| Accounting policies and procedures | Note
2 – Accounting policies and procedures Principles
of consolidation For
the years ended December 31, 2021 and 2020, the consolidated financial statements include the accounts of Blue Line Protection Group,
Inc. (formerly The Engraving Masters, Inc.), Blue Line Advisory Services, Inc. (a Nevada corporation; “BLAS”), Blue Line
Capital, Inc. (a Colorado corporation; “Blue Line Capital”), Blue Line Protection Group (California), Inc. (a California
corporation; “Blue Line California”), Blue Line Colorado, Blue Line Protection Group Illinois, Inc. (an Illinois corporation;
“Blue Line Illinois”), BLPG, Inc. (a Nevada corporation; “Blue Line Nevada”), Blue Line Protection Group (Washington),
Inc. (a Washington corporation; “Blue Line Washington”). All significant intercompany balances and transactions have been
eliminated. BLPG and its subsidiaries are collectively referred herein to as the “Company.” Basis
of presentation The
financial statements present the balance sheets, statements of operations, stockholder’s equity (deficit) and cash flows of the
Company. The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the
United States of America. The
Company has adopted December 31 as its fiscal year end. Use
of estimates The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ
from those estimates. Cash
and cash equivalents The
Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose
of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be
cash equivalents. As of March 31, 2022 the Company has cash in excess of FDIC insured limits of $ 341,786 .
There were no
cash equivalents as of March 31, 2022 or
December 31, 2021. Accounts
receivable Accounts
receivable are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides
for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for
doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts
receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in
the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful
accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account
balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered
remote. Allowance
for uncollectible accounts The
Company estimates losses on receivables based on known troubled accounts, if any, and historical experience of losses incurred. There
was no Property
and equipment Property
and equipment is recorded at cost and capitalized from the initial date of service. Expenditures for major additions and improvements
are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired
or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included
in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets
using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated)
for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows: Schedule
of Estimated useful Lives of Property and Equipment
Automotive Vehicles 5 years
Furniture and Equipment 7 years
Buildings and Improvements 10 years The
Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying
value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.
In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an
amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment
include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand,
competition and other economic factors. Based on this assessment there was no 24,081 28,431 Impairment
of long-lived assets The
Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of
Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the historical cost or carrying value of an asset may no longer be appropriate. The Company assesses recoverability
of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition.
If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between
the asset’s carrying value and its fair value or disposable value. As of March 31, 2022 and December 31, 2021, the Company determined
that none of its long-lived assets were impaired. Concentration
of business and credit risk The
Company has no significant off-balance sheet risks such as foreign exchange contracts, option contracts or other hedging arrangements.
The Company’s financial instruments that are exposed to concentration of credit risks consist primarily of cash. The Company maintains
its cash in bank accounts, which may at times, exceed federally insured limits. The
Company had one major customer which generated 27.8 36.9 The
Company had one major customer which generated 20 35 Related
party transactions FASB
ASC 850, “Related Party Disclosures” requires companies to include in their financial statements disclosures of material
related party transactions. The Company discloses all material related party transactions. Related parties are defined to include any
principal owner, director or executive officer of the Company and any immediate family members of a principal owner, director or executive
officer. Fair
value of financial instruments The
carrying amounts reflected in the balance sheets for cash, accounts payable and related party payables approximate the respective fair
values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale. As
required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in
active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;
and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The
three levels of the fair value hierarchy are described below:
Level
1: Unadjusted
quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level
2: Quoted
prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term
of the asset or liability;
Level
3: Prices
or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by
little or no market activity). The
following table presents the derivative financial instruments, the Company’s only financial liabilities, measured and recorded
at fair value on the Company’s consolidated balance sheet on a recurring basis, and their level within the fair value hierarchy
as of March 31, 2022 and December 31, 2021: March
