Document and Entity Information
Document and Entity Information | 3 Months Ended |
Nov. 30, 2015shares | |
Document And Entity Information | |
Entity Registrant Name | Event Cardio Group Inc. |
Entity Central Index Key | 1,394,130 |
Document Type | 10-Q |
Document Period End Date | Nov. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --08-31 |
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 Common Stock, Shares Outstanding | 116,205,321 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2,016 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Nov. 30, 2015 | Aug. 31, 2015 |
Current Assets | ||
Cash | $ 19,214 | $ 32,427 |
Prepaid expenses | 561,754 | 568,537 |
Financing costs, net | 71,423 | 105,999 |
Total Current Assets | 652,391 | 706,963 |
Prepaid expenses - non-current portion | 310,021 | 392,516 |
Property and Equipment, net | 905 | 1,214 |
Deposit on equipment purchase | 250,000 | 150,000 |
TOTAL ASSETS | 1,213,317 | 1,250,693 |
Current Liabilities | ||
Accounts payable | 663,552 | 598,835 |
Due to related parties | 41,284 | 55,864 |
Notes payable - related parties | 546,320 | 549,502 |
Total Current Liabilities | 1,251,156 | 1,204,201 |
Convertible Notes Payable | 525,000 | 525,000 |
TOTAL LIABILITIES | 1,776,156 | 1,729,201 |
Stockholders' Deficit | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 10,000,000 shares issued and outstanding | 10,000 | 10,000 |
Common stock,190,000,000 shares authorized at $0.001 par value, 116,205,321 shares issued and outstanding at November 30, 2015 and 109,460,321 issued and outstanding at August 31, 2015 | 116,205 | 109,460 |
Additional paid in capital | 2,533,492 | 2,110,237 |
Equity instruments to be issued | 125,950 | 168,950 |
Accumulated other comprehensive income | 161,916 | 103,432 |
Accumulated deficit | (3,510,402) | (2,980,587) |
TOTAL STOCKHOLDERS' DEFICIT | (562,839) | (478,508) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,213,317 | $ 1,250,693 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2015 | Aug. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred Stock Par Value | $ 0.001 | $ 0.001 |
Preferred Stock Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock Shares Issued | 10,000,000 | 10,000,000 |
Preferred Stock Shares Outstanding | 10,000,000 | 10,000,000 |
Common Stock Par Value | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized | 190,000,000 | 190,000,000 |
Common Stock Shares Issued | 116,205,321 | 109,460,321 |
Common Stock Shares Outstanding | 116,205,321 | 109,460,321 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Income Statement [Abstract] | ||
Revenue | ||
Operating Expenses | ||
General and administrative | $ 387,533 | $ 112,639 |
Research and development - related party | 134,813 | |
Research and development - other | $ 80,210 | 10,000 |
Total Operating Expenses | 467,743 | 257,452 |
Loss from Operations | (467,743) | (257,452) |
Other Expenses | ||
Interest expense - related parties | 16,990 | $ 19,590 |
Interest expense - other | 10,500 | |
Amortization - loan costs | 34,582 | $ 8,707 |
Loss before Income Taxes | $ (529,815) | $ (285,749) |
Provision for Income Taxes | ||
Net Loss | $ (529,815) | $ (285,749) |
Other Comprehensive Income | ||
Foreign currency translation adjustment | 58,484 | (16,156) |
Comprehensive Loss | $ (471,331) | $ (301,905) |
Loss per Share: | ||
Basic and Diluted loss per share | $ (0.005) | $ (0.004) |
Weighted Average Number of Shares Outstanding Basic and Diluted | 113,783,783 | 80,871,696 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Cash Flows from Operating Activities | ||
Net loss | $ (529,815) | $ (285,749) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of prepaid expenses | 283,503 | |
Depreciation of property and equipment | 304 | $ 500 |
Amortization of financing costs | 34,582 | 10,707 |
Changes in assets and liabilities: | ||
Prepaid expenses | 12,775 | (62,500) |
Accounts payable | 64,717 | 66,918 |
Net cash used in operating activities | (133,934) | $ (270,124) |
Cash Flows from Investing Activities | ||
Deposit on equipment purchase | (100,000) | |
Net cash used in investing activities | (100,000) | |
Cash Flows from Financing Activities | ||
Repayments of due to related parties | $ (14,358) | |
Advances from related parties | $ 7,241 | |
Proceeds from notes payable - related parties | 195,205 | |
Proceeds from issuance of common shares | $ 180,000 | 100,000 |
Net cash provided by financing activities | 165,642 | 302,446 |
Effect of exchange rate on cash | 55,079 | (16,156) |
Increase (Decrease) in Cash | (13,213) | 16,166 |
Cash, beginning of period | 32,427 | |
Cash, end of period | $ 19,214 | $ 102,783 |
Cash paid during the year for: | ||
Interest | ||
Taxes | ||
Non-Cash Supplemental Cash Flow Information: | ||
Issuance of common stock for services recorded as prepaid expense | $ 207,000 |
1. OVERVIEW
1. OVERVIEW | 3 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
