Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 04, 2015 | Jun. 30, 2013 | |
Document And Entity Information | |||
Entity Registrant Name | Start Scientific, Inc. | ||
Entity Central Index Key | 1368761 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $275,000 | ||
Entity Common Stock, Shares Outstanding | 130,665,000 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||
Cash and cash equivalents | $452 | $8,799 |
Total Current Assets | 452 | 8,799 |
TOTAL ASSETS | 452 | 8,799 |
CURRENT LIABILITIES | ||
Accounts payable | 12,120 | 10,940 |
Accrued expenses | 652,986 | 626,656 |
Accounts payable and accrued liabilites - related parties | 604,829 | 382,600 |
Notes payable | 547,860 | 547,860 |
Notes payable - related parties | 131,830 | 98,486 |
Total Current Liabilities | 1,949,625 | 1,666,542 |
TOTAL LIABILITIES | 1,949,625 | 1,666,542 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value; 100 shares authorized, 100 and -0- issued and outstanding, respectively | 0 | 0 |
Common stock, $0.0001 par value; 500,000,000 shares authorized, 125,665,000 and 109,165,000 shares issued and outstanding, respectively | 12,567 | 10,917 |
Additional paid-in-capital | 12,619,897 | 6,106,547 |
Deficit accumulated during exploration stage | -14,003,727 | -7,197,297 |
Accumulated deficit | -577,910 | -577,910 |
Total Stockholders' Deficit | -1,949,173 | -1,657,743 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $452 | $8,799 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 100 | 100 |
Preferred stock, shares issued | 100 | 0 |
Preferred stock, shares outstanding | 100 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 125,665,000 | 109,165,000 |
Common stock, shares outstanding | 125,665,000 | 109,165,000 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | 33 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
NET REVENUES | $0 | $0 | $0 |
OPERATING EXPENSES | |||
Salaries and consulting | 6,531,667 | 1,365,188 | 12,937,594 |
Professional fees | 200,953 | 201,478 | 564,285 |
Development costs | 0 | 0 | 205,000 |
Other selling, general and administrative | 379 | 8,107 | 43,248 |
Total Operating Expenses | 6,732,999 | 1,574,773 | 13,750,127 |
LOSS FROM OPERATIONS | -6,732,999 | -1,574,773 | -13,750,127 |
OTHER INCOME (EXPENSES) | |||
Interest expense | -73,431 | -73,553 | -253,600 |
Total Other Income (Expenses) | -73,431 | -73,553 | -253,600 |
LOSS BEFORE INCOME TAXES | -6,806,430 | -1,648,326 | -14,003,727 |
INCOME TAX EXPENSE | 0 | 0 | 0 |
NET LOSS | ($6,806,430) | ($1,648,326) | ($14,003,727) |
BASIC AND DILUTED: | |||
Net loss per common share | $0.06 | $0.02 | |
Weighted average shares outstanding | 117,004,726 | 109,165,000 |
Statements_of_Stockholders_Def
Statements of Stockholders' Deficit (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Deficit Accumulated During Exploration Stage | Accumulated Deficit | Total |
Beginning balance, value at Apr. 01, 2012 | $0 | $50 | $24,950 | $0 | ($510,773) | ($485,773) |
Beginning balance, shares at Apr. 01, 2012 | 100 | 500,000 | ||||
Common stock issued for cash, shares | 1,200,000 | |||||
Common stock issued for cash, value | 120 | 299,880 | 300,000 | |||
Common stock issued for note payable, shares | 200,000 | |||||
Common stock issued for note payable, value | 20 | 49,980 | 50,000 | |||
Common stock issued for services, shares | 7,265,000 | |||||
Common stock issued for services, value | 727 | 2,985,023 | 2,985,750 | |||
Common stock issued for assets, shares | 100,000,000 | |||||
Common stock issued for assets, value | 10,000 | -10,000 | ||||
Stock options issued | 1,702,676 | 7,702,676 | ||||
Ending balance, value at Dec. 31, 2012 | 0 | 10,917 | 5,052,509 | -5,548,971 | -577,910 | -1,063,455 |
Ending balance, shares at Dec. 31, 2012 | 100 | 109,165,000 | ||||
Common stock issued for services, value | 1,054,038 | |||||
Stock options issued | 1,054,038 | 1,054,038 | ||||
Net loss | -1,648,326 | |||||
Ending balance, value at Dec. 31, 2013 | 0 | 10,917 | 6,106,547 | -5,548,971 | -577,910 | -1,657,743 |
Ending balance, shares at Dec. 31, 2013 | 100 | 109,165,000 | ||||
Common stock issued for services, shares | 16,500,000 | |||||
Common stock issued for services, value | 1,650 | 6,513,350 | 6,515,000 | |||
Net loss | -6,806,430 | -6,806,430 | ||||
Ending balance, value at Dec. 31, 2014 | $0 | $12,567 | $12,619,897 | ($14,003,727) | ($577,910) | ($1,949,173) |
Ending balance, shares at Dec. 31, 2014 | 100 | 125,665,000 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | 33 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | ($6,806,430) | ($1,648,326) | ($14,003,727) |
Adjustments to reconcile net loss to net cash used by operating activities: | |||
Stock based compensation | 6,515,000 | 1,054,038 | 12,257,464 |
Expenses paid by related party | 6,090 | 0 | 6,090 |
Debt issue costs | 0 | 0 | 57,540 |
Amortization of debt discount | 0 | 0 | 4,960 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 0 | 0 | 1,800 |
Prepaid expenses | 0 | 0 | 50,000 |
Accounts payable and accrued liabilities - related parties | 222,229 | 236,962 | 604,829 |
Accounts payable and accrued expenses | 27,510 | 364,635 | 574,658 |
Net Cash Provided (Used) by Operating Activities | -35,601 | 7,309 | -446,386 |
CASH FLOWS FROM INVESTING ACTIVITIES: | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 0 | 0 | 400,000 |
Proceeds from notes payable - related parties | 27,804 | 1,400 | 41,217 |
Payments on notes payable - related parties | -550 | 0 | -2,550 |
Net Cash Provided by Financing Activities | 27,254 | 1,400 | 438,667 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -8,347 | 8,709 | -7,719 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 8,799 | 90 | 8,171 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 452 | 8,799 | 452 |
Cash Payments For: | |||
Interest | 2,421 | 2,390 | 220,118 |
Income taxes | 0 | 0 | 0 |
Non-cash financing activity: | |||
Common stock issued for services | $6,515,000 | $1,054,038 | $12,257,464 |
NOTE_1_ORGANIZATION_AND_DESCRI
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS |
Start Scientific, Inc. (the Company) was formed in the state of Utah on February 4, 2004, with authorized common stock of 10,000,000 shares. The Company was subsequently reincorporated in the State of Delaware on February 14, 2006 with authorized common stock of 500,000,000 shares and authorized preferred stock of 100 shares. Both classes of stock have a par value of $0.0001 per share. | |
