Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Nov. 28, 2014 | |
Document And Entity Information | ||
Entity Registrant Name | Kesselring Holding Corporation. | |
Entity Central Index Key | 1374881 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -21 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 119,180,335 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2014 |
BALANCE_SHEETS_Unaudited
BALANCE SHEETS (Unaudited) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Current assets: | ||
Cash | $2,641 | |
Escrow held by attorney | 411 | 1,109 |
Prepaid expense | 12,005 | 3,333 |
Total Assets | 15,057 | 4,442 |
Current liabilities: | ||
Accounts payable | 1,584,907 | 1,582,913 |
Accrued expenses | 390,034 | 390,034 |
Total Current Liabilities | 1,974,941 | 1,972,947 |
Long Term Liabilities: | ||
Notes payable | 271,894 | 271,894 |
Convertible notes payable to related party | 16,383 | |
Rescission liability | 20,000 | 20,000 |
Total Long Term Liabilities | 308,277 | 291,894 |
Total Liabilities | 2,283,218 | 2,264,841 |
Stockholders' Deficit: | ||
Common stock, par $0.0001, 200,000,000 shares authorized, 50,046,320 shares issued and outstanding at December 31, and September 30, 2013, respectively | 5,005 | 5,005 |
Paid in capital | 4,086,612 | 4,086,612 |
Retained deficit | -6,389,778 | -6,382,016 |
Common stock payable | 50,000 | 50,000 |
Rescission liability | -20,000 | -20,000 |
Total Stockholders' Deficit | -2,268,161 | -2,260,399 |
Total Liabilities and Stockholders' Deficit | $15,057 | $4,442 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Stockholders' Equity | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, issued shares | 50,046,320 | 50,046,320 |
Common stock, shares outstanding | 50,046,320 | 50,046,320 |
STATEMENTS_OF_OPERATIONS_Unaud
STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Expenses: | ||
Professional fees | $2,692 | $850 |
Insurance | 5,000 | |
Taxes and licenses | 70 | |
General and Administrative Expenses | 7,762 | 850 |
Net Loss Before Income Taxes | -7,762 | -850 |
Provision for income taxes | ||
Net Loss | ($7,762) | ($850) |
Basic and diluted net loss per share | $0 | $0 |
Basic and diluted weighted average common shares outstanding | 116,712,987 | 38,046,321 |
STATEMENTS_OF_CASH_FLOWS_Unaud
STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows From Operating Activities: | ||
Net loss | ($7,762) | ($850) |
Changes in operating assets and liabilities: | ||
Escrow held by attorney | 698 | 850 |
Prepaid expenses | -8,672 | |
Accounts payable and accrued expenses | 1,994 | |
Net Cash flows used by operating activities | -13,742 | |
Cash Flows From Financing Activities: | ||
Proceeds from note payable to related party | 16,383 | |
Net Cash flows from financing activities | 16,383 | |
Net Increase in Cash | 2,641 | |
Cash at the beginning of year | ||
Cash at the end of the year | $2,641 |
Business
Business | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
1. Business | Our Business: |
Kingfish Holding Corporation (the “Company”) was incorporated in the State of Delaware on April 11, 2006 as Offline Consulting, Inc. It became Kesselring Holding Corporation on June 8, 2007 and on November 25, 2014 it changed its name to Kingfish Holding Corporation. The Company was engaged in (i) restoration services, principally to commercial property owners, (ii) the manufacture and sale of cabinetry and remodeling products, principally to contractors and (iii) multifamily and commercial remodeling and building services on customer owned properties. | |
The Company discontinued operations in 2009, sold our last subsidiary in May 2010 and effected a change in management and control at the same time. As part of this transition, old management took possession of the majority of the accounting and corporate records. The Company’s last annual report Form 10-KSB for the year ended September 30, 2008 was filed with the Securities and Exchange Commission (SEC) on December 29, 2008 and the Company’s last quarterly report Form 10-Q for the period ended June 30, 2009 was filed with the SEC on August 19, 2009. | |
Since discontinued operations in 2009, the Company is reorganizing and structuring a capital campaign to pursue renewable energy initiatives. The Company's activities are subject to significant risks and uncertainties, including failing to secure additional funding to reorganize and finding a suitable candidate to participate in its renewable energy initiatives. | |
In June 2014, the FASB issued Accounting Standards Update 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”. This ASU does the following among other things: a) eliminates the requirement to present inception-to-date information on the statements of income, cash flows, and shareholders’ equity, b) eliminates the need to label the financial statements as those of a development stage entity, c) eliminates the need to disclose a description of the development stage activities in which the entity is engaged, and d) amends FASB ASC 275, Risks and Uncertainties, to clarify that information on risks and uncertainties for entities that have not commenced planned principal operations is required. The amendments in ASU No. 2014-10 related to the elimination of Topic 915 disclosures and the additional disclosure for Topic 275 are effective for public companies for annual and interim reporting periods beginning after December 15, 2014. Early adoption is permitted. The Company has evaluated this ASU and adopted beginning with the annual period ending September 30, 2012 and the interim periods within that period. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