1. OVERVIEW | 1. OVERVIEW Description of Business Event Cardio Group Inc. (the Company") was incorporated under the name Sunrise Holdings Limited on October 26, 2005 under the laws of Nevada and changed its name to Event Cardio Group Inc. on November 7, 2014. The Company is developing a cardiac monitoring device based on a wireless and leadless advanced cardiac monitor. Upon completion of the development the device will collect medical data and transmit it to physicians for diagnostic evaluation. The Company also has a license agreement to distribute a patented product in the use of breast disease detection. On September 8, 2014, the Company entered into a share exchange agreement with 2340960 Ontario Inc.'s shareholders whereby the Company acquired all of the issued and outstanding common shares of 2340960 Ontario Inc. in exchange for 79,500,000 common shares of the Company. Upon completion of this transaction, the shareholders of 2340960 Ontario Inc. held approximately 93.6% of voting control of the Company. This transaction has been accounted for as a reverse merger with 2340960 Ontario Inc. being the accounting acquirer and the Company being the acquiree. In connection with this transaction, the Company changed its fiscal year end from September 30th to August 31st. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any revenue since inception, has incurred losses, and has an accumulated deficit of $3,510,402 as of November 30, 2015. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiating with other business entities for potential acquisitions and/or acquiring new clients to generate revenues. There is no assurance that the Company will ever be profitable. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Basis of Presentation These financial statements include the accounts of the Company and its wholly owned subsidiaries 2340960 Ontario Inc. and EFIL Sub of ECG Inc. All inter-company accounts and transactions have been eliminated. The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Companys management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of November 30, 2015 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended November 30, 2015 are not necessarily indicative of the operating results for the full fiscal year or any future period. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the form 10-K filed with the SEC on December 14, 2015. The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements and does not present or disclose inception-to-date information and other remaining disclosure requirements of Topic 915. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates In preparing these financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting years. Actual results could differ from those estimates. Fair Value Measurements ASC 820, Fair Value Measurements The estimated fair value of certain financial instruments, including cash and cash equivalents, and accounts payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features are comparable to rates of returns for instruments of similar credit risk. Share Based Compensation The Company applies ASC 718 Share-Based Compensation and ASC 505 Equity to account for service provider share-based payments. In accordance with ASC 718 and ASC 505, the Company determines whether a share based payment should be classified and accounted for as a liability award or equity award. All grants of share-based payments to service providers are classified as equity awards and are recognized in the financial statements over the period in which the services are received based on the fair value determined as of the measurement date. Included in prepaid expenses on the accompanying balance sheet at November 30, 2015 and August 31, 2015 is the unamortized portion of share based payments for services to be rendered of $728,247 and $791,962 respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. Income Taxes Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, the Company has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized. The Company files income tax returns in Canada and the United States with varying statutes of limitations. The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of our provision for income taxes. Foreign Currency Translation The Company's reporting and functional currency is the U.S. dollar. The Company's Canadian operation's functional currency is the Canadian dollar. The Company's U.S. subsidiary's functional currency is the U.S. dollar. Transactions originating in Canadian dollars are translated to the functional currency of the US dollar as follows: using period end rates of exchange for assets and liabilities, average rates of exchange for the period of transactions for revenues and expenses and historical rates for equity. The financial statements of the Company's Canadian operations are translated from the functional currency