Prior to March 2012, we were a computer and technology hardware reseller to businesses and other organizations. Most of our clients were small and medium sized organizations, although we attempted to market our products and services to larger organizations. We also outsourced technology-related services to provide a full solution basket of technology products and services including hardware, software, network development and services. Our clients consisted of some retail purchasers and small to medium-sized organizations, operating mostly in North America, but we did have occasional clients in Europe. Due to our recent acquisition of oil and gas interests, our future business is expected to be based on the exploration, development, drilling, and production of various oil and gas properties. In particular, we intend to look for oil and gas opportunities in international markets. Whether in respect to the development of oil and gas interests in North America or overseas, we expect to align with industry partners in respect of the drilling and operation of these wells. Our long-term focus is to grow and develop existing oil and gas leasehold interests and acquire new interests within and without the continental United States. In addition, we intend to acquire interests in older wells that, with the application of newer technologies, may increase production and reserves. |
NOTE_2_SIGNIFICANT_ACCOUNTING_
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SIGNIFICANT ACCOUNTING POLICIES | ||||||||
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The following policies are considered to be significant: | |||||||||
a. | Accounting Method | ||||||||
The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a calendar year-end. | |||||||||
b. | Cash and Cash Equivalents | ||||||||
Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months. | |||||||||
c. | Use of Estimates in the Preparation of Financial Statements | ||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
d. | Basic and Fully Diluted Net Loss per Share of Common Stock | ||||||||
In accordance with Financial Accounting Standards No. ASC 260, “Earnings per Share,” basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. There are no common stock equivalents as of December 31, 2014 and 2013. | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net loss (numerator) | $ | (6,806,430 | ) | $ | (1,648,326 | ) | |||
Weighted average shares outstanding (denominator) | 117,004,726 | 109,165,000 | |||||||
Basic and fully diluted net loss per share amount | $ | (0.06 | ) | $ | (0.02 | ) | |||
e. | Accounts Receivable | ||||||||
Accounts receivable are recorded net of the allowance for doubtful accounts. The Company generally offers 15-day credit terms on sales to its customers and requires no collateral. The Company maintains an allowance for doubtful accounts which is determined based on a number of factors, including each customer’s financial condition, general economic trends and management judgment. The Company had $-0- in accounts receivable at December 31, 2014 and 2013. | |||||||||
f. | Inventories | ||||||||
Inventories are stated at the lower of average cost or market value. When there is evidence that the inventories value is less than original cost, the inventory is reduced to market value. The Company had $-0- in inventory at December 31, 2014 and 2013. | |||||||||
g. | Property and Equipment | ||||||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. When assets are disposed of, the cost and accumulated depreciation (net book value of the assets) are eliminated and any resultant gain or loss reflected accordingly. Betterments and improvements are capitalized over their estimated useful lives whereas repairs and maintenance expenditures on the assets are charged to expense as incurred. | |||||||||
h. | Revenue Recognition | ||||||||
Revenue is recognized upon completion of services or delivery of goods where the sales price is fixed or determinable and collectibility is reasonably assured. Advance customer payments are recorded as deferred revenue until such time as they are recognized. The Company does not offer any cash rebates. Returns or discounts, if any, are netted against gross revenues. | |||||||||
i. | Recent Accounting Pronouncements | ||||||||
We have reviewed accounting pronouncements issued during the past two years and have adopted any that are applicable to the Company. We have determined that none had a material impact on our financial position, results of operations, or cash flows for the years ended December 31, 2014 and 2013. | |||||||||
j. | Income Taxes | ||||||||
The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10. | |||||||||
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||
At December 31, 2014, the Company had net operating loss carryforwards of approximately $5,310,000 which may be offset against future taxable income through 2034. No tax benefit has been reported in the financial statements because the potential tax benefits of the net operating loss carryforwards are offset by a valuation allowance of the same amount. | |||||||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to future use. | |||||||||
Net deferred tax assets consist of the following components as of December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
NOL Carryover | $ | 2,070,000 | $ | 1,957,000 | |||||
Valuation allowance | (2,070,000 | ) | (1,957,000 | ) | |||||
Net deferred tax asset | $ | — | $ | — | |||||
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 34% to pretax income from continuing operations for the years ended December 31, 2014 and 2013 due to the following: | |||||||||
2014 | 2013 | ||||||||
Federal tax benefit at 34% | $ | (2,314,000 | ) | $ | (561,000 | ) | |||
Non-deductible stock-based compensation | 2,541,000 | 411,000 | |||||||
State tax benefit | (340,000 | ) | (82,000 | ) | |||||
Change in Valuation allowance | 113,000 | 232,000 | |||||||
$ | — | $ | — | ||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||
Year ended December 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | — | $ | — | |||||
Additions based on tax positions related to current year | — | — | |||||||
Additions for tax positions of prior years | — | — | |||||||
Reductions for tax positions of prior years | — | — | |||||||
Reductions in benefit due to income tax expense | — | — | |||||||
Ending balance | $ | — | $ | — | |||||
At December 31, 2014, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate. | |||||||||
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. | |||||||||
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of December 31, 2014 and 2013, the Company had no accrued interest or penalties related to uncertain tax positions. | |||||||||
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2014, 2013 and 2012, and since inception. | |||||||||
