Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Jan. 21, 2015 | Mar. 31, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | PACIFIC OIL Co | ||
Entity Central Index Key | 1377167 | ||
Document Type | 10-K | ||
Document Period End Date | 30-Sep-14 | ||
Amendment Flag | TRUE | ||
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? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $7,026,475 | ||
Entity Common Stock, Shares Outstanding | 60,080,733 | ||
Amendment Description | On January 13, 2014, the Company filed its annual report on Form 10K for the year ended September 30, 2014 with the United States Securities and Exchange Commission. Due to a miscommunication, the filing was completed without the consent of the CompanyÂ’s | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2013 |
Balance_Sheets
Balance Sheets (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
CURRENT ASSETS | ||
Cash | $87 | $820 |
Total Current Assets | 87 | 820 |
TOTAL ASSETS | 87 | 820 |
CURRENT LIABILITIES | ||
Accounts payable | 1,702 | 17,265 |
Advances payable - related party | 66,670 | 43,255 |
Note payable - related party | 1,174 | |
Convertible note payable - related party, net of discount of $0 and $57,618, respectively | 20,206 | |
Derivative liability | 173,856 | |
Total Current Liabilities | 69,546 | 254,582 |
Total Liabilities | 69,546 | 254,582 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock: $0.001 par value; 5,000,000 shares authorized, -0- and -0- shares issued and outstanding, respectively | ||
Common stock: $0.001 par value; 70,000,000 shares authorized, 60,080,733 and 57,490 shares issued and outstanding, respectively | 60,080 | 57 |
Additional paid-in capital | 600,588 | 130,751 |
Accumulated Deficit | -730,127 | -384,570 |
Total Stockholders' Deficit | -69,459 | -253,762 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $87 | $820 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred Stock Par Value | $0.00 | $0.00 |
Preferred Stock Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock Shares Issued | 0 | 0 |
Preferred Stock Shares Outstanding | 0 | 0 |
Common Stock Par Value | $0.00 | $0.00 |
Common Stock Shares Authorized | 70,000,000 | 70,000,000 |
Common Stock Shares Issued | 60,080,333 | 57,490 |
Common Stock Shares Outstanding | 60,080,733 | 57,490 |
Notes Payable, Discount | $0 | $57,618 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ||
REVENUES | ||
OPERATING EXPENSES | ||
General and administrative | 5,695 | 7,069 |
Compensation expense | 335,280 | |
Professional fees | 19,410 | 31,569 |
Total operating expenses | 360,385 | 38,638 |
OTHER INCOME (EXPENSE) | ||
Interest expense | -3,866 | -29,116 |
Change in fair value of derivative | 2,380 | -96,032 |
Gain on conversion of accounts payable | 16,314 | |
Total other income (expense) | 14,828 | -125,148 |
NET LOSS | ($345,557) | ($163,786) |
BASIC AND DILUTED LOSS PER SHARE | ($0.01) | ($2.85) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 58,595,359 | 57,490 |
Shareholders_Equity
Shareholders Equity (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficiency | Total |
Beginning Balance, Value at Sep. 30, 2012 | $57 | $121,840 | ($220,784) | ($98,886) |
Beginning Balance, Shares at Sep. 30, 2012 | 57,490 | |||
Imputed interest on related party payable | 8,911 | 8,910 | ||
Common stock issued for services, Value | ||||
Net loss | -163,786 | -163,786 | ||
Ending Balance, Value at Sep. 30, 2013 | 57 | 130,751 | -384,570 | -253,762 |
Ending Balance, Shares at Sep. 30, 2013 | 57,490 | |||
Imputed interest on related party payable | 1,655 | 1,655 | ||
Common stock issued for services, Shares | 38,100,000 | 38,100,000 | ||
Common stock issued for services, Value | 38,100 | 297,180 | 335,280 | |
Common stock issued for related party conversion of note payable, shares | 21,900,002 | 21,900,002 | ||
Common stock issued for related party conversion of note payable, Value | 21,900 | 170,820 | 192,720 | |
Settlement of accounts payable with shares, Shares | 23,241 | 23,241 | ||
Settlement of accounts payable with shares, Value | 23 | 182 | 205 | |
Net loss | -345,557 | -345,557 | ||
Ending Balance, Value at Sep. 30, 2014 | $60,080 | $600,588 | ($730,127) | ($69,459) |
Ending Balance, Shares at Sep. 30, 2014 | 60,080,733 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
OPERATING ACTIVITIES | ||
Net loss | ($345,557) | ($163,786) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Shares issued for services | 335,280 | |
Amortization of debt discount on convertible note | 2,212 | 20,206 |
Change in fair value of derivative | -2,380 | 96,032 |
Gain on conversion of accounts payable | 16,314 | |
Imputed interest | 1,655 | 8,910 |
Changes in operating assets and liabilities | ||
Increase (decrease) in accounts payable | 956 | 17,265 |
Net Cash Used in Operating Activities | -24,148 | -21,373 |
INVESTING ACTIVITIES | ||
Net Cash Provided by (Used in) Investing Activities | ||