of the Canadian dollar into the reporting currency of the United States dollar in accordance with ASC 830, Foreign Currency Matters, using period end rates of exchange for assets and liabilities, average rates of exchange for the period for revenues and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the functional currency of Canadian dollar Canadian operation's financial statements into the reporting currency of U.S. dollar financial statements are included in determining comprehensive income. As of November 30, 2015 and August 31, 2015, the cumulative translation adjustment of $161,916 and $103,432 respectively was classified as accumulated other comprehensive income in the stockholders' deficit section of the balance sheet. For the periods ended November 30, 2015 and November 30, 2014, the foreign currency translation adjustment to accumulated other comprehensive income was $58,484 and $(16,156) respectively. Comprehensive Loss Comprehensive loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, Accounting Standards Codification (ASC) 200, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For the year presented, the Company's comprehensive loss includes net loss and foreign currency translation adjustments and is presented in the statement of comprehensive loss. Research and Development Expenses All research and development costs are expensed as incurred. Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives and Hedging Activities. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: To record when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. New Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Deferral of the Effective Date, In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, the FASB issued Accounting Standards Update 201415 (ASU 2014-15), Presentation of Financial Statements Going Concern (Subtopic 205 40): Disclosure of Uncertainties About an Entitys Ability to Continue as a Going Concern |
3. DUE TO RELATED PARTIES
3. DUE TO RELATED PARTIES | 3 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
3. DUE TO RELATED PARTIES | 3. DUE TO RELATED PARTIES The amounts due to related parties are non-interest bearing, with no fixed terms of repayment, are payable on demand and are unsecured. As of November 30, 2015 and August 31, 2015, the amounts of due to related parties are $41,284 and $55,864 respectively. |
4. NOTES PAYABLE - RELATED PART
4. NOTES PAYABLE - RELATED PARTIES | 3 Months Ended |
Nov. 30, 2015 | |
Payables and Accruals [Abstract] | |
4. NOTES PAYABLE - RELATED PARTIES | 4. NOTES PAYABLE - RELATED PARTIES As at November 30, 2015 and August 31, 2015, the Company has a promissory note to 2399371 Ontario Inc., a company owned by an affiliate, for $583,000 Canadian ($438,346 US$) and $583,000 Canadian ($440,898 US$), respectively. There have been no repayments to date on this note since its inception. The note bears interest at 12% per annum with principal and interest both payable on the maturity date of June 1, 2016, which has been extended from the original maturity date of December 1, 2015, in conjunction with the issuance of the additional promissory note described below and the commitment to issue equity instruments as described in Note 6. The note is secured by the common shares of 2340960 Ontario Inc. and a lien on all of the company's assets. This note has a provision whereby the company is restricted from issuing any shares of capital stock or borrowing any money unless one-half of the net proceeds of such issuance or borrowing, up to the amount of the outstanding principal and accrued interest on the note, are used to satisify the amounts due under the note. As at November 30, 2015, the Company has a promissory note to 2399371 Ontario Inc., a company owned by an affiliate, for $64,500 Canadian ($48,496 US$) bearing interest at 12% per annum, principal and interest both payable on June 1, 2016. This note was issued in conjunction with the extension of the promissory note described above and the commitment to issue equity instruments as described in Note 6. The note is secured by the common shares of 2340960 Ontario Inc. and a lien on all of the company's assets. As at November 30, 2015, the Company has a promissory note to 9058583 Canada Inc., a company owned by affiliates, for $79,106 Canadian ($59,478 US$) bearing interest at 12% per annum, principal and interest both payable on June 1, 2016. In conjunction with this note, the Company entered into a Sublicense agreement with 9508583 Canada Inc. whereby 9508583 Canada Inc. was granted the exclusive rights to distribute the BreastCare DTS Accrued interest on notes payable - related parties as at November 30, 2015 and August 31, 2015 was $81,594 and $65,100 respectively and is included in accounts payable. |
5. CONVERTIBLE NOTES PAYABLE
5. CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Nov. 30, 2015 | |
Debt Disclosure [Abstract] | |