2. Summary of Significant Accounting Policies | Basis of presentation: |
The accompanying financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, consisting solely of normal recurring adjustments, needed to fairly present the financial results for these periods. The financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance U.S. GAAP have been omitted. The accompanying financial statements should be read in conjunction with the financial statements for the fiscal years ended September 30, 2013 and 2012 and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. Operating results for the three months ended December 31, 2013 and 2012 are not necessarily indicative of the results that may be expected for the entire year. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three month periods ended December 31, 2013 and 2012, (b) the financial position at December 31, 2013, and (c) cash flows for the three month periods ended December 31, 2013 and 2012, have been made. | |
The preparation of financial statements in accordance with Accounting Principles Generally Accepted in the United States of America contemplates that the Company will continue as a going concern, for a reasonable period. As reflected in the Company’s financial statements, the Company has a retained deficit of $6,389,778 on December 31, 2013. The Company used cash of ($13,742) and $-0- in operating activities during the three months ended December 31, 2013 and 2012, respectively. The Company has a working capital deficiency of ($1,959,884) at December 31, 2013 that is insufficient in management‘s view to sustain current levels of operations for a reasonable period without additional financing. These trends and conditions continue to raise substantial doubt surrounding the Company’s ability to continue as a going concern for a reasonable period. Ultimately, the Company’s ability to continue as a going concern is dependent upon management’s ability to continue to curtail current operating expense and obtain additional financing to augment working capital requirements and support acquisition plans. There can be no assurance that management will be successful in achieving these objectives or obtain financing under terms and conditions that are suitable. The accompanying financial statements do not include any adjustments associated with these uncertainties. | |
Use of estimates: | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets, if any at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates that we have made in the preparation of our financial statements are as follows: | |
Cash: | |
Cash is maintained at a financial institution and, at times, balance may exceed federally insured limits. We have never experienced any losses related to the balance. Currently, the FDIC provides insurance coverage up to $250,000 per depositor at each financial institution and our cash balance did not exceed such coverage on December 31, 2013 | |
For purpose our statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash. | |
Escrow Held by Attorney: | |
The Company also had deposited a retainer with its legal counsel, which funds were used to pay legal fees, various negotiated legal settlements, and the cost and fees owed to the State of Delaware and the Company’s transfer agent. Therefore, the Company only had an insignificant balance with our legal counsel at September 30, 2013 and December 31, 2013. | |
Prepaid expense: | |
Prepaid expense consisted of payments to professional for services to be rendered at a later date and payments for directors and officers insurance. | |
Income Taxes: | |
Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards 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 bases. Future tax benefits for net operating loss carry forwards are recognized to the extent that realization of these benefits is considered more likely than not. 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. | |
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits for all periods presented. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefit in interest expense and penalties in operating expenses. | |
Net income (loss) per share: | |
Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of outstanding common shares during the period of computation. Diluted loss per share gives effect to potentially dilutive common shares outstanding. Potentially dilutive securities include stock options. The Company gives effect to these dilutive securities using the Treasury Stock Method. Potentially dilutive securities also include other convertible financial instruments. The Company gives effect to these dilutive securities using the If-Converted-Method. For the three months ended December 31, 2013 and 2012, -0- and 2,790,200 options and -0- common stock warrants, respectfully, are not considered in our diluted net loss per share calculations because the effect of including them would be anti-dilutive. For the three months ended December 31, 2013, 66,666,667 shares of common stock have been included in our diluted net income per share calculations. These shares were issued after December 31, 2013, but the Company was committed to issue the shares at September 30, 2013. At December 31, 2013, $16,383 of related party convertible notes can convert into potentially 12,105,665 shares of common stock. These shares have been excluded from the net loss per diluted share calculations, because the effect of including them would be anti-dilutive. | |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 3 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | |||||||||
3. Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are comprised of the followings: | ||||||||
December 31, | September 30, | ||||||||
2013 | 2013 | ||||||||
Accounts payable | $ | 1,584,907 | $ | 1,582,913 | |||||
Accrued expenses | 390,034 | 390,034 | |||||||
Accrued rent | - | - | |||||||
Accrued severance | - | - | |||||||
$ | 1,974,941 | $ | 1,972,947 | ||||||
As a result of the lack of documentation of payments or settlement agreements for reason described in Note 1, the Company was not able to definitively determine that these liabilities, with the exception of accrued rent and accrued severance, were settled with our vendors. Therefore, these liabilities will remain on the Company’s books until the statute of limitation expires which the Company estimates to be approximately 2015. | |||||||||
The Company also recorded approximately $744,000 of past due rent from a lease of office space. The lease was entered into between old management and the lessor in August 2007. The Company defaulted on the lease payments and the lessor pursued legal action against the Company. In July 2008, the parties entered into a settlement agreement and mutual release which specified specific payment terms for the Company. In August 2013, the parties entered into another settlement agreement whereby the Company paid the lessor $29,648 as full and final settlement of the claim. As a result, the Company recorded approximately $714,000 of gain from settlement of accrued expenses as a result of the settlement during the year ended September 30, 2013. | |||||||||
Accrued severance represented severance pay owed to a former employee. In accordance with the employment agreement, the Company owed this individual $82,000 of severance pay at the time of termination. During the year ended September 30, 2013, the Company entered into a settlement agreement with this individual for $13,500. The Company recorded $68,500 of gain from settlement of accrued expenses as a result of this settlement during the year ended September 30, 2013. |
Notes_Payable
Notes Payable | 3 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | |||||||||
4. Notes Payable | Notes payable consisted of the following at December 31 and September 30, 2013: | ||||||||
12/31/13 | 9/30/13 | ||||||||
4.9% Note payable due August 2010 | $ | 13,246 | $ | 13,246 | |||||
Auto Loan | 11,189 | 11,189 | |||||||
Prime Plus 4.5%, 1,000,000 bank credit facility (a) | 180,141 | 180,141 | |||||||
Loan on equipment | 67,318 | 67,318 | |||||||
$ | 271,894 | $ | 271,894 | ||||||
(a) On May 14, 2008, the Company entered into an agreement with a financial institution to provide up to $1,000,000 in secured credit, subject to certain limitations. This facility replaced a previous facility with another bank that had a limit of $300,000. Under this new facility, the Company is permitted to draw on an advance of up to 80% of certain eligible accounts receivable arising from our manufactured products segment. | |||||||||
The interest rate is prime plus 4.5%. The line is secured by the accounts receivable, inventory, and the unencumbered fixed assets of that segment. As part of the transaction, the lender was granted 150,000 shares of common stock having a fair market value of $15,000. | |||||||||
The above notes were entered into with various financial institutions when the Company was were an operating company. However, due to the lack of documentation of payments or settlement agreements for reason described in Note 1, the Company was not able to definitively determine that these notes were settled even though it appeared that the financial institutions repossessed the underlying collaterals. Therefore, these notes will remain on our books until the statute of limitation expires which we estimate to be between 2015 and 2017. |
Convertible_Notes_Payable_to_R
Convertible Notes Payable to Related Party | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
5. Convertible Notes Payable to Related Party | On February 20, 2013, the Company entered into a convertible note with a director for $5,000. The note bears interest rate at 3% per annum and all unpaid principle and interest were due on demand by the director but no earlier than June 15, 2013. The outstanding principle balance of the note is convertible into the Company’s shares of common stock at the conversion price which is the average of the mean of the bid and ask prices for the ninety consecutive full trading days in which the shares were traded ending at the close of trading on the fifth business day preceding the conversion date. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, to determine the fair value of the conversion option. At the issuance date, the Company concluded that the derivative liability and the debt discount were not material to the financial statements. |