FINANCING ACTIVITIES | ||
Borrowing from related parties | 23,415 | 21,790 |
Repayment on related party debt | -1,178 | |
Net Cash Provided by Financing Activities | 23,415 | 20,612 |
NET INCREASE (DECREASE) IN CASH | -733 | -761 |
CASH AT BEGINNING OF PERIOD | 820 | 1,581 |
CASH AT END OF PERIOD | 87 | 820 |
CASH PAID FOR: | ||
Interest | ||
Income Taxes | ||
Non Cash Activities | ||
Settlement of accounts payable with stock | $205 |
1_SUMMARY_OF_SIGNIFICANT_ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Nature of Business | |||||||||||||||||
Pacific Oil Company (the “Company”) was incorporated in the State of Nevada on December 5, 2005 as Kat Racing, Inc. From the Company’s inception until the Company’s transition into the oil and natural gas business in early 2013, Kat Racing’s business plan was to design, manufacture, market, sell and distribute custom off-road racing and recreational vehicles and provide marketing and lead services. Kat Racing never generated any revenue from this proposed business plan. | |||||||||||||||||
Since early 2013, the Company has adopted a new business plan to identify, acquire, own and operate oil and gas properties in western Canada. The Company has not acquired any oil and gas properties or realized any revenues to date. | |||||||||||||||||
The Company has adopted a September 30 fiscal year end. | |||||||||||||||||
Use of Estimates and Assumptions | |||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. | |||||||||||||||||
Basic and Diluted Loss per Share | |||||||||||||||||
The Company computes loss per share in accordance with ASC-260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. | |||||||||||||||||
The Company has previously had potentially dilutive debt instruments outstanding in the form of convertible notes payable – related party. However, as the Company has incurred losses since inception, these potentially dilutive shares of common stock have been excluded from the calculation of loss per share as their effect would have been anti-dilutive. Consequently, there were no differences between basic and diluted weighted average shares outstanding as of September 30, 2014 and 2013. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, Revenue Recognition (“ASC-605”). ASC-605 requires that four basic criteria must be met before revenue can be recognized:: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities. | |||||||||||||||||
ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. | |||||||||||||||||
ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below: | |||||||||||||||||
• | Level 1. Observable inputs such as quoted prices in active markets; | ||||||||||||||||
• | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | ||||||||||||||||
• | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||||||||||||||||
The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2013, on a recurring basis: | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | |||||||||||||
Derivative Liability | $ | — | $ | — | $ | 173,856 | $ | (96,032 | ) | ||||||||
Total | $ | — | $ | — | $ | 173,856 | $ | (96,032 | ) | ||||||||
The carrying value of cash, accounts payable, accounts payable – related party and note payable related party approximates their fair value due to the short-term maturity of these financial instruments. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company provides for income taxes in accordance with FASB standards, which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities, as well as for net operating loss carry forwards. | |||||||||||||||||
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Due to the Company’s history of losses, the deferred tax assets are fully offset by a valuation allowance as of September 30, 2014 and 2013.. | |||||||||||||||||
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons: | |||||||||||||||||
September 30, 2014 | 30-Sep-13 | ||||||||||||||||
Income tax benefit at statutory rate | $ | 117,500 | $ | 55,700 | |||||||||||||
Valuation allowance | (117,500 | ) | (55,700 | ) | |||||||||||||
Income tax expense per books | $ | -0- | $ | -0- | |||||||||||||
Net deferred tax assets consist of the following components as of: | |||||||||||||||||
Deferred tax asset: | 30-Sep-14 | 30-Sep-13 | |||||||||||||||
Benefit of net operating losses carried forward | $ | 248,250 | $ | 86,279 | |||||||||||||
Less: Valuation allowance | (248,250 | ) | (86,279 | ) | |||||||||||||
Net deferred tax asset | $ | -0- | $ | -0- | |||||||||||||
At September 30, 2014, the Company had federal tax basis net operating loss carry forwards for federal income tax purposes of approximately $730,000. Net operating losses for federal income tax purposes may be carried back for two years and forward for twenty years. The net operating losses would expire in varying amounts from September 30, 2025 to 2034. However, due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards begin to expire in 2025. The Company has no uncertain tax provisions. | |||||||||||||||||