5. CONVERTIBLE NOTES PAYABLE | 5. CONVERTIBLE NOTES PAYABLE The company offered, pursuant to a Regulation S Subscription Agreement and Investment Representation dated February 3, 2015, up to $2,000,000 of 8% convertible notes with interest payable annually on January 31st. The holder upon written notice to the company may elect to have accrued but unpaid interest added to the principal amount of the note in lieu of payment of interest. The principal amount of the note is payable on January 31, 2018. The note, or any part thereof and any unpaid interest is convertible into common shares of the company at any time at the option of the holder at a conversion price of $0.15 per common share. The note may be prepaid at any time in full by the company upon ten days notice to the holder. As at November 30, 2015, $525,000 of the convertible notes payable have been issued as follows. Medpac Asia Pacific PTY Ltd. of Australia ("Medpac") for $500,000. In addition to the terms of the convertible note payable described above, if the note is prepaid by the company at any time prior to the maturity date, if the volume weighted average price of the common shares of the company for the ten trading days preceding the early repayment date is less than $0.15 per common share, then Medpac shall receive a number of common share purchase warrants sufficient to purchase up to 1% of the then outstanding number of common shares of the Company. Such common share purchase warrants once issued would be exercisable for a period of three years at an exercise price of $0.15 per common share, but may be exercised on a cashless basis in accordance with a specified formula. Medpac has also received, for its services as part of the transaction noted above, a convertible note payable of $25,000 having terms and conditions identical to Medpac's other convertible note payable described above, except that the number of common share purchase warrants potentially issuable upon early payment of the note would be sufficient to only purchase up to 0.0005% of the then outstanding common shares of the company. At the time of Medpac's investment noted above, the Company agreed to enter into an exclusive Distribution Agreement with Medpac for the Company's BreastCare DTS BreastCare DTS |
6. STOCKHOLDERS' DEFICIT
6. STOCKHOLDERS' DEFICIT | 3 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
6. STOCKHOLDERS' DEFICIT | 6. STOCKHOLDERS' DEFICIT Common Shares and Common Share Purchase Warrant Issuance On September 28, 2015, the Company issued 4,100,000 common shares for proceeds of $205,000. In conjunction with this common share offering the company also issued 520,000 common shares in respect of finders fees. On September 28, 2015, the Company issued 1,250,000 common shares in exchange for a service agreement for a fair value of $137,500. On November 3, 2015, the Company issued 750,000 common shares in exchange for a service agreement for a fair value of $75,000. On November 3, 2015, the Company issued 125,000 common shares in exchange for a service agreement for a fair value of $12,500. Common Share Purchase Warrants As of November 30, 2015 there are 6,550,000 common share purchase warrants issued and outstanding. 250,000 common share purchase warrants allow the holder to purchase 1 common share of the company at an exercise price of $0.20 per warrant up to the expiration date of January 31, 2016. 2,200,000 common share purchase warrants allow the holder to purchase 1 common share of the company at an exercise price of $0.10 per warrant up to the expiration date of August 27, 2019. 4,100,000 common share purchase warrants allow the holder to purchase 1 common share of the company at an exercise price of $0.10 per warrant up to the expiration date of September 28, 2019. Equity Instruments to be Issued For the extension of a note payable - related party and issuance of a new note payable related party as described in Note 4, the company is committed to issue 600,000 common shares, valued at $43,200 and 600,000 common share purchase warrants, which allow the holder to purchase 1 common share of the company at an exercise price of $0.10 per warrant up to four years from the date of issuance, valued at $42,750. The company has received $40,000 related to subscriptions for 800,000 common shares to be issued in the future. Equity Incentive Plan The Company has created the Event Cardio Group Inc. 2015 Equity Incentive Plan ("equity incentive plan") which allows for the |
7. RELATED PARTY
7. RELATED PARTY | 3 Months Ended |
Nov. 30, 2015 | |
Related Party Transactions [Abstract] | |
