Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Jun. 30, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | GREENKRAFT, INC. | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2016 | |
Trading Symbol | gkit | |
Amendment Flag | false | |
Entity Central Index Key | 1,398,529 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 96,432,718 | |
Entity Public Float | $ 9,562,385 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | FY |
GREENKRAFT, INC. - Balance Shee
GREENKRAFT, INC. - Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Current Assets: | |||
Cash and cash equivalents | $ 379,078 | $ 2,261,648 | |
Cash restricted | 1,506,152 | ||
Accounts receivable, net | 47,791 | 323,925 | |
Inventories, net | 1,354,866 | 1,452,218 | |
TOTAL CURRENT ASSETS | 1,781,735 | 5,543,943 | |
Inventories long term, net | 539,229 | 621,939 | |
Property and equipment, net | 73,613 | 81,818 | |
Total Non-Current Assets | 612,842 | 703,757 | |
Total Assets | 2,394,577 | 6,247,700 | |
Current Liabilities: | |||
Accounts payable | 85,745 | 1,248,777 | |
Accounts payable - related party | 846,334 | 758,834 | |
Accrued liabilities | 139,743 | 100,379 | |
Deferred income | 1,785,295 | 1,885,770 | |
Covertible note payable | 7,500 | ||
Other liabilities | 75,000 | 75,000 | |
Line of credit | 1,998,850 | ||
Deferred rent expense - current | 1,332 | ||
Related party debt | 1,901,916 | 1,901,916 | |
Total Current Liabilities | 4,842,865 | 7,969,526 | |
Deferred rent expense - net of current | 8,000 | ||
TOTAL LIABILITIES | 4,850,865 | 7,969,526 | |
Stockholders' Deficit | |||
Common stock | [1] | 96,433 | 88,883 |
Additional paid-in capital | 3,245,147 | 3,194,197 | |
Accumulated deficit | (5,797,868) | (5,004,906) | |
TOTAL STOCKHOLDERS' DEFICIT | (2,456,288) | (1,721,826) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 2,394,577 | $ 6,247,700 | |
[1] | 400,000,000 shares, 96,432,718 and 88,882,718 shares issued and outstanding at December 31, 2016 and December 31, 2015. |
Statement of Financial Position
Statement of Financial Position - Parenthetical - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position | ||
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares Issued | 96,432,718 | 88,882,718 |
Common Stock, Shares Outstanding | 96,432,718 | 88,882,718 |
GREENKRAFT, INC. - Statements o
GREENKRAFT, INC. - Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement | ||
Revenue | $ 846,957 | $ 12,340,280 |
Cost of revenue | 688,405 | 12,028,652 |
Gross Profit | 158,552 | 311,628 |
Operating Expenses: | ||
Research and development | 17,545 | 55,956 |
Selling, general, and administrative | 918,423 | 886,915 |
TOTAL OPERATING EXPENSES | 935,968 | 942,871 |
Loss from operations | (777,416) | (631,243) |
Other Inocme (Expenses): | ||
Interest expense | (16,305) | (112,212) |
Interest income | 759 | 4,516 |
Total Other Income (Expense) | (15,546) | (107,696) |
Net Loss Applicable to Common Shares | $ (792,962) | $ (738,939) |
Net Loss Per Basic and Diluted Shares | $ (0.01) | $ (0.01) |
Weighted Average Number of Common Shares Outstanding - Basic and Diluted | 94,137,786 | 88,882,718 |
GREENKRAFT, INC.- Statements of
GREENKRAFT, INC.- Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Total |
Balance, Value at Dec. 31, 2014 | $ 88,883 | $ 3,122,197 | $ (4,265,967) | $ (1,054,887) |
Balance, Shares at Dec. 31, 2014 | 88,882,718 | |||
Contributed Officer Salary | 72,000 | 72,000 | ||
Net loss | (738,939) | (738,939) | ||
Balance, Value at Dec. 31, 2015 | $ 88,883 | 3,194,197 | (5,004,906) | (1,721,826) |
Balance, Shares at Dec. 31, 2015 | 88,882,718 | |||
Contributed Officer Salary | 36,000 | 36,000 | ||
Net loss | (792,962) | (792,962) | ||
Amortization of Convertible Notes Payable | 15,000 | 15,000 | ||
Reclassification for Shares Issued, Value | $ 50 | (50) | ||
Reclassification for Shares Issued, Shares | 50,000 | |||
Shares Issued from Convertible Notes Payable, Value | $ 7,500 | $ 7,500 | ||
Shares Issued from Convertible Notes Payable, Shares | 7,500,000 | 7,500,000 | ||
Balance, Value at Dec. 31, 2016 | $ 96,433 | $ 3,245,147 | $ (5,797,868) | $ (2,456,288) |
Balance, Shares at Dec. 31, 2016 | 96,432,718 |
GREENKRAFT, INC. - Statements 6
GREENKRAFT, INC. - Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities: | ||
Net loss | $ (792,962) | $ (738,939) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Contributed officer salary | 36,000 | 72,000 |
Amortization of debt discount from beneficial conversion feature | 15,000 | |
Depreciation expense | 8,205 | 10,943 |
Change in operating assets and liabilities: | ||
Accounts receivable | 276,134 | (123,925) |
Inventory | 180,062 | 551,646 |
Prepaid expense | 19,233 | |
Accounts payable | (1,148,032) | 1,126,133 |
Accounts payable - related party | 87,500 | 330,000 |
Accrued expense | 39,364 | 15,879 |
Deferred income | (100,475) | (1,109,935) |
Deferred Rent Expense | 9,332 | |
Net cash provided by (used in) Operating Activities | (1,389,872) | 153,035 |
Investing Activities: | ||
(Increase) decrease in restricted cash | 1,506,152 | (4,511) |
Net cash provided by (used in) Investing Activities | 1,506,152 | (4,511) |