Reclassifications | |||||||||||||||||
Certain amounts in the 2013 financial statements may have been reclassified to conform to the 2014 presentation. | |||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
The Company has no component of other comprehensive income (loss). Accordingly, net loss equals comprehensive loss for the years ended September 30, 2014 and 2013. | |||||||||||||||||
Advertising Costs | |||||||||||||||||
The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the years ended September 30, 2014 and 2013. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. | |||||||||||||||||
Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. | |||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits. As of September 30, 2014 and 2013, there were no deposits in excess of federally insured limits. | |||||||||||||||||
Stock-based Compensation | |||||||||||||||||
The Company records stock based compensation in accordance with the guidance in ASC Topic 718 (Accounting for Share Based Payments) which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. Stock-based awards to non-employees are accounted for using the fair value method. | |||||||||||||||||
Development Stage Company | |||||||||||||||||
The Company is in the development stage as defined under the then current Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915-205 “Development-Stage Entities,” and among the additional disclosures required as a development stage company are that our financial statements were identified as those of a development stage company, and that the statements of operations, movement in stockholders’ equity (deficit) and cash flows disclosed activity since the date of our inception (December 5, 2005) as a development stage company. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in these financial statements. | |||||||||||||||||
Recent Account Pronouncements | |||||||||||||||||
The Company does not believe that other than disclosed, recently issued, but not yet adopted, accounting pronouncements will have a material impact on its financial position, results of operations or cash flows. |
2_GOING_CONCERN
2. GOING CONCERN | 12 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2. GOING CONCERN | 2. GOING CONCERN |
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern, has incurred losses of $730,127 through September 30, 2014 and had a working capital deficit of $69,460 and a total shareholder deficit of $69,459 at September 30, 2014. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. | |
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. | |
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
3_COMMON_STOCK
3. COMMON STOCK | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity [Abstract] | |||||
3. COMMON STOCK | 3. COMMON STOCK | ||||
On April 25, 2013 the board of director authorized a reverse stock split of 1 for 100. All share amounts have been adjusted for retroactively. | |||||
On October 1, 2013 the Company issued 38,100,000 shares to a newly appointed officer and director which resulted in a change in control of the Company. The shares were valued at $335,280 or $0.0088 per share, and this expense has been recognized as stock based compensation in our statement of operations. The value of these shares was determined by a valuation expert. | |||||
On October 4, 2013, the Company issued 21,900,002 shares of its common stock to satisfy an outstanding convertible note payable and its bifurcated derivative liability. The outstanding convertible note payable relieved was $76,650, less unamortized discount of $57,618, along with its bifurcated derivative liability of $171,476. The shares were valued at $192,720, or $0.0088 per share. These shares were valued by a valuation expert as there had been no active market trading of the Company’s stock at the date of the conversion. The following table summarizes allocation of the common shares issued in this transaction: | |||||
Derivative liability | $ | 171,476 | |||
Convertible notes payable | 76.65 | ||||
Unamortized discount on convertible notes payable | (57,618 | ) | |||
Interest expense to October 4, 2013 | 2,212 | ||||
Value of shares issued to settle liabilities | $ | 192,720 | |||
On December 31, 2013, the Company issued 23,241 shares of its common stock in settlement of accounts payable, relating to services provided to the Company in the amount of $16,519. The Company valued the shares at $0.0088 as determined by the valuation expert, or $205. The Company recognized a gain on the conversion of $16,314. |
4_RELATED_PARTY_TRANSACTIONS
4. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | |
4. RELATED PARTY TRANSACTIONS | 4. RELATED PARTY TRANSACTIONS |
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers and directors or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note. | |