7. RELATED PARTY | 7. RELATED PARTY The Company is related to Contex International Technologies (Canada) Inc. ("Contex") through the fact that affiliates of the Company hold a 34% interest in 2419596 Ontario Inc, which owns Contex. The Company has entered into a service agreement with Contex, whereby Contex will provide services related to the design and development of a wireless and leadless ECG cardiac monitor. The agreement runs for a term of one year to May 22, 2016 and will automatically renew for subsequent terms of one year unless notice of termination is given by either party in writing. For the period ended November 30, 2015 and November 30, 2014, $nil and $134,813 respectively, have been incurred related to this agreement and have been expensed in research and development expense. See Note 4 regarding notes payable - related parties. The company has entered into an employment agreement with the CEO for $225,000 per year up to August 27, 2018. The Company is related to the Chief Executive Officer ("CEO"), who is also the company's president and sole board member. For the three months ended November 30, 2015 and November 30, 2014, $56,250 and $nil respectively, have been expensed related to compensation to the CEO and included in general and administrative expense. Included in accounts payable at November 30, 2015 and August 31, 2015 is $181,250 and $125,000 respectively related to this employment agreement. |
8. COMMITMENTS
8. COMMITMENTS | 3 Months Ended |
Nov. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
8. COMMITMENTS | 8. COMMITMENTS In exchange for a service agreement, the Company is committed to pay $5,000 per month through August 5, 2016. On October 24, 2014, the Company entered into a License Agreement with Life Medical Technologies, Inc. ('Life Medical") with respect to Life Medicals BreastCare DTS BreastCare DTS As part of entering into the License Agreement, the Company has made prepayments of the royalties commitment noted above and such are included in prepaid expenses on the accompanying balance sheet at November 30, 2015. For the three months ended November 30, 2015, and November 30, 2014 $25,000 and $nil respectively of the above noted prepayment has been expensed. The recipients of 526,315 shares related to prepaid royalties are also to be paid in cash or shares of common stock, at the company's option, an amount equal to the excess, if any, of $70,000 over the value of such shares as of December 12, 2015. |
9. CONTINGENCIES
9. CONTINGENCIES | 3 Months Ended |
Nov. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
9. CONTINGENCIES | 9. CONTINGENCIES On November 30, 2015, the company's subsidiary EFIL Sub of ECG Inc. received a breach of contract notice related to its license agreement with Life Medical as described in Note 8. Life Medical contends that the company has defaulted under the provisions of this agreement and have thus triggered penalty clauses in the agreement. Life Medical is now demanding payment of these penalties. As per the breach of contract notice details, it is estimated that the total penalty could be as high as $770,000 based on the formula: $1 per every 100 people in each designated country, up to a maximum of $150,000 per designated country, with a total of seven countries identified in the notice. In addition due to this breach, Life Medical also contends that the license rights to the seven countries identified now belongs exclusively to Life Medical. It is management's contention that the company has not defaulted under the provisions of the agreement and thus is not required to pay any such penalties, nor have the licensing rights reverted back to Life Medical in the seven countries identified. The outcome of this contingency is not determinable at this time. |
10. SUBSEQUENT EVENTS
10. SUBSEQUENT EVENTS | 3 Months Ended |
Nov. 30, 2015 | |
Subsequent Events [Abstract] | |
10. SUBSEQUENT EVENTS | 10. SUBSEQUENT EVENTS Management has evaluated subsequent events through the date which the consolidated financial statements were available to be issued. Based on the evaluation no material events have occurred that require recognition or disclosure therein. |
1. OVERVIEW (Policies)
1. OVERVIEW (Policies) | 3 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Event Cardio Group Inc. (the Company") was incorporated under the name Sunrise Holdings Limited on October 26, 2005 under the laws of Nevada and changed its name to Event Cardio Group Inc. on November 7, 2014. The Company is developing a cardiac monitoring device based on a wireless and leadless advanced cardiac monitor. Upon completion of the development the device will collect medical data and transmit it to physicians for diagnostic evaluation. The Company also has a license agreement to distribute a patented product in the use of breast disease detection. On September 8, 2014, the Company entered into a share exchange agreement with 2340960 Ontario Inc.'s shareholders whereby the Company acquired all of the issued and outstanding common shares of 2340960 Ontario Inc. in exchange for 79,500,000 common shares of the Company. Upon completion of this transaction, the shareholders of 2340960 Ontario Inc. held approximately 93.6% of voting control of the Company. This transaction has been accounted for as a reverse merger with 2340960 Ontario Inc. being the accounting acquirer and the Company being the acquiree. In connection with this transaction, the Company changed its fiscal year end from September 30th to August 31st. |