k. | Concentrations of Credit Risk | ||||||||
Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places cash and cash equivalents at well known quality financial institutions. Cash and cash equivalents at banks are insured by the Federal Deposit Insurance Corporation for up to $250,000. The Company did not have any cash or cash equivalents in excess of this amount at December 31, 2014 and 2013. |
NOTE_3_WORKING_INTEREST_IN_OIL
NOTE 3. WORKING INTEREST IN OIL LEASES | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 3. WORKING INTEREST IN OIL LEASES | NOTE 3. WORKING INTEREST IN OIL LEASES |
On August 7, 2013, the Company entered into an agreement to acquire two separate working interests in certain oil and gas leases in Matagorda County, Texas. The consideration granted by the Company in exchange for the Working Interests consisted of one hundred and fifty thousand ($150,000) dollars which had not been paid by the Company as of December 31, 2014. Subject to the Primary Terms of the Working Interest leases, the leases shall be for a term of five (5) years (“Primary Term”), and so long thereafter as oil or gas is produced in paying quantities from said land, or as long as continuous drilling or reworking operations are being conducted on said land. Since consideration has not been given, no significant rework has commenced and, accordingly, no working interest has been recorded. |
NOTE_4_RELATED_PARTY_TRANSACTI
NOTE 4. RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
NOTE 4. RELATED PARTY TRANSACTIONS | 2014 | 2013 | |||||||
Accounts payable | $ | 416,757 | $ | 246,757 | |||||
Accrued interest | 72,732 | 45,003 | |||||||
Misc. loans and advances | 115,340 | 90,840 | |||||||
Total | $ | 604,829 | $ | 382,600 |
NOTE_5_NOTES_PAYABLE
NOTE 5. NOTES PAYABLE | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
NOTE 5. NOTES PAYABLE | NOTE 6. NOTES PAYABLE – RELATED PARTIES | ||||||||
Notes payable – related parties consisted of the following: | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Note payable to a related individual, interest at 24% per annum, due on demand, unsecured | $ | 60,901 | $ | 60,901 | |||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 16,578 | 16,578 | |||||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 4,145 | 4,145 | |||||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 16,578 | 16,578 | |||||||
Notes payable to a company, due on demand, unsecured | 33,628 | 284 | |||||||
Total Notes Payable – Related Parties | 131,830 | 98,486 | |||||||
(131,830 | ) | (98,486 | ) | ||||||
Less: Current Portion | |||||||||
$ | — | $ | — | ||||||
Long-Term Notes Payable – Related Parties | |||||||||
Accrued interest at December 31, 2014 and 2013 was $72,732 and $45,003, respectively. |
NOTE_6_NOTES_PAYABLE_RELATED_P
NOTE 6. NOTES PAYABLE - RELATED PARTIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
NOTE 6. NOTES PAYABLE - RELATED PARTIES | NOTE 6. NOTES PAYABLE – RELATED PARTIES | ||||||||
Notes payable – related parties consisted of the following: | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Note payable to a related individual, interest at 24% per annum, due on demand, unsecured | $ | 60,901 | $ | 60,901 | |||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 16,578 | 16,578 | |||||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 4,145 | 4,145 | |||||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 16,578 | 16,578 | |||||||
Notes payable to a company, due on demand, unsecured | 33,628 | 284 | |||||||
Total Notes Payable – Related Parties | 131,830 | 98,486 | |||||||
(131,830 | ) | (98,486 | ) | ||||||
Less: Current Portion | |||||||||
$ | — | $ | — | ||||||
Long-Term Notes Payable – Related Parties | |||||||||
Accrued interest at December 31, 2014 and 2013 was $72,732 and $45,003, respectively. |
NOTE_7_EQUITY_TRANSACTIONS
NOTE 7. EQUITY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 7. EQUITY TRANSACTIONS | NOTE 7. EQUITY TRANSACTIONS |
On February 14, 2006, the Board of Directors approved the Company’s amended and restated Articles of Incorporation (Amendment). The Amendment increases the authorized shares of common stock from 10,000,000 to 100,000,000 shares. The Amendment also provides for a new class of preferred stock with 10,000,000 shares authorized. The rights and preferences of the preferred stock have yet to be determined. Both common and preferred stock have a par value of $0.001. | |
On July 6, 2011, the Company issued 100 shares of Series “A” Preferred Stock in exchange for the forgiveness of $25,000 in debt. The Series A Preferred Stock carries no dividend, distribution, liquidation, or rights of conversion into common stock, but holds 10,000,000 votes per share. | |
On February 29, 2012, in exchange for $100,000, the Company issued 200,000 shares of restricted common stock and a promissory note in the original principal amount of $100,000 (“Note”) to an investor. The Note matures on August 27, 2012 and carries a fixed interest payment at maturity of $25,000. As part of the note issuance, the Company recorded debt issue costs of $50,000 and a discount on the note of $19,048. These amounts are being amortized over the 6 month term of the note. | |
On March 1, 2012, the Company accepted the subscription of an investor for $300,000 in exchange for 1,200,000 shares of restricted common stock. | |
On April 2, 2012, the Company entered into an agreement to acquire two separate one-fourth (1/4) working interests (collectively, the “Working Interests”) in certain oil and gas leases covering the Board of Education No. 6 Well located in Yazoo County, Mississippi. The consideration granted by the Company in exchange for the Working Interests consisted of 10,000,000 shares of restricted common stock. Until the working interests could be developed and reserve estimates and feasibility studies have been undertaken, the Company’s management has determined that the value of the working interests is nominal. In addition, since the working interests were acquired with shares issued to an entity under common control, the assets have been recorded at a nominal historical cost in accordance with ASC Topic 805-50-05-4. | |