The Company had received $66,671 and $43,255 as of September 30, 2014 and September 30, 2013 (restated), respectively as advances from related parties to fund ongoing operations. In addition, as of September 30, 2014, a related party note payable balance was $1,174. All of the related party accounts and note payable are non-interest bearing, unsecured and due upon demand. The Company had recorded imputed interest expense at 8% on the payable as additional paid in capital. During the years ended September 30, 2014 and 2013, the imputed interest was $1,655 and $8,910, respectively. |
5_CONVERTIBLE_NOTES_PAYABLE_RE
5. CONVERTIBLE NOTES PAYABLE - RELATED PARTY AND DERIVATIVE LIABILITIES | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
5. CONVERTIBLE NOTES PAYABLE - RELATED PARTY AND DERIVATIVE LIABILITIES | 5. CONVERTIBLE NOTES PAYABLE – RELATED PARTY AND DERIVATIVE LIABILITIES | ||||||||
On July 1, 2013, the Company issued convertible notes payable to a related party in the amount of $77,824 that provided for the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes were variable based on certain factors, such as the future price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the promissory note was indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date. | |||||||||
The fair values of the Company’s derivative liabilities were estimated at the issuance date and were revalued at each subsequent reporting date, using a lattice model. The Company recorded a discount on the convertible note payable, related party of $57,618, leaving a net balance of $20,206, and current derivative liabilities of $173,856 at September 30, 2013. The change in fair value of the derivative liabilities resulted in a gain of $2,380 and $96,032 for the years ended September 30, 2014 and 2013, respectively, which has been reported as gain from changes in fair value of derivative liabilities in other income (expense) in the statements of operations. | |||||||||
On October 4, 2013, the Company issued 29,100,002 shares of its common stock to the note holders to satisfy $76,650 of the total outstanding convertible notes payable of $77,824.(See Note 4 above.) Effective January 1, 2014, the Company, with the consent of the holder of the remaining note convertible – related party totaling $1,174, amended the terms of the note payable to remove the conversion feature. The remaining $2,632 balance of the derivative liability relating to the note payable was credited to gain from changes in fair value of derivative liabilities in other income on removal of the conversion feature from the note payable – related party. | |||||||||
The following presents the derivative liability value at September 30, 2014 and September 30, 2013: | |||||||||
30-Sep-14 | 30-Sep-13 | ||||||||
Convertible Note - Related party | $ | — | $ | 173,856 | |||||
The following is a summary of changes in the fair market value of the derivative liability during year ended September 30, 2014 and the year ended September 30, 2013: | |||||||||
Balance, September 30, 2012 | $ | — | |||||||
Increase in derivative value due to issuance of convertible note | 168,812 | ||||||||
Change in fair market value of derivative liabilities due to the mark to market adjustment | 5,044 | ||||||||
Balance, September 30, 2013 | 173,856 | ||||||||
Debt Conversion | (171,476 | ) | |||||||
Change in fair market value of derivative liabilities due to the mark to market adjustment | 252 | ||||||||
Cancellation of the conversion feature | (2,632 | ) | |||||||
Balance at September 30, 2014 | $ | — | |||||||
Key inputs and assumptions used to value the convertible notes payable issued during the year ended September 30, 2013: | |||||||||
• | The underlying stock price was used as the fair value of the common stock; | ||||||||
• | The note amount as of issuance on July 1, 2013 and September 30, 2013, was $77,823.50. The principal amounts of $20,650, $7,000, $10,500, $10,500, $8,750 and $8,750 were converted by the various Note assignees on October 4, 2013. The remaining principal balance as of September 30, 2014 was $1,174. | ||||||||
• | Capital raising events are not a factor for this Note since it was unlikely that the Company would raise capital at less than 50% of market during the term which would reset the conversion feature; | ||||||||
• | It was assumed that the Company would not file a registration statement and it would not become effective. | ||||||||
• | The Issue would redeem based on availability of alternative financing, 0% of the time increasing 1.0% monthly to a maximum of 10%; | ||||||||
• | The Holder would convert over a six month term; | ||||||||
• | The projected annual volatility for each valuation period was based on the historic volatility of the company | ||||||||
• | Events of default were not modeled since there was no penalty for default | ||||||||
6_SUBSEQUENT_EVENTS
6. SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | |
6. SUBSEQUENT EVENTS | 6. SUBSEQUENT EVENTS |
On November 28, 2014, the majority of the shareholders approved a 200 to 1 reverse stock split. Although the Company disclosed in a Schedule 14C information statement filed on December 29, 2014, that we expected to mail notification of this reverse split to our shareholders on or about December 30, 2014, no such mailing has been completed at the date of this filing and we are unable to state when the reverse split will become effective at this time. It is expected the total number of common shares outstanding after the split will be 300,404. | |
The Company has evaluated all subsequent events through the date these financial statements were available to be issued and, other than as disclosed above, determined that there were no material subsequent events to be disclosed. |
1_SUMMARY_OF_SIGNIFICANT_ACCOU1
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Nature of Business | Nature of Business | ||||||||||||||||
Pacific Oil Company (the “Company”) was incorporated in the State of Nevada on December 5, 2005 as Kat Racing, Inc. From the Company’s inception until the Company’s transition into the oil and natural gas business in early 2013, Kat Racing’s business plan was to design, manufacture, market, sell and distribute custom off-road racing and recreational vehicles and provide marketing and lead services. Kat Racing never generated any revenue from this proposed business plan. | |||||||||||||||||
Since early 2013, the Company has adopted a new business plan to identify, acquire, own and operate oil and gas properties in western Canada. The Company has not acquired any oil and gas properties or realized any revenues to date. | |||||||||||||||||
The Company has adopted a September 30 fiscal year end. | |||||||||||||||||
Use of Estimates and Assumptions | Use of Estimates and Assumptions | ||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. | |||||||||||||||||
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share | ||||||||||||||||
The Company computes loss per share in accordance with ASC-260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. | |||||||||||||||||
The Company has previously had potentially dilutive debt instruments outstanding in the form of convertible notes payable – related party. However, as the Company has incurred losses since inception, these potentially dilutive shares of common stock have been excluded from the calculation of loss per share as their effect would have been anti-dilutive. Consequently, there were no differences between basic and diluted weighted average shares outstanding as of September 30, 2014 and 2013. | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, Revenue Recognition (“ASC-605”). ASC-605 requires that four basic criteria must be met before revenue can be recognized:: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. | |||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||
The Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities. | |||||||||||||||||
ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. | |||||||||||||||||
ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below: | |||||||||||||||||
• | Level 1. Observable inputs such as quoted prices in active markets; | ||||||||||||||||
• | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | ||||||||||||||||
• | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||||||||||||||||
The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2013, on a recurring basis: | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | |||||||||||||
Derivative Liability | $ | — | $ | — | $ | 173,856 | $ | (96,032 | ) | ||||||||
Total | $ | — | $ | — | $ | 173,856 | $ | (96,032 | ) | ||||||||
The carrying value of cash, accounts payable, accounts payable – related party and note payable related party approximates their fair value due to the short-term maturity of these financial instruments. | |||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
The Company provides for income taxes in accordance with FASB standards, which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities, as well as for net operating loss carry forwards. | |||||||||||||||||
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Due to the Company’s history of losses, the deferred tax assets are fully offset by a valuation allowance as of September 30, 2014 and 2013.. | |||||||||||||||||
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons: | |||||||||||||||||
September 30, 2014 | 30-Sep-13 | ||||||||||||||||
Income tax benefit at statutory rate | $ | 117,500 | $ | 55,700 | |||||||||||||
Valuation allowance | (117,500 | ) | (55,700 | ) | |||||||||||||
Income tax expense per books | $ | -0- | $ | -0- | |||||||||||||
Net deferred tax assets consist of the following components as of: | |||||||||||||||||
Deferred tax asset: | 30-Sep-14 | 30-Sep-13 | |||||||||||||||
Benefit of net operating losses carried forward | $ | 248,250 | $ | 86,279 | |||||||||||||