On February 20, 2013, the Company entered into a convertible note with a director for $30,000. The note bears interest rate at 3% per annum and all unpaid principle and interest were due on demand by the director but no earlier than June 15, 2013. The outstanding principle balance of the note is convertible into the Company’s shares of common stock at the conversion price which is the average of the mean of the bid and ask prices for the ninety consecutive full trading days in which the shares were traded ending at the close of trading on the fifth business day preceding the conversion date. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, to determine the fair value of the conversion option. At the issuance date, the Company concluded that the derivative liability and the debt discount were not material to the financial statements. | |
On July 2, 2013, the director elected to convert the above two notes into the Company’s common stock. The conversion price was determined to be $0.0029, resulting in the issuance of 11,999,999 shares of common stock to the director. | |
On August 22, 2013, the Company entered into a convertible note with a director for $50,000. The note bears interest rate at 4% per annum and all unpaid principle and interest were due on demand by the director but no earlier than August 30, 2013. The outstanding principle balance of the note is convertible into the Company’s shares of common stock at the conversion price which is the average of the closing prices for the ninety consecutive full trading days in which the shares were traded ending at the close of trading on the fifth business day preceding the conversion date. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, to determine the fair value of the conversion option. At the issuance date, the Company concluded that the derivative liability and the debt discount were not material to the financial statements. | |
On August 31, 2013, the director elected to convert the above note into the Company’s common stock. The conversion price was determined to be $0.00075, resulting in the conversion into 66,666,667 shares of common stock to the director. These shares were issued to the director subsequent to December 31, 2013 therefore the Company recorded a common stock payable for $50,000 at December 31, and September 30, 2013. | |
On October 21, 2013, the Company entered into a convertible note with a director for $10,000. The note bears interest rate at 3.5% per annum and all unpaid principle and interest were due on demand by the director but no earlier than June 1, 2015 or 30 calendar days after the recommencement of public company status as defined in the note agreement. The outstanding principle balance of the note is convertible into the Company’s shares of common stock at the conversion price which is the average of the mean of the bid and ask prices for the ninety consecutive full trading days in which the shares were traded ending at the close of trading on the fifth business day preceding the conversion date. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, to determine the fair value of the conversion option. At the issuance date, the Company concluded that the derivative liability and the debt discount were not material to the financial statements. | |
On November 13, 2013, the Company entered into a convertible note with a director for $10,000. The note bears interest rate at 3.5% per annum and all unpaid principle and interest were due on demand by the director but no earlier than June 1, 2015 or 30 calendar days after the recommencement of public company status as defined in the note agreement. The outstanding principle balance of the note is convertible into the Company’s shares of common stock at the conversion price which is the average of the mean of the bid and ask prices for the ninety consecutive full trading days in which the shares were traded ending at the close of trading on the fifth business day preceding the conversion date. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, to determine the fair value of the conversion option. At the issuance date, the Company concluded that the derivative liability and the debt discount were not material to the financial statements. |
Stockholders_Deficit
Stockholders' Deficit | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
6. Stockholders' Deficit | Stock options - On the Company’s annual report Form 10-KSB for the fiscal year ended September 30, 2008, the Company had 2,790,200 options outstanding with a weighted average exercise price of $0.13 and an aggregate weighted average remaining term of 4.48 years. Of these options, 2,450,200 shares were exercisable. These options had no intrinsic value on the date of issuance and on December 31 and September 30, 2013. There have been no options granted or exercised since September 30, 2008 and all outstanding options expired prior to September 30, 2013. |
Warrants – On the Company’s annual report Form 10-KSB for the fiscal year ended September 30, 2008, the Company had warrants outstanding to purchase 10,297,671 shares of our common stock. The outstanding warrants range in exercise prices from $0.49 to $0.54 and had a weighted average remaining life of 2.57 years. There have been no warrants granted or exercised since September 30, 2008 and all outstanding warrants expired prior to September 30, 2013. | |
All compensation expense related to the above options and warrants have been previously recognized. |
Rescission_Liability