31, 2022 Schedule of Fair Value of Liabilities Measured on Recurring Basis
Amount Level 1 Level 2 Level 3
Embedded conversion derivative liability $ 811,572 $ - $ - $ 811,572
Warrant derivative liabilities $ - $ - $ - $ -
Total $ 811,572 $ - $ - $ 811,572 December
31, 2021
Amount Level 1 Level 2 Level 3
Embedded conversion derivative liability $ 712,784 $ - $ - $ 712,784
Warrant derivative liabilities $ - $ - $ - $ -
Total $ 712,784 $ - $ - $ 712,784 The
embedded conversion feature in the convertible debt instruments that the Company issued that became convertible qualified them as derivative
instruments since the number of shares issuable under the notes are indeterminate based on guidance in FASB ASC 815, Derivatives and
Hedging. These convertible notes tainted all other equity linked instruments including outstanding warrants and fixed rate convertible
debt on the date that the instrument became convertible. The valuation of the derivative liability of the warrants was determined through
the use of Black Scholes option-pricing model (See Note 8). Revenue
Recognition The
Company recognizes revenue when delivery of the promised goods or services is transferred to its customers in an amount that reflects
the consideration that the Company expects to be entitled to in exchange for those goods or services. We determine revenue recognition
through the following five steps:
● Identify
the contract with the customer;
● Identify
the performance obligations in the contract;
● Determine
the transaction price;
● Allocate
the transaction price to the performance obligations in the contract; and
● Recognize
revenue when, or as, the performance obligations are satisfied. We
generate substantially all our revenue from providing services to customers. The Company records revenue when the 5 steps above have
been completed. Effective
January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition
requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics
of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising
from contracts with customers. The Company adopted the standard using the modified retrospective approach effective January 1, 2018.
The adoption of these standards did not have an impact on the Company’s Statements of Operations for the year ended December 31,
2018. In
general, the Company’s business segmentation is aligned according to the nature and economic characteristics. Revenue is characterized
by several lines of services and typically the pricing is fixed. Schedule of Revenue by Major Customers by Reporting Segments
Revenue Breakdown by Streams 2022 2021
Three months ended March 31,
Revenue Breakdown by Streams 2022 2021
Service: Transportation $ 390,026 $ 459,311
Service: Currency Processing 605,107 697,911
Service: Compliance 5,123 9,320
Total $ 1,000,256 $ 1,166,542 Advertising
costs The
Company expenses all advertising expenses as incurred. For the three months ended March 31, 2022 and 2021 the Company expensed
$ 0 . General
and administrative expenses The
significant components of general and administrative expenses consist mainly of rent and compensation. Share-Based
Compensation Share-based
compensation expense is recorded as a result of stock options granted in return for services rendered. Previously, the share-based payment
arrangements with employees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services are
accounted for under ASC 505-50. ASC 505-50 differs significantly from ASC 718. On June 20, 2018, the FASB issued ASU 2018-07, which simplifies
the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments
to nonemployees would be aligned with the requirements for share-based payments granted to employees. The Company has adopted the new
standard and has made some adjustment with regard to the share-based compensation costs. Under the ASU 2018-07, the measurement of equity-classified
nonemployee share-based payments is generally fixed on the grant date and the options are no longer revalued on each reporting date.
The expenses related to the share-based compensation are recognized on each reporting date. The amount is calculated as the difference
between total expenses incurred and the total expenses already recognized. Cost
of Revenue The
Company’s cost of revenue primarily consists of labor, fuel costs and items purchased by the Company specifically for the benefit
of the Company’s clients. Basic
and Diluted Earnings per share Net
loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic loss per share is computed by
dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted
income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes
all potential common shares if their effect is anti-dilutive. For the periods presented all common stock equivalents were excluded from
the calculation of diluted loss per share as their effect would be anti-dilutive. Dividends The
Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception. Income
Taxes The
Company follows FASB Codification Topic 740-10-25 (ASC 740-10-25) for recording the provision for income taxes. Deferred tax assets and
liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using
the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax
expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred
tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the
provision for deferred income taxes in the period of change. Deferred
income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities
to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified
as current or non-current depending on the periods in which the temporary differences are expected to reverse. Recent
Pronouncements In
February 2016, the FASB issued ASU 2016-02, Leases The
Company evaluated all other recent accounting pronouncements issued and determined that the adoption of these pronouncements would not
have a material effect on the financial position, results of operations or cash flows of the Company. |