Going Concern | Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any revenue since inception, has incurred losses, and has an accumulated deficit of $3,510,402 as of November 30, 2015. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiating with other business entities for potential acquisitions and/or acquiring new clients to generate revenues. There is no assurance that the Company will ever be profitable. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
Basis of Presentation | Basis of Presentation These financial statements include the accounts of the Company and its wholly owned subsidiaries 2340960 Ontario Inc. and EFIL Sub of ECG Inc. All inter-company accounts and transactions have been eliminated. The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Companys management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of November 30, 2015 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended November 30, 2015 are not necessarily indicative of the operating results for the full fiscal year or any future period. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the form 10-K filed with the SEC on December 14, 2015. The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements and does not present or disclose inception-to-date information and other remaining disclosure requirements of Topic 915. |
2. SUMMARY OF SIGNIFICANT ACC17
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates In preparing these financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting years. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements The estimated fair value of certain financial instruments, including cash and cash equivalents, and accounts payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features are comparable to rates of returns for instruments of similar credit risk. |
Share Based Compensation | Share Based Compensation The Company applies ASC 718 Share-Based Compensation and ASC 505 Equity to account for service provider share-based payments. In accordance with ASC 718 and ASC 505, the Company determines whether a share based payment should be classified and accounted for as a liability award or equity award. All grants of share-based payments to service providers are classified as equity awards and are recognized in the financial statements over the period in which the services are received based on the fair value determined as of the measurement date. Included in prepaid expenses on the accompanying balance sheet at November 30, 2015 and August 31, 2015 is the unamortized portion of share based payments for services to be rendered of $728,247 and $791,962 respectively. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. |
Income Taxes | Income Taxes Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, the Company has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized. The Company files income tax returns in Canada and the United States with varying statutes of limitations. The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of our provision for income taxes. |
Foreign Currency Translation | Foreign Currency Translation The Company's reporting and functional currency is the U.S. dollar. The Company's Canadian operation's functional currency is the Canadian dollar. The Company's U.S. subsidiary's functional currency is the U.S. dollar. Transactions originating in Canadian dollars are translated to the functional currency of the US dollar as follows: using period end rates of exchange for assets and liabilities, average rates of exchange for the period of transactions for revenues and expenses and historical rates for equity. The financial statements of the Company's Canadian operations are translated from the functional currency of the Canadian dollar into the reporting currency of the United States dollar in accordance with ASC 830, Foreign Currency Matters, using period end rates of exchange for assets and liabilities, average rates of exchange for the period for revenues and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the functional currency of Canadian dollar Canadian operation's financial statements into the reporting currency of U.S. dollar financial statements are included in determining comprehensive income. As of November 30, 2015 and August 31, 2015, the cumulative translation adjustment of $161,916 and $103,432 respectively was classified as accumulated other comprehensive income in the stockholders' deficit section of the balance sheet. For the periods ended November 30, 2015 and November 30, 2014, the foreign currency translation adjustment to accumulated other comprehensive income was $58,484 and $(16,156) respectively. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, Accounting Standards Codification (ASC) 200, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For the year presented, the Company's comprehensive loss includes net loss and foreign currency translation adjustments and is presented in the statement of comprehensive loss. |