Less: Valuation allowance | (248,250 | ) | (86,279 | ) | |||||||||||||
Net deferred tax asset | $ | -0- | $ | -0- | |||||||||||||
At September 30, 2014, the Company had federal tax basis net operating loss carry forwards for federal income tax purposes of approximately $730,000. Net operating losses for federal income tax purposes may be carried back for two years and forward for twenty years. The net operating losses would expire in varying amounts from September 30, 2025 to 2034. However, due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards begin to expire in 2025. The Company has no uncertain tax provisions. | |||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||
Certain amounts in the 2013 financial statements may have been reclassified to conform to the 2014 presentation. | |||||||||||||||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||
The Company has no component of other comprehensive income (loss). Accordingly, net loss equals comprehensive loss for the years ended September 30, 2014 and 2013. | |||||||||||||||||
Advertising Costs | Advertising Costs | ||||||||||||||||
The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the years ended September 30, 2014 and 2013. | |||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. | |||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. | |||||||||||||||||
Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. | |||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||||||
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits. As of September 30, 2014 and 2013, there were no deposits in excess of federally insured limits. | |||||||||||||||||
Stock-based Compensation | Stock-based Compensation | ||||||||||||||||
The Company records stock based compensation in accordance with the guidance in ASC Topic 718 (Accounting for Share Based Payments) which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. Stock-based awards to non-employees are accounted for using the fair value method. | |||||||||||||||||
Development Stage Company | Development Stage Company | ||||||||||||||||
The Company is in the development stage as defined under the then current Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915-205 “Development-Stage Entities,” and among the additional disclosures required as a development stage company are that our financial statements were identified as those of a development stage company, and that the statements of operations, movement in stockholders’ equity (deficit) and cash flows disclosed activity since the date of our inception (December 5, 2005) as a development stage company. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in these financial statements. | |||||||||||||||||
Recent Account Pronouncements | Recent Account Pronouncements | ||||||||||||||||
The Company does not believe that other than disclosed, recently issued, but not yet adopted, accounting pronouncements will have a material impact on its financial position, results of operations or cash flows. |
1_SUMMARY_OF_SIGNIFICANT_ACCOU2
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Fair Value Measurements | Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | ||||||||||||
Derivative Liability | $ | — | $ | — | $ | 173,856 | $ | (96,032 | ) | ||||||||
Total | $ | — | $ | — | $ | 173,856 | $ | (96,032 | ) | ||||||||
Provision for Income Taxes | September 30, 2014 | 30-Sep-13 | |||||||||||||||
Income tax benefit at statutory rate | $ | 117,500 | $ | 55,700 | |||||||||||||
Valuation allowance | (117,500 | ) | (55,700 | ) | |||||||||||||
Income tax expense per books | $ | -0- | $ | -0- | |||||||||||||
Net Deferred Tax Assets | Deferred tax asset: | 30-Sep-14 | 30-Sep-13 | ||||||||||||||
Benefit of net operating losses carried forward | $ | 248,250 | $ | 86,279 | |||||||||||||
Less: Valuation allowance | (248,250 | ) | (86,279 | ) | |||||||||||||
Net deferred tax asset | $ | -0- | $ | -0- |
3_COMMON_STOCK_Tables
3. COMMON STOCK (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity [Abstract] | |||||
Common Stock | Derivative liability | $ | 171,476 | ||
Convertible notes payable | 76.65 | ||||
Unamortized discount on convertible notes payable | (57,618 | ) | |||
Interest expense to October 4, 2013 | 2,212 | ||||
Value of shares issued to settle liabilities | $ | 192,720 |
5_CONVERTIBLE_NOTES_PAYABLE_RE1
5. CONVERTIBLE NOTES PAYABLE - RELATED PARTY AND DERIVATIVE LIABILITIES (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Derivative Liability | 30-Sep-14 | 30-Sep-13 | |||||||
Convertible Note - Related party | $ | — | $ | 173,856 | |||||
Changes in the Fiar Market Value of the Derivative Liability | Balance, September 30, 2012 | $ | — | ||||||
Increase in derivative value due to issuance of convertible note | 168,812 | ||||||||
Change in fair market value of derivative liabilities due to the mark to market adjustment | 5,044 | ||||||||