On May 16, 2012, the Company entered into an agreement to acquire all of the outstanding shares of Carpathian Energy SRL in exchange for 90,000,000 shares of restricted common stock of the Company. Carpathian is a Romanian limited liability company engaged in oil and gas exploration and development. Pursuant to the terms of the agreement, the current owners of Carpathian may rescind the Acquisition and reclaim the shares of Carpathian in the event that the Company does not invest at least $5 million toward development of Carpathian’s oil and gas assets within 60 days from the date of the agreement. In addition, since the acquisition is being acquired with shares issued to an entity under common control, the assets will be recorded at a nominal historical cost in accordance with ASC Topic 805-50-05-4. As of December 31, 2014 the Company has issued 90,000,000 shares to the current owners of Carpathian but the acquisition has not closed and the ownership of Carpathian has not yet been transferred to the Company. Thus the issued shares are considered to be a prepaid deposit with a zero value. | |
On June 12, 2012, the Company entered into a consulting agreement with JT Arco, LLC. a New Jersey-based Corporation. Pursuant to the terms of the Agreement the Company issued 500,000 restricted shares of its common stock. | |
On June 27, 2012, the Company entered into a consulting agreement with Morris Carlo White IV a Texas-based consultant. Pursuant to the terms of the Agreement the Company issued 65,000 restricted shares of its common stock. | |
On August 1, 2012, the Company issued 5,000,000 shares of common stock of the Company to an officer of the Company for services pertaining to business development. | |
On August 15, 2012, the Company amended that certain consulting agreement with JT Arco, LLC, a New Jersey-based Corporation. Pursuant to the terms of the Addendum Agreement the Company issued an additional 500,000 restricted shares of its common stock. | |
On September 25, 2012, the Company entered into a consulting agreement with TEGA, LLC, a Kentucky-based consulting company. The Company issued 600,000 shares of its common stock to TEGA, LLC, 500,000 shares of its common stock to TEGA's transferee Frances Crew, and 100,000 shares of its common stock to TEGA's transferee Teddy Colley. | |
During the year ended December 31, 2014, the Company issued 16,500,000 shares of its common stock for consulting and legal services rendered to the Company. The stock was valued at the market price on the date of issuance which totaled $6,515,000. This amount is included in salaries and consulting expenses on the statement of operations. |
NOTE_8_OPTIONS_AND_WARRANTS
NOTE 8. OPTIONS AND WARRANTS | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||
NOTE 8. OPTIONS AND WARRANTS | NOTE 8. OPTIONS AND WARRANTS | ||||||||||
The Company has adopted FASB ASC 718, “Share-Based Payments” (“ASC 718”) to account for its stock options. The Company estimates the fair value of each stock award at the grant date by using the Black-Scholes option pricing model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized only for those options expect to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations. | |||||||||||
The following table summarizes the changes in options outstanding issued to employees of the Company: | |||||||||||
Number of Shares | Weighted Average Exercise Price | ||||||||||
Outstanding as of January 1, 2013 | 10,500,000 | $ | — | ||||||||
Granted | — | — | |||||||||
Exercised | — | — | |||||||||
Cancelled | 10,500,000 | 0.65 | |||||||||
Outstanding at December 31, 2013 | — | $ | 0.65 | ||||||||
Granted | — | — | |||||||||
Exercised | — | — | |||||||||
Cancelled | — | — | |||||||||
Outstanding at December 31, 2014 | — | $ | — | ||||||||
On July 25, 2014, the board of directors cancelled all of the vested and unvested options that it had granted pursuant to the Company's 2012 Equity Incentive Plan. 10,500,000 options were granted on May 4, 2012 to certain directors, and cancelled on July 25, 2014. Each grantee of active options consented to this cancellation. As of the date of this report, the company has no outstanding options. In addition, no options have ever been exercised by any option holder of the company. The cancellation also revoked any shares that would have vested in 2014 under the same plan. However, shares vested prior to cancellation remain expensed amounting to $-0- and $1,054,038 in 2014 and 2013, respectively. |
NOTE_9_FINANCIAL_INSTRUMENTS
NOTE 9. FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Investments, All Other Investments [Abstract] | |
NOTE 9. FINANCIAL INSTRUMENTS | NOTE 9. FINANCIAL INSTRUMENTS |
On January 1, 2008, the Company adopted FASB ASC 820-10-50, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: | |
START SCIENTIFIC, INC. | |
(An Exploration Stage Company) | |
Notes to the Financial Statements | |
December 31, 2014 and 2013 | |
NOTE 9. FINANCIAL INSTRUMENTS (Continued) | |
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. | |
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. |
NOTE_10_GOING_CONCERN
NOTE 10. GOING CONCERN | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 10. GOING CONCERN | NOTE 10. GOING CONCERN |
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has a working capital deficit, negative cash flows from operations and has sustained net losses from inception which have resulted in an accumulated deficit at December 31, 2014 of $14,581,637 and has experienced periodic cash flow difficulties, all of which raise substantial doubt regarding the Company’s ability to continue as a going concern. | |
To date the Company has funded its operations through a combination of loans. The Company anticipates another net loss for the year ended December 31, 2015 and with the expected cash requirements for the coming year, there is substantial doubt as to the Company’s ability to continue operations. | |
The Company is attempting to improve these conditions by way of financial assistance through issuances of additional equity and by generating revenues through sales of products and services. |
NOTE_11_SUBSEQUENT_EVENTS
NOTE 11. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
NOTE 11. SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS |
On February 25, 2015, the Company issued a promissory note in the original principal amount of $52,500 (“Note”) to a lender. The Note matures on February 25, 2016 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at 60% of the lowest trading price for the fifteen prior days trading, including the date of conversion. | |
On February 11, 2015, the Company issued 5,000,000 shares of its common stock to a consultant of the Company for services rendered. | |
On February 10, 2015, the Company issued a promissory note in the original principal amount of $33,000 (“Note”) to a lender. The Note matures on November 12, 2015 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest trading days in the ten trading days previous to the conversion. | |
