Resources, Inc. and
its wholly owned subsidiary, DDCC Marketing Group, LLC. All intercompany accounts have been eliminated upon consolidation. (D) 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. (E)
Cash and Cash Equivalent The
Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.
At June 30, 2015 and December 31, 2014, the Company had no cash equivalents. (F)
Fixed Assets Fixed
assets are recorded at cost. Major renewals and improvements are capitalized, while maintenance and repairs are expensed when
incurred. Expenditures for major additions and betterments are capitalized in amounts greater or equal to $1,000. Depreciation
of equipment is computed by the straight line method (after taking into account their respective estimated residual values) over
the assets estimated useful life three (3), five (5), or seven (7) years. Upon sale or retirement of equipment, the related cost
and accumulated depreciation are removed from the accounts and any gain or loss is reflected. (G)
Loss Per Share In
accordance with the accounting guidance now codified as FASB ASC Topic 260, "Earnings per Share" basic loss per share
is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted
loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents
and potentially dilutive securities outstanding during the period. The
computation of basic and diluted loss per share at June 30, 2015 excludes the common stock equivalents of the following potentially
dilutive securities because their inclusion would be anti-dilutive. There were no potentially dilutive debt or equity instruments
issued and outstanding during the three and six months ended June 30, 2015 and hence below are the weighted average shares for
the six months ended June 30, 2015.
June
30, 2015
Weighted
Average Shares 487,962,034
Total 487,962,034 (H)
Operating Leases The
Company leased office space in Houston, Texas which expired in March of 2015 for $8,000 per month The Company also leases space
in Henderson, Nevada on a month to month lease of $125 per month. The Company also leases a corporate apartment in Houston, Texas
on a month to month basis for a base rent of $3,100. (I) Business
Segments The
Company operates in one segment and therefore segment information is not presented. (J) Revenue
Recognition The
Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, "Revenue Recognition". In all cases,
revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service
is performed and collectability of the resulting receivable is reasonably assured. (K) Fair
Value of Financial Instruments The
Company applies the accounting guidance under Financial Accounting Standards Board ("FASB") ASC 820-10, "Fair
Value Measurements" 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
Company's financial instruments consist of cash, prepaid expenses accounts payable, accrued expenses, notes payable, disputed
debt, accrued interest, notes payable, mineral prospect obligation and deferred revenue. The carrying amount of the Company's
financial instruments approximates their fair value as of June 30, 2015 and December 31, 2014, due to the short-term nature of
these instruments. (L) Embedded
Conversion Features The
Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine
whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at
fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under
ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any
beneficial conversion features. (M) Derivative
Financial Instruments Fair
value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity
instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company
uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible
debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.
If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments
as derivative financial instruments. Once
determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease
in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair
value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. (N) Beneficial
Conversion Feature For
conventional convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion
feature" ("BCF") and related debt discount. When
the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective
debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt. (O) Debt
Issue Costs and Debt Discount The
Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These
costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life
of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. (P)
Stock-Based Compensation - Non Employees Equity
Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services The
Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance
of Sub-topic 505-50 of the FASB Accounting Standards Codification ("Sub-topic 505-50"). Pursuant
to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument
issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument
issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will
occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established
in the Company's most recent private placement memorandum ("PPM"), or weekly or monthly price observations would generally
be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread
between the bid and asked quotes and lack of consistent trading in the market. The
fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation
model. The ranges of assumptions for inputs are as follows:
· Expected
term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards
Codification the expected term of share options and similar instruments represents the period of time the options and similar
instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder's
expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data
to estimate holder's expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are
thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options
and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon
which to estimate expected term.
· Expected
volatility of the entity's shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded
or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company
to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons
for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the
average historical volatility of the comparable companies over the expected contractual life of the share options or similar
instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations
would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations
for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent
trading in the market.
· Expected
annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual
term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend
yield is based on the Company's current dividend yield as the best estimate of projected dividend yield for periods within
the expected term of the share options and similar instruments.
· Risk-free
rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the
expected term of the share options and similar instruments. Pursuant
to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee
enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments),
then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement
date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement
is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized
as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to
ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return
for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement
for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such
an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof)
of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in
which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides
guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. Pursuant
to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable
by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee
achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and
in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of
paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share
option and similar instrument that the counterparty has the right to exercise expires unexercised. Pursuant
to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable
equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received
(that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement
date and no entry should be recorded. (Q) Recent
Accounting Pronouncements The Company
has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of
any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