Rescission Liability | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
7. Rescission Liability | On November 20, 2009, the Company issued 2,000,000 shares of its common stock to pay for services valued at $20,000. The issuance of these shares was declared invalid by the court since they were issued by prior management who did not have the authority to do so since they were validly removed on November 16, 2009. These shares remained outstanding at December 31, 2013 and will be returned to the Company’s transfer agent upon locating the holder of these shares. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncement | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
8. Recent Accounting Pronouncement | In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our financial statements. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | |
9. Subsequent Events | After December 31, 2013, the Company entered into various convertible notes with a director totaling $70,000. The notes bear interest rates at 3.5% per annum and all unpaid principle and interest were due on demand by the director but no earlier than June 1, 2015 or 30 calendar days after the recommencement of public company status as defined in the note agreement. The outstanding principle balance of the note is convertible into the Company’s shares of common stock at the conversion price which is the average of the mean of the bid and ask prices for the ninety consecutive full trading days in which the shares were traded ending at the close of trading on the fifth business day preceding the conversion date. As a result of the variable feature associated with the conversion option, pursuant to ASC Topic 815, the Company bifurcated the conversion option, to determine the fair value of the conversion option. At the issuance date, the Company concluded that the derivative liability and the debt discount were not material to the financial statements. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
Summary Of Significant Accounting Policies Policies | |
Basis of presentation | The accompanying financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, consisting solely of normal recurring adjustments, needed to fairly present the financial results for these periods. The financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance U.S. GAAP have been omitted. The accompanying financial statements should be read in conjunction with the financial statements for the fiscal years ended September 30, 2013 and 2012 and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. Operating results for the three months ended December 31, 2013 and 2012 are not necessarily indicative of the results that may be expected for the entire year. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three month periods ended December 31, 2013 and 2012, (b) the financial position at December 31, 2013, and (c) cash flows for the three month periods ended December 31, 2013 and 2012, have been made. |
The preparation of financial statements in accordance with Accounting Principles Generally Accepted in the United States of America contemplates that the Company will continue as a going concern, for a reasonable period. As reflected in the Company’s financial statements, the Company has a retained deficit of $6,389,778 on December 31, 2013. The Company used cash of ($13,742) and $-0- in operating activities during the three months ended December 31, 2013 and 2012, respectively. The Company has a working capital deficiency of ($1,959,884) at December 31, 2013 that is insufficient in management‘s view to sustain current levels of operations for a reasonable period without additional financing. These trends and conditions continue to raise substantial doubt surrounding the Company’s ability to continue as a going concern for a reasonable period. Ultimately, the Company’s ability to continue as a going concern is dependent upon management’s ability to continue to curtail current operating expense and obtain additional financing to augment working capital requirements and support acquisition plans. There can be no assurance that management will be successful in achieving these objectives or obtain financing under terms and conditions that are suitable. The accompanying financial statements do not include any adjustments associated with these uncertainties. | |
Use of estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets, if any at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates that we have made in the preparation of our financial statements are as follows: |
Cash | Cash is maintained at a financial institution and, at times, balance may exceed federally insured limits. We have never experienced any losses related to the balance. Currently, the FDIC provides insurance coverage up to $250,000 per depositor at each financial institution and our cash balance did not exceed such coverage on December 31, 2013 |
For purpose our statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash. | |
Escrow held by Attorney | The Company also had deposited a retainer with its legal counsel, which funds were used to pay legal fees, various negotiated legal settlements, and the cost and fees owed to the State of Delaware and the Company’s transfer agent. Therefore, the Company only had an insignificant balance with our legal counsel at September 30, 2013 and December 31, 2013. |