On March 6, 2015, the Company entered into a Note Purchase Agreement (the “Note Purchase”) in respect of a credit line and associated convertible debenture (“Debenture”) in the original principal amount up to $220,000. As of March 6, 2015, the Company recorded a $50,000 draw down and consideration in respect of the credit line. The Debenture matures on March 6, 2016 (the “Maturity Date”), and bears interest at the rate of 10% per annum. The Debenture, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to the lower of $.10 or 58% of the lowest trading price of the Company’s common stock during the 20 previous consecutive trading days. The Note Purchase and the Debenture contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies. | |
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no other events that would have a material impact on the financial statements. |
NOTE_12_RESTATEMENT
NOTE 12. RESTATEMENT | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Notes to Financial Statements | |||||||||||||
NOTE 12. RESTATEMENT | NOTE 12. RESTATEMENT | ||||||||||||
Subsequent to the issuance of its December 31, 2012 10-K and financial statements, the Company discovered errors in its accounting for prepaid assets and working interests in oil and gas leases, which were acquired with the Company’s common stock. Namely, the assets acquired were valued at the applicable per share value of the Company’s common stock on the day of issuance rather than using historical cost as the valuation method for the underlying assets acquired from an entity under common control. Accordingly, Prepaid Assets, Working Interests In Oil Leases, and Additional Paid-In Capital were restated to reflect these changes as follows: | |||||||||||||
As Originally Stated | As Restated | Change | |||||||||||
Prepaid Assets | $ | 22,645,000 | $ | — | $ | (22,645,000 | ) | ||||||
Working Interests in Oil Leases | $ | 2,560,000 | $ | — | $ | (2,560,000 | ) | ||||||
Total Assets | $ | 25,205,090 | $ | 90 | $ | 25,205,000 | |||||||
Development Expenses | $ | 205,000 | $ | — | $ | (205,000 | ) | ||||||
Net Loss | $ | (5,821,108 | ) | $ | (5,616,108 | ) | $ | 205,000 | |||||
Additional Paid-In Capital | $ | 30,052,509 | $ | 5,052,509 | $ | (25,000,000 | ) | ||||||
Deficit Accumulated During the Exploration Stage | $ | (5,753,971 | ) | $ | (5,547,971 | ) | $ | 205,000 | |||||
Total Stockholders. Deficit | $ | (26,268,455 | ) | $ | (1,063,455 | ) | $ | 25,205,000 |
NOTE_2_SIGNIFICANT_ACCOUNTING_1
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Accounting Method | a. | Accounting Method | |||||||
The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a calendar year-end. | |||||||||
Cash and Cash Equivalents | b. | Cash and Cash Equivalents | |||||||
Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months. | |||||||||
Use of Estimates in the Preparation of Financial Statements | c. | Use of Estimates in the Preparation of Financial Statements | |||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Basic and Fully Diluted Net Loss per Share of Common Stock | d. | Basic and Fully Diluted Net Loss per Share of Common Stock | |||||||
In accordance with Financial Accounting Standards No. ASC 260, “Earnings per Share,” basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. There are no common stock equivalents as of December 31, 2014 and 2013. | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net loss (numerator) | $ | (6,806,430 | ) | $ | (1,648,326 | ) | |||
Weighted average shares outstanding (denominator) | 117,004,726 | 109,165,000 | |||||||
Basic and fully diluted net loss per share amount | $ | (0.06 | ) | $ | (0.02 | ) | |||
Accounts Receivable | e. | Accounts Receivable | |||||||
Accounts receivable are recorded net of the allowance for doubtful accounts. The Company generally offers 15-day credit terms on sales to its customers and requires no collateral. The Company maintains an allowance for doubtful accounts which is determined based on a number of factors, including each customer’s financial condition, general economic trends and management judgment. The Company had $-0- in accounts receivable at December 31, 2014 and 2013. | |||||||||
Inventories | f. | Inventories | |||||||
Inventories are stated at the lower of average cost or market value. When there is evidence that the inventories value is less than original cost, the inventory is reduced to market value. The Company had $-0- in inventory at December 31, 2014 and 2013. | |||||||||
Property and Equipment | g. | Property and Equipment | |||||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. When assets are disposed of, the cost and accumulated depreciation (net book value of the assets) are eliminated and any resultant gain or loss reflected accordingly. Betterments and improvements are capitalized over their estimated useful lives whereas repairs and maintenance expenditures on the assets are charged to expense as incurred. | |||||||||
Revenue Recognition | h. | Revenue Recognition | |||||||
Revenue is recognized upon completion of services or delivery of goods where the sales price is fixed or determinable and collectibility is reasonably assured. Advance customer payments are recorded as deferred revenue until such time as they are recognized. The Company does not offer any cash rebates. Returns or discounts, if any, are netted against gross revenues. | |||||||||
Income Taxes | j. | Income Taxes | |||||||
The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10. | |||||||||
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||
At December 31, 2014, the Company had net operating loss carryforwards of approximately $5,310,000 which may be offset against future taxable income through 2034. No tax benefit has been reported in the financial statements because the potential tax benefits of the net operating loss carryforwards are offset by a valuation allowance of the same amount. | |||||||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to future use. | |||||||||
Net deferred tax assets consist of the following components as of December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
NOL Carryover | $ | 2,070,000 | $ | 1,957,000 | |||||
Valuation allowance | (2,070,000 | ) | (1,957,000 | ) | |||||
Net deferred tax asset | $ | — | $ | — | |||||
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 34% to pretax income from continuing operations for the years ended December 31, 2014 and 2013 due to the following: | |||||||||
2014 | 2013 | ||||||||
Federal tax benefit at 34% | $ | (2,314,000 | ) | $ | (561,000 | ) | |||
Non-deductible stock-based compensation | 2,541,000 | 411,000 | |||||||
State tax benefit | (340,000 | ) | (82,000 | ) | |||||
Change in Valuation allowance | 113,000 | 232,000 | |||||||