Financing Activities: | ||
Repayments under line of credit | (1,998,850) | (708) |
Net Cash used in Financing Activities | (1,998,850) | (708) |
Net increase (decrease) in cash | (1,882,570) | 147,816 |
Cash, at beginning of period | 2,261,648 | 2,113,832 |
Cash, at end of period | 379,078 | 2,261,648 |
Non-Cash Transactions | ||
Contributed officer salary | 36,000 | 72,000 |
Notes Payable issued for services received | 15,000 | |
Supplemental cash flow information: | ||
Cash paid for interest | 15,394 | 105,133 |
Cash paid for income taxes | $ 800 |
Note 1 - Organization and Busin
Note 1 - Organization and Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 1 - Organization and Business and Significant Accounting Policies | NOTE 1 ORGANIZATION AND BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business Greenkraft, Inc. is a manufacturer and distributor of automotive products. We manufacture commercial forward cabin trucks for vehicles weighing from 14,001 lbs. to 33,000 lbs. in alternative fuels. We also manufacture and sell alternative fuel systems to convert petroleum-based fuels to natural gas and propane fuels. Basis of Presentation The accompanying financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily requires management to make estimates and assumptions that affect the amounts reported in the financial statements. We regularly evaluate estimates and judgments based on historical experience and other relevant facts and circumstances. Actual results could differ from those estimates. Concentration of credit risk Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and trade receivables. The Company places its cash with high credit quality financial institutions. At times, such cash may be in excess of the FDIC limit. With respect to trade receivables, the Company routinely assesses the financial strength of its customers and, as a consequence, believes that the receivable credit risk exposure is limited. Cash and cash equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. We do have restricted cash in the amount of $1,506,152 as of December 31, 2015, which will be utilized for a stand by letter of credit requested by suppliers. Accounts Receivable Trade accounts receivable consist of amounts due from the sale of trucks. Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 90 days of receipt of the invoice. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts based on historical collection experience and a review of the current status of trade accounts receivable. At December 31, 2016 and 2015, the Company characterized $0 and $0 as uncollectible, respectively. At December 31, 2016, the accounts receivable represents one customer from the sale of trucks. Inventories Inventories are primarily raw materials. Inventories are valued at the lower of, cost as determined on a first-in-first-out (FIFO) basis, or market. Market value is determined by reference to selling prices after the balance sheet date or to managements estimates based on prevailing market conditions. Management writes down the inventories to market value if it is below cost. Management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if valuation allowance is required. Costs of raw material inventories include purchase and related costs incurred in bringing the products to their present location and condition. The estimated cost of inventory not expected to be converted to cash within one year is reflected as Inventory, long term in the balance sheet. Property and equipment Property and equipment are carried at the cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are ten years for all the equipments held by the Company. Depreciation expense of $8,205 and $10,943 are recognized for the year ended December 31, 2016 and 2015. Research and development Costs incurred in connection with the development of new products and manufacturing methods are charged to selling, general and administrative expenses as incurred. During the years ended December 31, 2016 and 2015, $17,545 and $55,956, respectively, were expensed as research and development costs. Long Lived Assets In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360, Property, Plant and Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. Revenue recognition Greenkraft recognizes revenue when persuasive evidence of an arrangement exists, products and/or services have been delivered, the sales price is fixed or determinable, and collectability is reasonably assured. This typically occurs when the product is shipped or delivered to the customer. Cash payments received prior to delivery of products are deferred until the products are delivered. Also, there was funding for the incremental cost of the vehicles was provided by the California Energy Commission (CEC). The CEC provides up to (i) $20,000 per vehicle that are up to 26,000 LBS GVWR and (ii) $26,000 per vehicle that are over 26,000 LBS GVWR. These funds are paid directly to us and taken in as deposits until actual delivery of the vehicles at which time it is deemed revenue. The Company has received $1.140 million