Research and Development Expenses | Research and Development Expenses All research and development costs are expensed as incurred. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives and Hedging Activities. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: To record when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Deferral of the Effective Date, In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, the FASB issued Accounting Standards Update 201415 (ASU 2014-15), Presentation of Financial Statements Going Concern (Subtopic 205 40): Disclosure of Uncertainties About an Entitys Ability to Continue as a Going Concern |
1. OVERVIEW (Details Narrative)
1. OVERVIEW (Details Narrative) - USD ($) | Nov. 30, 2015 | Aug. 31, 2015 |
Accounting Policies [Abstract] | ||
Accumulated Deficit | $ (3,510,402) | $ (2,980,587) |
2. SUMMARY OF SIGNIFICANT ACC19
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Aug. 31, 2015 | |
Accounting Policies [Abstract] | |||
Share based payments for services, Unamortized | $ 728,247 | $ 791,962 | |
Cumulative Translation Adjustment | 161,916 | $ 103,432 | |
Foreign Currency Translation Adjustment to Accumulated other Comprehensive Income | $ 58,484 | $ (16,156) |
3. DUE TO RELATED PARTIES (Deta
3. DUE TO RELATED PARTIES (Details Narrative) - USD ($) | Nov. 30, 2015 | Aug. 31, 2015 |
Notes to Financial Statements | ||
Due to Related Parties | $ 41,284 | $ 55,864 |
4. NOTES PAYABLE - RELATED PA21
4. NOTES PAYABLE - RELATED PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Aug. 31, 2015 | |
Accrued Interest | $ 81,594 | $ 65,100 |
2399371 Ontario Inc. | ||
Maturity Date | Jun. 1, 2016 | |
2399371 Ontario Inc. | United States of America, Dollars | ||
Promissory Note Balance | $ 438,346 | 440,898 |
2399371 Ontario Inc. | Canada, Dollars | ||
Promissory Note Balance | $ 583,000 | $ 583,000 |
2399371 Ontario Inc. II | ||
Maturity Date | Jun. 1, 2016 | |
2399371 Ontario Inc. II | United States of America, Dollars | ||
Promissory Note Balance | $ 48,496 | |
2399371 Ontario Inc. II | Canada, Dollars | ||
Promissory Note Balance | $ 64,500 | |
9058583 Canada Inc. | ||
Maturity Date | Jun. 1, 2016 | |
9058583 Canada Inc. | United States of America, Dollars | ||
Promissory Note Balance | $ 59,478 | |
9058583 Canada Inc. | Canada, Dollars | ||
Promissory Note Balance | $ 79,106 |
5. CONVERTIBLE NOTES PAYABLE (D
5. CONVERTIBLE NOTES PAYABLE (Details Narrative) | 3 Months Ended |
Nov. 30, 2015USD ($) | |
Regulation S Subscription Agreement Offering | $ 2,000,000 |
Regulation S Subscription Agreement, Issued | 525,000 |
Medpac Asia Pacific PTY Ltd. of Australia | |
Regulation S Subscription Agreement, Issued | 500,000 |
Medpac Asia Pacific PTY Ltd. of Australia II | |
Regulation S Subscription Agreement, Issued | $ 25,000 |
6. STOCKHOLDERS' DEFICIT (Detai
6. STOCKHOLDERS' DEFICIT (Details Narrative) | 3 Months Ended |
Nov. 30, 2015USD ($)shares | |
Equity [Abstract] | |
Sale of Stock, Shares | 4,100,000 |
Sale of Stock, Proceeds | $ | $ 205,000 |
Issuance of common stock for services, Shares | 2,125,000 |
Issuance of common stock for services, Value | $ | $ 225,000 |
Share Purchase Warrants Issued and Outstanding | 6,550,000 |
Maximum Number of Shares Held under Equity Incentive Plan | 10,000,000 |
Equity to be issued, Shares | 1,200,000 |
Equity to be issued, Value | $ | $ 85,950 |
Subscriptions, Shares | 800,000 |
Subscriptions, Value | $ | $ 40,000 |
7. RELATED PARTY (Details Narra
7. RELATED PARTY (Details Narrative) - USD ($) | 3 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Aug. 31, 2015 | |
Research and Development Expense | $ 134,813 | ||
Compensation to CEO | $ 56,250 | ||
Accounts Payable, Compensation | $ 181,250 | $ 125,000 | |
2419596 Ontario Inc. | |||
Ownership Percentage | 34.00% |
8. COMMITMENTS (Details Narrati
8. COMMITMENTS (Details Narrative) - USD ($) | 3 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Service Agreement Commitment | In exchange for a service agreement, the Company is committed to pay $5,000 per month through August 5, 2016 and to issue 250,000 common shares on each of October 5, 2015; January 5, 2016; April 5, 2016 and July 5, 2016. | |
License Agreement | On October 24, 2014, the Company entered into a License Agreement with Life Medical Technologies, Inc. ('Life Medical") with respect to Life Medicals BreastCare DTS BreastCare DTS | |
Prepayment of Royalties | $ 25,000 |
9. CONTINGENCIES (Details Narra
9. CONTINGENCIES (Details Narrative) | Nov. 30, 2015USD ($) |
Life Medical | |
Loss Contingency | $ 770,000 |