$ | — | $ | — | ||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||
Year ended December 31, | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | — | $ | — | |||||
Additions based on tax positions related to current year | — | — | |||||||
Additions for tax positions of prior years | — | — | |||||||
Reductions for tax positions of prior years | — | — | |||||||
Reductions in benefit due to income tax expense | — | — | |||||||
Ending balance | $ | — | $ | — | |||||
At December 31, 2014, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate. | |||||||||
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. | |||||||||
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of December 31, 2014 and 2013, the Company had no accrued interest or penalties related to uncertain tax positions. | |||||||||
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2014, 2013 and 2012, and since inception. | |||||||||
Concentrations of Credit Risk | k. | Concentrations of Credit Risk | |||||||
Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places cash and cash equivalents at well known quality financial institutions. Cash and cash equivalents at banks are insured by the Federal Deposit Insurance Corporation for up to $250,000. The Company did not have any cash or cash equivalents in excess of this amount at December 31, 2014 and 2013. |
NOTE_2_SIGNIFICANT_ACCOUNTING_2
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Earnings per share | December 31, | ||||||||
2014 | 2013 | ||||||||
Net loss (numerator) | $ | (6,806,430 | ) | $ | (1,648,326 | ) | |||
Weighted average shares outstanding (denominator) | 117,004,726 | 109,165,000 | |||||||
Basic and fully diluted net loss per share amount | $ | (0.06 | ) | $ | (0.02 | ) | |||
Components of Income Tax Benefit | 2014 | 2013 | |||||||
Deferred tax assets: | |||||||||
NOL Carryover | $ | 2,070,000 | $ | 1,957,000 | |||||
Valuation allowance | (2,070,000 | ) | (1,957,000 | ) | |||||
Net deferred tax asset | $ | — | $ | — | |||||
Income tax valuation allowance | 2014 | 2013 | |||||||
Federal tax benefit at 34% | $ | (2,314,000 | ) | $ | (561,000 | ) | |||
Non-deductible stock-based compensation | 2,541,000 | 411,000 | |||||||
State tax benefit | (340,000 | ) | (82,000 | ) | |||||
Change in Valuation allowance | 113,000 | 232,000 | |||||||
$ | — | $ | — | ||||||
Reconciliation of unrecognized tax benefits | Year ended December 31, | ||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | — | $ | — | |||||
Additions based on tax positions related to current year | — | — | |||||||
Additions for tax positions of prior years | — | — | |||||||
Reductions for tax positions of prior years | — | — | |||||||
Reductions in benefit due to income tax expense | — | — | |||||||
Ending balance | $ | — | $ | — |
NOTE_4_RELATED_PARTY_TRANSACTI1
NOTE 4. RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Accounts payable and accrued liabilities - related parties | 2014 | 2013 | |||||||
Accounts payable | $ | 416,757 | $ | 246,757 | |||||
Accrued interest | 72,732 | 45,003 | |||||||
Misc. loans and advances | 115,340 | 90,840 | |||||||
Total | $ | 604,829 | $ | 382,600 |
NOTE_5_NOTES_PAYABLE_Tables
NOTE 5. NOTES PAYABLE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Notes payable | Notes payable consisted of the following: | December 31, | December 31, | ||||||
2014 | 2013 | ||||||||
Note payable to a company, interest at 24% per annum, due on demand, unsecured | $ | 7,100 | $ | 7,100 | |||||
Notes payable to individuals, interest at 10% per annum, due on demand, unsecured | 40,760 | 40,760 | |||||||
Note payable to an individual, interest at 10% per annum, due on August 27, 2012, unsecured, in default | 100,000 | 100,000 | |||||||
Notes payable to an individual, interest at 6% per annum, due on July 13, 2013, unsecured, in default | 100,000 | 100,000 | |||||||
Notes payable to individuals, interest at 8% per annum, due on August 30, 2013 and September 9, 2013, unsecured, in default | 300,000 | 300,000 | |||||||
547,860 | 547,860 | ||||||||
Total Notes Payable | |||||||||
Less: Current Portion | (547,860 | ) | (547,860 | ) | |||||
$ | — | $ | — | ||||||
Long-Term Notes Payable | |||||||||
NOTE_6_NOTES_PAYABLE_RELATED_P1
NOTE 6. NOTES PAYABLE - RELATED PARTIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Notes payable - related parties | Notes payable – related parties consisted of the following: | December 31, | December 31, | ||||||
2014 | 2013 | ||||||||
Note payable to a related individual, interest at 24% per annum, due on demand, unsecured | $ | 60,901 | $ | 60,901 | |||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 16,578 | 16,578 | |||||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 4,145 | 4,145 | |||||||
Note payable to a related individual, interest at 10% per annum, due on demand, unsecured | 16,578 | 16,578 | |||||||
Notes payable to a company, due on demand, unsecured | 33,628 | 284 | |||||||
Total Notes Payable – Related Parties | 131,830 | 98,486 | |||||||
(131,830 | ) | (98,486 | ) | ||||||
Less: Current Portion | |||||||||
$ | — | $ | — | ||||||
Long-Term Notes Payable – Related Parties | |||||||||
NOTE_8_OPTIONS_AND_WARRANTS_Ta
NOTE 8. OPTIONS AND WARRANTS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||
Changes in options outstanding issued to employees | Number of Shares | Weighted Average Exercise Price | |||||||||
Outstanding as of January 1, 2013 | 10,500,000 | $ | — | ||||||||
Granted | — | — | |||||||||
Exercised | — | — | |||||||||
Cancelled | 10,500,000 | 0.65 | |||||||||
Outstanding at December 31, 2013 | — | $ | 0.65 | ||||||||
Granted | — | — | |||||||||
Exercised | — | — | |||||||||
Cancelled | — | — | |||||||||
Outstanding at December 31, 2014 | — | $ | — |
NOTE_12_RESTATEMENT_Tables
NOTE 12. RESTATEMENT (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Notes to Financial Statements | |||||||||||||
Restatement | As Originally Stated | As Restated | Change | ||||||||||
Prepaid Assets | $ | 22,645,000 | $ | — | $ | (22,645,000 | ) | ||||||
Working Interests in Oil Leases | $ | 2,560,000 | $ | — | $ | (2,560,000 | ) | ||||||
Total Assets | $ | 25,205,090 | $ | 90 | $ | 25,205,000 | |||||||
Development Expenses | $ | 205,000 | $ | — | $ | (205,000 | ) | ||||||
Net Loss | $ | (5,821,108 | ) | $ | (5,616,108 | ) | $ | 205,000 | |||||
Additional Paid-In Capital | $ | 30,052,509 | $ | 5,052,509 | $ | (25,000,000 | ) | ||||||
Deficit Accumulated During the Exploration Stage | $ | (5,753,971 | ) | $ | (5,547,971 | ) | $ | 205,000 | |||||
Total Stockholders. Deficit | $ | (26,268,455 | ) | $ | (1,063,455 | ) | $ | 25,205,000 |
NOTE_2_SIGNIFICANT_ACCOUNTING_3