Prepaid expense | Prepaid expense consisted of payments to professional for services to be rendered at a later date and payments for directors and officers insurance. |
Income Taxes | Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards 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 bases. Future tax benefits for net operating loss carry forwards are recognized to the extent that realization of these benefits is considered more likely than not. 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. |
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits for all periods presented. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefit in interest expense and penalties in operating expenses. | |
Net income (loss) per share | Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of outstanding common shares during the period of computation. Diluted loss per share gives effect to potentially dilutive common shares outstanding. Potentially dilutive securities include stock options. The Company gives effect to these dilutive securities using the Treasury Stock Method. Potentially dilutive securities also include other convertible financial instruments. The Company gives effect to these dilutive securities using the If-Converted-Method. For the three months ended December 31, 2013 and 2012, -0- and 2,790,200 options and -0- common stock warrants, respectfully, are not considered in our diluted net loss per share calculations because the effect of including them would be anti-dilutive. For the three months ended December 31, 2013, 66,666,667 shares of common stock have been included in our diluted net income per share calculations. These shares were issued after December 31, 2013, but the Company was committed to issue the shares at September 30, 2013. At December 31, 2013, $16,383 of related party convertible notes can convert into potentially 12,105,665 shares of common stock. These shares have been excluded from the net loss per diluted share calculations, because the effect of including them would be anti-dilutive. |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounts Payable And Accrued Expenses Tables | |||||||||
Accounts payable and accrued expenses | Accounts payable and accrued expenses are comprised of the followings: | ||||||||
December 31, | September 30, | ||||||||
2013 | 2013 | ||||||||
Accounts payable | $ | 1,584,907 | $ | 1,582,913 | |||||
Accrued expenses | 390,034 | 390,034 | |||||||
Accrued rent | - | - | |||||||
Accrued severance | - | - | |||||||
$ | 1,974,941 | $ | 1,972,947 |
Notes_Payable_Tables
Notes Payable (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes Payable Tables | |||||||||
Notes payable | Notes payable consisted of the following at December 31 and September 30, 2013: | ||||||||
12/31/13 | 9/30/13 | ||||||||
4.9% Note payable due August 2010 | $ | 13,246 | $ | 13,246 | |||||
Auto Loan | 11,189 | 11,189 | |||||||
Prime Plus 4.5%, 1,000,000 bank credit facility (a) | 180,141 | 180,141 | |||||||
Loan on equipment | 67,318 | 67,318 | |||||||
$ | 271,894 | $ | 271,894 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
Summary Of Significant Accounting Policies Details Narrative | |||
Retained deficit | $6,389,778 | $6,382,016 | |
Cash used in operating activities | -13,742 | ||
Working capital deficiency | -1,959,884 | ||
Common stock options | 0 | 2,790,200 | |
Common stock warrants | 0 | 0 | |
Common stock basic and diluted | 66,666,667 | ||
Insurance coverage | 250,000 | ||
Convertible notes payable related party | $16,383 | ||
Potentially common stock shares | 12,105,665 |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Accounts Payable And Accrued Expenses Details | ||
Accounts payable | $1,584,907 | $1,582,913 |
Accrued expenses | 390,034 | 390,034 |
Accrued rent | ||
Accrued severance | ||
Total Accounts payable | $1,974,941 | $1,972,947 |
Accounts_Payable_and_Accrued_E3
Accounts Payable and Accrued Expenses (Details Narrative) (USD $) | 12 Months Ended |
Sep. 30, 2013 | |
Accounts Payable And Accrued Expenses Details Narrative | |
Gain from settlement of accrued expenses | $68,500 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | ||
Notes Payable Details | ||||
4.9% Note payable due August 2010 | $13,246 | $13,246 | ||
Auto Loan | 11,189 | 11,189 | ||
Prime Plus 4.5%, 1,000,000 bank credit facility (a) | 180,141 | [1] | 180,141 | [1] |
Loan on equipment | 67,318 | 67,318 | ||
Total notes payable | $271,894 | $271,894 | ||
[1] | (a) On May 14, 2008, the Company entered into an agreement with a financial institution to provide up to $1,000,000 in secured credit, subject to certain limitations. This facility replaced a previous facility with another bank that had a limit of $300,000. Under this new facility, the Company is permitted to draw on an advance of up to 80% of certain eligible accounts receivable arising from our manufactured products segment. The interest rate is prime plus 4.5%. The line is secured by the accounts receivable, inventory, and the unencumbered fixed assets of that segment. As part of the transaction, the lender was granted 150,000 shares of common stock having a fair market value of $15,000. |
Convertible_Notes_Payable_to_R1
Convertible Notes Payable to Related Party (Details Narrative) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Convertible Notes Payable To Related Party Details Narrative | ||
Common stock payable | $50,000 | $50,000 |