from the CEC related to the sale of CNG and propane trucks as of December 31, 2016 and 2015. Income taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We have net operating loss carry forwards available to reduce future taxable income. Future tax benefits for these net operating losses carry forwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax benefit, a valuation allowance is established. Earning or Loss per Share The Company accounts for earnings per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year. As there was a net loss for the year ended December 31, 2016 and 2015, basic and diluted losses per share are the same for the year ended December 31, 2016 and 2015. Related Parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. Recently issued accounting pronouncements In August 2014, the Financial Accounting Standards Board ("FASB") issued a new standard on disclosure of uncertainties about an entity's ability to continue as a going concern. The new standard provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements. Additionally, an entity must provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern. The new standard will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016, and for annual period and interim periods thereafter. The adoption of this guidance did not have a significant impact on the Companys financial statement. In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The Company is currently assessing the effects this guidance may have on its financial statements. Other recently issued accounting standards are not expected to have a material effect on the Company's financial statements. |
Note 2 - Related Party Transact
Note 2 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 2 - Related Party Transactions | NOTE 2 RELATED PARTY TRANSACTIONS First Standard Real Estate LLC is the owner of 2530 S. Birch Street, Santa Ana, California 92707 where Greenkraft uses office space. The CEO is an owner of First Standard Real Estate. As of September 1, 2016 Greenkraft moved close to its headquarters at 2530 South Birch Street Santa Ana Ca 92707 for a rent fee of $10,000 per month. The rental agreement is a lease starting September 1, 2016 to September 30, 2021. The month of September, 2016 was free and the remaining time frame in 2016 rent expense payable to First Standard Real Estate is $30,000 with a deferred rent expense of $9,833 per month due to one month being free. The space that Greenkraft is rented has access to a larger portion for expansion when needed. The Defiance Company, LLC is owned by our CEO. As of December 31, 2016 and December 31, 2015, accounts payable to Defiance is $285,389 and $285,389, respectively, for amounts paid by Defiance Company, LLC on behalf of Greenkraft. As of December 31, 2016 and December 31, 2015 Greenkraft owed a total of $1,901,916 and $1,901,916, respectively, to our owner and his related entities. All amounts are due on demand, unsecured and do not bear interest. G&K Automotive Conversion Inc. is an automotive safety compliance company that can provide services to Greenkraft as necessary. No Services were provided by G&K for Greenkraft during the years ended December 31, 2016, or 2015. CEE, LLC performed testing for Greenkraft for engine certifications and also shared employees with Greenkraft. Our President is an owner of CEE, LLC. During 2016, and 2015, Greenkraft recognized $0 and $0, respectively, of contributed payroll expense related to the shared employees. Also Greenkraft owes CEE for insurance that CEE paid for employees of Greenkraft in the amount of $5,945 as of December 31, 2016 and 2015. First Warner Properties LLC is the owner of 2215 S Standard Ave Santa Ana CA 92707. Our president is a member of First Warner. Greenkraft leased the property as assembly plant from First Warner. The term of the lease agreement was from July 1, 2015 to December 31, 2019, with a monthly rent of $27,500. The total rent expense for December 31, 2016 and 2015 was $204,332 and $330,000, respectively. As of December 31, 2016 First Warner Properties LLC was owed $525,000 and for 2015 the amount owed was $467,500. Our CEO does not charge us a salary and therefore we have recognized $36,000 and $72,000 for 2016 and 2015, respectively of contributed salary expense. |
Note 3 - Property and Equipment
Note 3 - Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 3 - Property and Equipment | NOTE 3 PROPERTY AND EQUIPMENT For the years ended December 31, 2016 and 2015, depreciation expense of fixed assets totaled approximately $10,940 and $10,943, December 31, 2016 December 31, 2015 Equipment $ 109,428 $ 109,428 Less Accumulated Depreciation $ (35,815) $ (27,610) Total $ 73,613 $ 81,818 |
Note 4 - Inventories