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | ||
Net loss (numerator) | ($6,806,430) | ($1,648,326) |
Weighted average shares outstanding (denominator) | 117,004,726 | 109,165,000 |
Basic and fully diluted net loss per share amount | ($0.06) | ($0.02) |
NOTE_2_SIGNIFICANT_ACCOUNTING_4
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - Net deferred tax assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
NOL Carryover | $2,070,000 | $1,957,000 |
Valuation allowance | -2,070,000 | -1,957,000 |
Net deferred tax asset | $0 | $0 |
NOTE_2_SIGNIFICANT_ACCOUNTING_5
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - Pretax income from continuing operations (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | ||
Federal tax benefit at 34% | ($2,314,000) | ($561,000) |
Non-deductible stock-based compensation | 2,541,000 | 411,000 |
State tax benefit | -340,000 | -82,000 |
Change in Valuation allowance | 113,000 | 232,000 |
Total | $0 | $0 |
NOTE_2_SIGNIFICANT_ACCOUNTING_6
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of unrecognized tax benefits (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | ||
Beginning balance | $0 | $0 |
Additions based on tax positions related to current year | 0 | 0 |
Additions for tax positions of prior years | 0 | 0 |
Reductions for tax positions of prior years | 0 | 0 |
Reductions in benefit due to income tax expense | 0 | 0 |
Ending balance | $0 | $0 |
NOTE_4_RELATED_PARTY_TRANSACTI2
NOTE 4. RELATED PARTY TRANSACTIONS - Accounts payable and accrued liabilities - related parties (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transactions [Abstract] | ||
Accounts payable | $416,757 | $246,757 |
Accrued interest | 72,732 | 45,003 |
Misc. loans and advances | 115,340 | 90,840 |
Total | $604,829 | $382,600 |
NOTE_5_NOTES_PAYABLE_Notes_pay
NOTE 5. NOTES PAYABLE - Notes payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes payable consisted of the following: | ||
Current Portion | ($547,860) | ($547,860) |
Long-Term Notes Payable | 0 | 0 |
Notes payable | 547,860 | 547,860 |
Note payable to a company, interest at 24% per annum | ||
Notes payable consisted of the following: | ||
Current Portion | 7,100 | 7,100 |
Long-Term Notes Payable | 0 | 0 |
Notes payable | 7,100 | 7,100 |
Notes payable to individuals, interest at 10% per annum | ||
Notes payable consisted of the following: | ||
Current Portion | 40,760 | 40,760 |
Long-Term Notes Payable | 0 | 0 |
Notes payable | 40,760 | 40,760 |
Note payable to an individual, interest at 10% per annum | ||
Notes payable consisted of the following: | ||
Current Portion | 100,000 | 100,000 |
Long-Term Notes Payable | 0 | 0 |
Notes payable | 100,000 | 100,000 |
Notes payable to an individual, interest at 6% per annum | ||
Notes payable consisted of the following: | ||
Current Portion | 100,000 | 100,000 |
Long-Term Notes Payable | 0 | 0 |
Notes payable | 100,000 | 100,000 |
Notes payable to individuals, interest at 8% per annum | ||
Notes payable consisted of the following: | ||
Current Portion | 300,000 | 300,000 |
Long-Term Notes Payable | 0 | 0 |
Notes payable | $300,000 | $300,000 |
NOTE_6_NOTES_PAYABLE_RELATED_P2
NOTE 6.B NOTES PAYABLE b RELATED PARTIES - Notes payable - related parties (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes payable b related parties consisted of the following: | ||
Current Portion | ($131,830) | ($98,486) |
Long-term notes payable b related parties | 0 | |
Notes payable - related parties | 131,830 | 98,486 |
Note payable to a related individual, interest at 24% per annum | ||
Notes payable b related parties consisted of the following: | ||
Current Portion | -60,901 | -60,901 |
Long-term notes payable b related parties | 0 | 0 |
Notes payable - related parties | 60,901 | 60,901 |
Note payable to a related individual, interest at 10% per annum (1) | ||
Notes payable b related parties consisted of the following: | ||
Current Portion | -16,578 | -16,578 |
Long-term notes payable b related parties | 0 | 0 |
Notes payable - related parties | 16,578 | 16,578 |
Note payable to a related individual, interest at 10% per annum (2) | ||
Notes payable b related parties consisted of the following: | ||
Current Portion | -4,145 | -4,145 |
Long-term notes payable b related parties | 0 | 0 |
Notes payable - related parties | 4,145 | 4,145 |
Note payable to a related individual, interest at 10% per annum (3) | ||
Notes payable b related parties consisted of the following: | ||
Current Portion | -16,578 | -16,578 |
Long-term notes payable b related parties | 0 | 0 |
Notes payable - related parties | 16,578 | 16,578 |
Notes payable to a company | ||
Notes payable b related parties consisted of the following: | ||
Current Portion | -33,628 | -284 |
Long-term notes payable b related parties | 0 | 0 |
Notes payable - related parties | $33,628 | $284 |
NOTE_8_OPTIONS_AND_WARRANTS_Ch
NOTE 8. OPTIONS AND WARRANTS - Changes in options outstanding issued to employees (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | ||
Outstanding, beginning, Number of Shares | 0 | 10,500,000 |
Granted, Number of Shares | 0 | 0 |
Exercised, Number of Shares | 0 | 0 |
Cancelled, Number of Shares | 0 | 10,500,000 |
Outstanding, end, Number of Shares | 0 | 0 |
Outstanding, beginning, Weighted Average Exercise Price | $0.65 | $0 |
Granted, Weighted Average Exercise Price | $0 | $0 |
Exercised, Weighted Average Exercise Price | $0 | $0 |
Cancelled, Weighted Average Exercise Price | $0 | $0.65 |
Outstanding, end, Weighted Average Exercise Price | $0 | $0.65 |
NOTE_12_RESTATEMENT_Restatemen
NOTE 12.B RESTATEMENT - Restatement (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 01, 2012 | |
Total Assets | $452 | $8,799 | ||
Net Loss | -6,806,430 | -1,648,326 | ||
Additional Paid-In Capital | 12,619,897 | 6,106,547 | ||
Deficit Accumulated During the Exploration Stage | 14,003,727 | 7,197,297 | ||
Total Stockholders Deficit | -1,949,173 | -1,657,743 | -1,063,455 | -485,773 |
As Originally Stated | ||||
Prepaid Assets | 22,645,000 | |||
Working Interests in Oil Leases | 2,560,000 | |||
Total Assets | 25,205,090 | |||
Development Expenses | 205,000 | |||
Net Loss | -5,821,108 | |||
Additional Paid-In Capital | 30,052,509 | |||
Deficit Accumulated During the Exploration Stage | -5,753,971 | |||
Total Stockholders Deficit | -26,268,455 | |||
As Stated | ||||
Prepaid Assets | 0 | |||
Working Interests in Oil Leases | 0 | |||
Total Assets | 90 | |||
Development Expenses | 0 | |||
Net Loss | -5,616,108 | |||
Additional Paid-In Capital | 5,052,509 | |||
Deficit Accumulated During the Exploration Stage | -5,547,971 | |||
Total Stockholders Deficit | -1,063,455 | |||