Balance, September 30, 2013 | 173,856 | ||||||||
Debt Conversion | (171,476 | ) | |||||||
Change in fair market value of derivative liabilities due to the mark to market adjustment | 252 | ||||||||
Cancellation of the conversion feature | (2,632 | ) | |||||||
Balance at September 30, 2014 | $ | — |
1_SUMMARY_OF_SIGNIFICANT_ACCOU3
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 |
Derivative Liability | ($96,032) |
Total | -96,032 |
Level 1 | |
Derivative Liability | |
Total | |
Level 2 | |
Derivative Liability | |
Total | |
Level 3 | |
Derivative Liability | 173,856 |
Total | $173,856 |
1_SUMMARY_OF_SIGNIFICANT_ACCOU4
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Provision for Income Taxes (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Summary Of Significant Accounting Policies - Provision For Income Taxes Details | ||
Income tax benefit at statutory rate | $117,500 | $55,700 |
Valuation allowance | -117,500 | -55,700 |
Income tax expense per books |
1_SUMMARY_OF_SIGNIFICANT_ACCOU5
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Deferred Tax Assets (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Summary Of Significant Accounting Policies - Net Deferred Tax Assets Details | ||
Benefit of net operating losses carried forward | $248,250 | $86,279 |
Less: Valuation allowance | -248,250 | -86,279 |
Net deferred tax asset |
1_SUMMARY_OF_SIGNIFICANT_ACCOU6
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Accounting Policies [Abstract] | ||
Advertising Costs | $0 | $0 |
2_GOING_CONCERN_Details_Narrat
2. GOING CONCERN (Details Narrative) (USD $) | 106 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Incurred Loss | $730,127 |
Shareholder Deficit | 69,459 |
Working Capital Deficit | ($69,460) |
3_COMMON_STOCK_Common_Stock_De
3. COMMON STOCK - Common Stock (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Oct. 04, 2014 | Sep. 30, 2013 | |
Equity [Abstract] | |||
Derivative liability | $171,476 | ||
Convertible notes payable | 76,650 | ||
Unamortized discount on convertible notes payable | 0 | 57,618 | |
Interest expense to October 4, 2013 | -3,866 | 2,212 | -29,116 |
Value of shares issued to settle liabilities | $192,720 |
3_COMMON_STOCK_Details_Narrati
3. COMMON STOCK (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Equity [Abstract] | ||
Reverse Stock Split Ratio | 0.01 | |
Common stock issued for services, Shares | 38,100,000 | |
Common stock issued for services, Value | $335,280 | |
Common stock issued for related party conversion of note payable, shares | 21,900,002 | |
Common stock issued for related party conversion of note payable, Value | 192,720 | |
Convertible Note Payable Relieved | 76,650 | |
Unamortized Discount | 0 | 57,618 |
Bifurcated Derivative Liability | 171,476 | |
Settlement of accounts payable with shares, Shares | 23,241 | |
Settlement of accounts payable with shares, Value | 205 | |
Gain on conversion of accounts payable | $16,314 |
4_RELATED_PARTY_TRANSACTIONS_D
4. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ||
Advances payable - related party | $66,670 | $43,255 |
Note payable - related party | 1,174 | |
Imputed interest | $1,655 | $8,910 |
5_CONVERTIBLE_NOTES_PAYABLE_RE2
5. CONVERTIBLE NOTES PAYABLE - RELATED PARTY AND DERIVATIVE LIABILITIES - Derivative Liability (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Debt Disclosure [Abstract] | ||
Convertible Note - Related party | $173,856 |
5_CONVERTIBLE_NOTES_PAYABLE_RE3
5. CONVERTIBLE NOTES PAYABLE - RELATED PARTY AND DERIVATIVE LIABILITIES - Changes in the Fair Market Value of the Derivative Liability (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Debt Disclosure [Abstract] | ||
Balance, September 30, 2012 | $173,856 | |
Increase in derivative value due to issuance of convertible note | 168,812 | |
Debt Conversion | -171,476 | |
Change in fair market value of derivative liabilities due to the mark to market adjustment | 5,044 | 252 |
Cancellation of the Conversion Feature | -2,632 | |
Balance, September 30, 2013 | $173,856 |
5_CONVERTIBLE_NOTES_PAYABLE_RE4
5. CONVERTIBLE NOTES PAYABLE - RELATED PARTY AND DERIVATIVE LIABILITIES (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Debt Disclosure [Abstract] | ||
Discount on Convertible Note Payable, Related Party | $57,618 | |
Net Balance, Convertible Note Payable, Related Party | 20,206 | |
Current Derivative Liabilities | 173,856 | |
Change in Fair Value of the Derivative Liabilities | 2,380 | 96,032 |
Common stock issued for related party conversion of note payable, shares | 21,900,002 | |
Common stock issued for related party conversion of note payable, Value | $192,720 |
6_SUBSEQUENT_EVENTS_Details_Na
6. SUBSEQUENT EVENTS (Details Narrative) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Reverse Stock Split | 0.01 | |
Common Stock, Shares Outstanding | 60,080,733 | 57,490 |
Subsequent Event [Member] | ||
Reverse Stock Split | 0.005 | |
Common Stock, Shares Outstanding | 300,404 |