Note 4 - Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 4 - Inventories | NOTE 4 INVENTORIES Greenkrafts 2016 inventory is $1,354,866 and long term assets is $539,229. For Greenkrafts 2015, the inventory was $1,452,218 and long term assets were $621,939. December 31, 2016 December 31, 2015 Raw materials $ 1,894,095 $ 1,963,404 Finished goods - 110,753 Total Inventory 1.894,095 2,074,157 Less carrying value of inventory not deemed to be current 539.229 621,939 Inventories, included in current assets $ 1,354,866 $ 1,452,218 At the end of each reporting period, management has estimated that portion of inventory not expected to be converted to cash within one year and reflected that amount as Inventory, long term in the accompanying balance sheets. |
Note 5 - Line of Credit
Note 5 - Line of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 5 - Line of Credit | NOTE 5 LINE OF CREDIT In March 2012, Greenkraft entered into an agreement with Pacific Premier Bank for a $3,500,000 line of credit. The line of credit was due on April 10, 2013 and bears interest at the prime rate plus 1%. The line of credit is secured by certain real property owned by the majority shareholder and inventory. A condition to the line of credit is a full banking relationship. If the conditions are not met or should cease to be met, then interest rate and interest ceiling provided under the note shall immediately increase by 5.000 percentage points. As of December 31, 2015 Greenkraft was deemed to have a full banking relationship with Pacific Premier Bank. On July 15, 2013, the maturity date of the facility was extended to December 10, 2013 and the maximum amount available under such facility was reduced to $2 million. On August 22, 2014, Greenkraft entered into a Loan Modification Agreement with Pacific Premier Bank under which it extended the Maturity Date until August 22, 2015. The cost to modify the loan for 2014 was $4,052.50. In addition, Pacific Premier Bank agreed to issue a $3,000,000 standby letter of credit in favor a supplier from whom Greenkraft purchases products in connection with its production of alternative fuel trucks. In connection with this letter of credit, Greenkraft authorized Pacific Premier to draw an additional $1,500,000 under its note for any funds paid or required to be paid by Pacific Premier under the letter of credit. Thus the current maximum amount available under the line of credit is $3,500,000. There was a fee of $30,000 in connection with the letter of credit. In addition Greenkraft has a restricted deposit of $1,500,000 with pacific premier that is being used as collateral for letter of credit. The letter of credit expired in August 2015 and was automatically renewed for another year. In 2014 the $30,000 fee is classified as deferred financing cost on balance sheet, and it is amortized over the term of the letter of credit. On September 21, 2015, Greenkraft entered into a short term extension with Pacific Premier Bank under which it extended the Maturity Date of its line until December 10, 2015. On January 14, 2016 Greenkraft entered into a short term extension with Pacific Premier Bank under which it extended the Maturity Date of its the line of credit to March 10, 2016. In March 2016, the Company cancelled the letter of credit of $3,500,000 and paid off the line of credit of $2,000,000 with Pacific Premier Bank. Due to the cancellation of letter of credit, the Company no longer require a restricted cash balance. The Company analyzed the modification of the term under ASC 470-60 Trouble Debt Restructurings and ASC 470-50 Extinguishment of Debt. The Company determined the modification is not substantial and did not result in an extinguishment. Along with the short term extension on September 21, 2015, and on January 14, 2016 the Company acknowledged that it was in breach of (a) its covenant to maintain a ratio of Global Debt Coverage in excess of 1.250 to 1.0, (b) its covenant to maintain a ratio of Business Debt Coverage Ratio in excess of 1.25 to 1; (c) its covenant to maintain a ratio of Debt/Worth not in excess of 3.0 to 1.0 and (d) its covenant to maintain a Tangible Net Worth of not less than $350,000 (collectively the Covenant Violations). Pacific Premier agreed to forbear enforcement of its rights arising out of these Covenant Violations until receipt of the Companys financial statements for the year ended December 31, 2016. During 2016, the Company did not make any draws. The total amount borrowed under the line of credit was $1,998,850 as of December 31, 2015. As of December 31, 2016 the line of credit was paid in full. |
Note 6 - Convertible Notes
Note 6 - Convertible Notes | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 6 - Convertible Notes | NOTE 6 CONVERTIBLE NOTES Convertible promissory notes were issued in the aggregate amount of $15,000 in October 2015 for the marketing and advertising services received in 2015. During the quarter ended March 31, 2016, the Company re-classed the balance from accounts payable to notes payable. The term of the notes is due on demand. Simple interest of 1% is payable upon demand. Prior to maturity the notes may be converted for common stock at a conversion price of $0.001. The Company evaluated the embedded conversion feature within the above convertible notes under ASC 815-15 and ASC 815-40 and determined embedded conversion feature does not meet the definition of a liability. Then the Company evaluated the conversion feature for a beneficial conversion feature at inception. The Company accounted for the intrinsic value of a Beneficial Conversion Feature inherent to the convertible note payable and a total debt discount of $15,000 was recorded. During the year ended December 31, 2016, debt discount of $15,000 was amortized. As of December 31, 2016 convertible note has a balance of $7,500 net of $0 unamortized debt discount. On April 22, 2016, the holder of convertible note converted $ 7,500 of convertible note payable to 7,500,000 common shares. |