Change | ||||
Prepaid Assets | -22,645,000 | |||
Working Interests in Oil Leases | -2,560,000 | |||
Total Assets | 25,205,000 | |||
Development Expenses | -205,000 | |||
Net Loss | 205,000 | |||
Additional Paid-In Capital | -25,000,000 | |||
Deficit Accumulated During the Exploration Stage | 205,000 | |||
Total Stockholders Deficit | $25,205,000 |
NOTE_1_ORGANIZATION_AND_DESCRI1
NOTE 1. B B B ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 14, 2006 | Feb. 04, 2004 |
Accounting Policies [Abstract] | ||||
Common stock, authorized | 500,000,000 | 500,000,000 | 500,000,000 | 10,000,000 |
Preferred stock, authorized | 100 | 100 | 100 | |
Common stock, par value | $0.00 | $0.00 | $0.00 | |
Preferred stock, par value | $0.00 | $0.00 | $0.00 |
NOTE_2_SIGNIFICANT_ACCOUNTING_7
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounting Policies [Abstract] | ||
Accounts receivable | $0 | $0 |
Inventory | 0 | 0 |
Net operating loss carryforwards | $5,610,000 | $5,018,500 |
NOTE_3_WORKING_INTEREST_IN_OIL1
NOTE 3. WORKING INTEREST IN OIL LEASES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Aug. 07, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Working interest in oil and gas leases | ($150,000) | |
Terms of working interest | Subject to the Primary Terms of the Working Interest leases, the leases shall be for a term of five (5) years (“Primary Term”), and so long thereafter as oil or gas is produced in paying quantities from said land, or as long as continuous drilling or reworking operations are being conducted on said land. Since consideration has not been given, no significant rework has commenced and, accordingly, no working interest has been recorded. |
NOTE_4_RELATED_PARTY_TRANSACTI3
NOTE 4. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ||
Related party debt | $27,804 | $1,400 |
Repayment of Related Party Debt | $550 | $0 |
NOTE_5_NOTES_PAYABLE_Details_N
NOTE 5. NOTES PAYABLE (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ||
Accrued Interest | $95,546 | $52,267 |
NOTE_6_NOTES_PAYABLE_RELATED_P3
NOTE 6.B NOTES PAYABLE b RELATED PARTIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accrued Interest | $95,546 | $52,267 |
Related parties | ||
Accrued Interest | $72,732 | $45,003 |
NOTE_7_EQUITY_TRANSACTIONS_Det
NOTE 7. EQUITY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | |||||||||||||||
Sep. 30, 2011 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 14, 2006 | Feb. 04, 2004 | Jul. 06, 2011 | Feb. 29, 2012 | Mar. 01, 2012 | Apr. 03, 2012 | 16-May-12 | Aug. 15, 2012 | Jun. 12, 2012 | Jun. 27, 2012 | Aug. 01, 2012 | Sep. 25, 2012 | |
Common stock, issued | 125,665,000 | 109,165,000 | ||||||||||||||
Common stock, value | $12,567 | $10,917 | ||||||||||||||
Common Stock, authorized | 500,000,000 | 500,000,000 | 500,000,000 | 10,000,000 | ||||||||||||
Preferred Stock, authorized | 100 | 100 | 100 | |||||||||||||
Common Stock Par or Stated Value Per Share | $0.00 | $0.00 | $0.00 | |||||||||||||
Preferred Stock, issued | 100 | 0 | ||||||||||||||
Amended and Restated Articles | ||||||||||||||||
Common Stock, authorized | 100,000,000 | |||||||||||||||
Preferred Stock, authorized | 10,000,000 | |||||||||||||||
Common Stock Par or Stated Value Per Share | $0.00 | |||||||||||||||
Forgiveness of debt | ||||||||||||||||
Preferred Stock, issued | 100 | |||||||||||||||
Debt Forgiveness | 25,000 | |||||||||||||||
Preferred Stock Voting Rights | The Series A Preferred Stock carries no dividend, distribution, liquidation, or rights of conversion into common stock, but holds 10,000,000 votes per share. | |||||||||||||||
Issuance of Promissory Note and Common Stock to an Investor | ||||||||||||||||
Common stock, issued | 200,000 | |||||||||||||||
Note Issued | 100,000 | |||||||||||||||
Cash Recieved | 100,000 | |||||||||||||||
Fixed Interest Payment at Maturity | 25,000 | |||||||||||||||
Debt issue costs | 50,000 | |||||||||||||||
Discount on the note | 19,048 | |||||||||||||||
Acceptance of Subscription of an Investor | ||||||||||||||||
Common stock, issued | 1,200,000 | |||||||||||||||
Investment Promised | 300,000 | |||||||||||||||
Working interests in oil and gas leases | ||||||||||||||||
Common stock, issued | 10,000,000 | |||||||||||||||
Carpathian Energy | ||||||||||||||||
Common stock, issued | 90,000,000 | |||||||||||||||
JT Arco, LLC | ||||||||||||||||
Common stock, issued | 500,000 | 500,000 | ||||||||||||||
Morris Carlo White IV | ||||||||||||||||
Common stock, issued | 65,000 | |||||||||||||||
Stock issued for services | ||||||||||||||||
Common stock, issued | 5,000,000 | |||||||||||||||
TEGA, LLC | ||||||||||||||||
Common stock, issued | 600,000 | |||||||||||||||
Stock Issued for consulting and legal services | ||||||||||||||||
Common stock, issued | 16,500,000 | |||||||||||||||
Common stock, value | $6,515,000 |
NOTE_8_OPTIONS_AND_WARRANTS_De
NOTE 8. OPTIONS AND WARRANTS (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equity [Abstract] | ||||
Options granted | 10,500,000 | |||
Options cancelled | 10,500,000 | |||
Stock compensation expense | $0 | $1,054,038 |
NOTE_10_GOING_CONCERN_Details_
NOTE 10. GOING CONCERN (Details Narrative) (USD $) | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated deficit | $14,581,637 |
NOTE_11_SUBSEQUENT_EVENTS_Deta
NOTE 11. SUBSEQUENT EVENTS (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Promissory Note Issued February 25, 2015 | |
Promissory note original principal amount | $52,500 |
Note terms | The Note matures on February 25, 2016 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at 60% of the lowest trading price for the fifteen prior days trading, including the date of conversion. |
Stock Issued February 11, 2015 | |
Common stock issued for services | 5,000,000 |
Promissory Note Issued February 10, 2015 | |
Promissory note original principal amount | 33,000 |
Note terms | The Note matures on November 12, 2015 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest trading days in the ten trading days previous to the conversion. |
Note Purchase Agreement March 6, 2015 | |
Promissory note original principal amount | $220,000 |
Note terms | As of March 6, 2015, the Company recorded a $50,000 draw down and consideration in respect of the credit line. The Debenture matures on March 6, 2016 (the “Maturity Date”), and bears interest at the rate of 10% per annum. The Debenture, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to the lower of $.10 or 58% of the lowest trading price of the Company’s common stock during the 20 previous consecutive trading days. The Note Purchase and the Debenture contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies. |