Note 7- Common Stock
Note 7- Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 7- Common Stock | NOTE 7- COMMON STOCK As of December 31 2016 and 2015, the Company had 400,000,000 Common shares authorized with a par value of $0.0001 per share, of which 96,432,718 and 88,882,718 shares were issued and outstanding, respectively. On April 22, 2016, the holder of convertible note converted $7,500 of convertible note payable to 7,500,000 common shares. |
Note 8 - Major Customers
Note 8 - Major Customers | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 8 - Major Customers | NOTE 8 MAJOR CUSTOMERS In 2016, the Company had four customers each making up 10% or more of total truck sales revenue. The customers individually made up 16%, 25%, 12% and 14%. The remaining revenues were from several vehicle dealers for conversions of Isuzu and Ford trucks at a percentage of 33%. In 2015, the Company had two customers each making up 10% or more of total truck sales revenue. The customers individually made up 52% and 21%. The remaining revenues were from several truck customers and dealers for Greenkraft trucks and conversions of Isuzu trucks at a percentage of 8%. |
Note 9 - Commitment and Conting
Note 9 - Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 9 - Commitment and Contingencies | NOTE 9 COMMITMENT AND CONTINGENCIES Greenkraft has a lease agreement with First Standard Real Estate LLC for rent. See Note 2. Future rental payments payable to the landlord under the lease as of December 31, 2016 were as follows: 2017 $ 117,996 2018 $ 117,996 2019 $ 117,996 2020 $ 117,996 2021 $ 88,497 Total $ 560,481 |
Note 10 - Provision For Income
Note 10 - Provision For Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 10 - Provision For Income Taxes | NOTE 10 PROVISION FOR INCOME TAXES Greenkraft uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During fiscal 2016, the company incurred net losses and, therefore, had no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. As of December 31, 2016, the tax years 2013 through 2015, and 2011 through 2015 are subject to examination by the federal and California taxing authorities, respectively. At December 31, 2016 and 2015, deferred tax assets consisted of the following: December 31, 2016 December 31, 2015 Deferred tax assets $ 1,593,960 $ 1,105,806 Less: Valuation allowance (1,593,960) (1,105,806) Net deferred tax assets $ - $ - December 31, 2016 December 31, 2015 Accumulated net operating loss $ 4,688,119 $ 3,252,371 Tax rate 34% 34% Deferred tax assets $ 1,593,960 $ 1,105,806 |
Note 11 - Liquidity
Note 11 - Liquidity | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 11 - Liquidity | NOTE 11 - LIQUIDITY The accompanying financial statements have been prepared in accordance to FASB Subtopic 205-40, Presentation of Financial StatementsGoing Concern. In connection with preparing financial statements for each annual and interim reporting period, an entitys management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Greenkrafts management evaluated the current financial situation of the company and believes the company has no going concern within one year . During the year ended December 31, 2016, the Company incurred a loss from continuing operation of $777,416 and a net loss $792,962, and the stockholders deficit was $2,456,288 and the working capital deficit was $3,061,130. The working capital deficit have been majority funded by accounts payable to its related parties and related party debt. Based on the financial support letter from the CEO of Greenkraft, he and his related party entities, has no present or future plans or intentions to (A) liquidate Greenkraft, Inc.; (B) sell or otherwise dispose of all, or a significant portion of, its investment in the Company or otherwise change its capital structure; (C) discontinue providing financial support to Greenkraft, Inc; or (D) pursue the collection if the company has cash flow issues. Also, the company has 1.7 million government incentives as deferred revenue in current liability. Based on the cash burn calculation, the Company is expected to have sufficient cash flow to cover the normal business operation for the twelve month-ended December 31, 2017. In the next 12 months, the Company will continue to receive sales orders, recognize revenue by selling the qualified trucks for the government incentive program, committed financial support from the owner and his related parties to fund its ongoing operation until the Company is able to meet its own obligation as they become due. Management believes they will have sufficient funds to support their business based on the following: (a) revenues derived from signing up new dealers contracts and delivering alternative fuel trucks to them; (b) reclassify accounts payable- related parties and related parties debt as non- current liabilities in amount of $816,334 and $1,901,916, respectively, which is related to the financial support letter from the CEO, and (c) the CEO can raise additional funds needed to support our business plan. Management intends to seek new capital from owners and related parties to provide needed funds, as necessary. However, there can be no assurance that the Company can raise any additional funds, or if it can, that such funds will be on terms acceptable to the Company. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note 12 - Subsequent Events
Note 12 - Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 12 - Subsequent Events | NOTE 12 SUBSEQUENT EVENTS There are no subsequent events to disclosure. |
Note 1 - Organization and Bus19
Note 1 - Organization and Business and Significant Accounting Policies: Nature of Business. (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Nature of Business. | Nature of Business Greenkraft, Inc. is a manufacturer and distributor of automotive products. We manufacture commercial forward cabin trucks for vehicles weighing from 14,001 lbs. to 33,000 lbs. in alternative fuels. We also manufacture and sell alternative fuel systems to convert petroleum-based fuels to natural gas and propane fuels. |
Note 1 - Organization and Bus20
Note 1 - Organization and Business and Significant Accounting Policies: Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). |
Note 1 - Organization and Bus21
Note 1 - Organization and Business and Significant Accounting Policies: Reclassifications (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. |
Note 1 - Organization and Bus22
Note 1 - Organization and Business and Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily requires management to make estimates and assumptions that affect the amounts reported in the financial statements. We regularly evaluate estimates and judgments based on historical experience and other relevant facts and circumstances. Actual results could differ from those estimates. |
Note 1 - Organization and Bus23
Note 1 - Organization and Business and Significant Accounting Policies: Concentration of Credit Risk (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Concentration of Credit Risk | Concentration of credit risk Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and trade receivables. The Company places its cash with high credit quality financial institutions. At times, such cash may be in excess of the FDIC limit. With respect to trade receivables, the Company routinely assesses the financial strength of its customers and, as a consequence, believes that the receivable credit risk exposure is limited. |
Note 1 - Organization and Bus24
Note 1 - Organization and Business and Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Cash and Cash Equivalents | Cash and cash equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. We do have restricted cash in the amount of $1,506,152 as of December 31, 2015, which will be utilized for a stand by letter of credit requested by suppliers. |
Note 1 - Organization and Bus25
Note 1 - Organization and Business and Significant Accounting Policies: Accounts Receivable (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Accounts Receivable | Accounts Receivable Trade accounts receivable consist of amounts due from the sale of trucks. Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 90 days of receipt of the invoice. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts based on historical collection experience and a review of the current status of trade accounts receivable. At December 31, 2016 and 2015, the Company characterized $0 and $0 as uncollectible, respectively. At December 31, 2016, the accounts receivable represents one customer from the sale of trucks. |
Note 1 - Organization and Bus26
Note 1 - Organization and Business and Significant Accounting Policies: Inventories (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Inventories | Inventories Inventories are primarily raw materials. Inventories are valued at the lower of, cost as determined on a first-in-first-out (FIFO) basis, or market. Market value is determined by reference to selling prices after the balance sheet date or to managements estimates based on prevailing market conditions. Management writes down the inventories to market value if it is below cost. Management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if valuation allowance is required. Costs of raw material inventories include purchase and related costs incurred in bringing the products to their present location and condition. The estimated cost of inventory not expected to be converted to cash within one year is reflected as Inventory, long term in the balance sheet. |
Note 1 - Organization and Bus27
Note 1 - Organization and Business and Significant Accounting Policies: Property and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Property and Equipment | Property and equipment Property and equipment are carried at the cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are ten years for all the equipments held by the Company. Depreciation expense of $8,205 and $10,943 are recognized for the year ended December 31, 2016 and 2015. |
Note 1 - Organization and Bus28
Note 1 - Organization and Business and Significant Accounting Policies: Research and Development (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Research and Development | Research and development Costs incurred in connection with the development of new products and manufacturing methods are charged to selling, general and administrative expenses as incurred. During the years ended December 31, 2016 and 2015, $17,545 and $55,956, respectively, were expensed as research and development costs. |
Note 1 - Organization and Bus29
Note 1 - Organization and Business and Significant Accounting Policies: Long Lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Long Lived Assets | Long Lived Assets In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360, Property, Plant and Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. |
Note 1 - Organization and Bus30
Note 1 - Organization and Business and Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Revenue Recognition | Revenue recognition Greenkraft recognizes revenue when persuasive evidence of an arrangement exists, products and/or services have been delivered, the sales price is fixed or determinable, and collectability is reasonably assured. This typically occurs when the product is shipped or delivered to the customer. Cash payments received prior to delivery of products are deferred until the products are delivered. Also, there was funding for the incremental cost of the vehicles was provided by the California Energy Commission (CEC). The CEC provides up to (i) $20,000 per vehicle that are up to 26,000 LBS GVWR and (ii) $26,000 per vehicle that are over 26,000 LBS GVWR. These funds are paid directly to us and taken in as deposits until actual delivery of the vehicles at which time it is deemed revenue. The Company has received $1.140 million from the CEC related to the sale of CNG and propane trucks as of December 31, 2016 and 2015. |
Note 1 - Organization and Bus31
Note 1 - Organization and Business and Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Income Taxes | Income taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We have net operating loss carry forwards available to reduce future taxable income. Future tax benefits for these net operating losses carry forwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax benefit, a valuation allowance is established. |
Note 1 - Organization and Bus32
Note 1 - Organization and Business and Significant Accounting Policies: Earning Or Loss Per Share (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Earning Or Loss Per Share | Earning or Loss per Share The Company accounts for earnings per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year. As there was a net loss for the year ended December 31, 2016 and 2015, basic and diluted losses per share are the same for the year ended December 31, 2016 and 2015. |
Note 1 - Organization and Bus33
Note 1 - Organization and Business and Significant Accounting Policies: Related Parties (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Related Parties | Related Parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
Note 1 - Organization and Bus34
Note 1 - Organization and Business and Significant Accounting Policies: Recently Issued Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements In August 2014, the Financial Accounting Standards Board ("FASB") issued a new standard on disclosure of uncertainties about an entity's ability to continue as a going concern. The new standard provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements. Additionally, an entity must provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern. The new standard will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016, and for annual period and interim periods thereafter. The adoption of this guidance did not have a significant impact on the Companys financial statement. In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The Company is currently assessing the effects this guidance may have on its financial statements. Other recently issued accounting standards are not expected to have a material effect on the Company's financial statements. |
Note 3 - Property and Equipme35
Note 3 - Property and Equipment: Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Property, Plant and Equipment | December 31, 2016 December 31, 2015 Equipment $ 109,428 $ 109,428 Less Accumulated Depreciation $ (35,815) $ (27,610) Total $ 73,613 $ 81,818 |
Note 4 - Inventories_ Schedule
Note 4 - Inventories: Schedule of Inventory, Current (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Inventory, Current | December 31, 2016 December 31, 2015 Raw materials $ 1,894,095 $ 1,963,404 Finished goods - 110,753 Total Inventory 1.894,095 2,074,157 Less carrying value of inventory not deemed to be current 539.229 621,939 Inventories, included in current assets $ 1,354,866 $ 1,452,218 |
Note 9 - Commitment and Conti37
Note 9 - Commitment and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | 2017 $ 117,996 2018 $ 117,996 2019 $ 117,996 2020 $ 117,996 2021 $ 88,497 Total $ 560,481 |
Note 10 - Provision For Incom38
Note 10 - Provision For Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2016 December 31, 2015 Deferred tax assets $ 1,593,960 $ 1,105,806 Less: Valuation allowance (1,593,960) (1,105,806) Net deferred tax assets $ - $ - |
Note 10 - Provision For Incom39
Note 10 - Provision For Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | December 31, 2016 December 31, 2015 Accumulated net operating loss $ 4,688,119 $ 3,252,371 Tax rate 34% 34% Deferred tax assets $ 1,593,960 $ 1,105,806 |
Note 1 - Organization and Bus40
Note 1 - Organization and Business and Significant Accounting Policies: Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Depreciation expense | $ 8,205 | $ 10,943 |
Note 1 - Organization and Bus41
Note 1 - Organization and Business and Significant Accounting Policies: Research and Development (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Research and development | $ 17,545 | $ 55,956 |
Note 2 - Related Party Transa42
Note 2 - Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts payable - related party | $ 846,334 | $ 758,834 |
Contributed Salary Expense | 36,000 | 72,000 |
Defiance Company, LLC - Owned by CEO | ||
Accounts payable - related party | 285,389 | 285,389 |
Owner and His Related Entities | ||
Accounts payable - related party | 1,901,916 | 1,901,916 |
CEE, LLC - Owned by President | ||
Accounts payable - related party | 5,945 | |
First Warner Properties LLC - Related by President | Lease Agreements | ||
Accounts payable - related party | $ 525,000 | 467,500 |
Description of Related Party Leasing Arrangements | The term of the lease agreement was from July 1, 2015 to December 31, 2019, with a monthly rent of $27,500 | |
Operating Leases, Rent Expense | $ 204,332 | $ 330,000 |
Note 3 - Property and Equipme43
Note 3 - Property and Equipment: Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Machinery and Equipment, Gross | $ 109,428 | $ 109,428 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (35,815) | (27,610) |
Property and equipment, net | $ 73,613 | $ 81,818 |
Note 4 - Inventories_ Schedul44
Note 4 - Inventories: Schedule of Inventory, Current (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Inventory, Raw Materials, Gross | $ 1,894,095 | $ 1,963,404 |
Inventory, Finished Goods, Gross | 110,753 | |
Inventory, Gross | 1.894095 | 2,074,157 |
Other Inventory, Noncurrent | 539.229 | 621,939 |
Other Inventory, Gross | $ 1,354,866 | $ 1,452,218 |
Note 5 - Line of Credit (Detail
Note 5 - Line of Credit (Details) - Pacific Premier Bank - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 30, 2016 | Dec. 31, 2014 | Aug. 22, 2014 | Mar. 31, 2012 | |
Long-term Line of Credit | $ 3,500,000 | |||
Cancellation of Letter of Credit | $ 3,500,000 | |||
Repayments of Lines of Credit | $ 2,000,000 | |||
Line of Credit | ||||
Line of Credit Facility, Commitment Fee Description | The cost to modify the loan for 2014 was $4,052.50. | |||
Letter of Credit Issued in Favor of Supplier | $ 3,000,000 | |||
Additional Line of Credit Borrowed | 1,500,000 | |||
Deferred Finance Costs, Current, Net | 30,000 | |||
Restricted Cash and Cash Equivalents, Current | $ 1,500,000 |
Note 6 - Convertible Notes (Det
Note 6 - Convertible Notes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Long-term Debt, Gross | $ 15,000 | |
Debt Instrument, Convertible, Conversion Price | $ 0.001 | |
Amortization of debt discount from beneficial conversion feature | $ 15,000 | |
Covertible note payable | $ 7,500 | |
Shares Issued from Convertible Notes Payable, Shares | 7,500,000 |
Note 7- Common Stock (Details)
Note 7- Common Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | |
Common Stock, Shares Outstanding | 96,432,718 | 88,882,718 |
Covertible note payable | $ 7,500 | |
Shares Issued from Convertible Notes Payable, Shares | 7,500,000 |
Note 9 - Commitment and Conti48
Note 9 - Commitment and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2016USD ($) |
Details | |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 117,996 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 117,996 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 117,996 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 117,996 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 88,497 |
Long-term Debt | $ 560,481 |
Note 10 - Provision For Incom49
Note 10 - Provision For Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Deferred Tax Assets, Gross | $ 1,593,960 | $ 1,105,806 |
Deferred Tax Assets, Valuation Allowance | $ (1,593,960) | $ (1,105,806) |
Note 10 - Provision For Incom50
Note 10 - Provision For Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 4,688,119 | $ 3,252,371 |
Effective Income Tax Rate Reconciliation, Percent | 34.00% | 34.00% |
Deferred Tax Assets, Other | $ 1,593,960 | $ 1,105,806 |