x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: | December 29, 2013 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to ___________. |
Commission File Number: | 000-54226 |
![](https://capedge.com/proxy/10-K/0001188112-14-000895/t78659001_v2.jpg)
AMERICAN RESTAURANT CONCEPTS, INC. |
(Exact Name of registrant as specified in its charter) |
Florida | 59-3649554 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
212 Guilbeau Road Lafayette, LA | 70506 | |
(Address of principal executive offices) | (Zip Code) |
(904) 741-5500 |
(Registrant’s Telephone Number, Including Area Code) |
Securities registered under Section 12(b) of the Act: |
Title of each class: | Name of each exchange on which registered: | |
None | Not Applicable |
Securities registered pursuant to Section 12(g) of the Act: |
Class A Common Stock, $.01 par value per share |
(Title of Class) |
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer (Do not check if a smaller reporting company) o | Smaller reporting company x |
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● | our ability to fund our future growth and implement our business strategy; |
● | market acceptance of our restaurants and products; |
● | food safety issues and other health concerns; |
● | the cost of food and other commodities; |
● | shortages or interruptions in the availability and delivery of food and other supplies; |
● | our ability to maintain and increase the value of our Dick’s Wings® brand; |
● | changes in consumer preferences; |
● | our ability to identify, attract and retain qualified franchisees; |
● | our franchisees’ ability to identify suitable restaurant sites and open new restaurants; |
● | our franchisees’ ability to open new restaurants and operate them in a profitable manner; |
● | our limited control over the activities of our franchisees; |
● | our ability to identify, acquire and integrate new restaurant brands and businesses; |
● | our ability to comply with applicable federal, state and local laws and regulations; |
● | competition and consolidation in the restaurant industry; |
● | our ability to protect our trademarks and other intellectual property; |
● | the effects of litigation on our business; |
● | the condition of the securities and capital markets generally; |
● | economic conditions in the jurisdictions in which we operate and nationally; |
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● | local market demographics, population density and psychographic profiles; |
● | occupancy rates and projected growth rates in the trade area; |
● | the location and performance of big box retailers and nationally branded peers; |
● | available square footage, parking and lease economics; |
● | local investment and operating costs; |
● | development and expansion constraints; |
● | vehicle traffic patterns, visibility and access; |
● | regional consumer trends and preferences; |
● | those characteristics that are similar to our most successful existing restaurants; and |
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● | other quantitative and qualitative measures. |
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● | our ability to accurately assess the value, growth potential, strengths, weaknesses, contingent and other liabilities, and potential profitability of the target businesses and assets; |
● | our ability to complete the transaction and integrate the operations, technologies, services and personnel of any businesses or assets acquired; |
● | costs associated with the completion of the transaction and the integration of the businesses or assets acquired; |
● | our ability to generate sufficient revenue to offset the transaction costs and achieve projected economic and operating synergies; |
● | the diversion of financial and management resources from existing operations and potential loss of key personnel; |
● | risks associated with entering new domestic and international markets and conducting operations where we have little or no prior experience; |
● | the possible negative impact of the transaction on our reputation and the reputation of our Dick’s Wings brand; and |
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● | the effect of any limitations imposed by federal and state tax laws on our ability to use all or a portion of our pre-transaction net operating losses against post-transaction income. |
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● | the Fair Labor Standards Act, Immigration Reform and Control Act, and other federal and state laws governing such employment matters as minimum wage requirements, overtime pay, tip credits, healthcare, paid leaves of absence, mandated training, working conditions, payroll taxes, sales taxes, workers’ compensation, union memberships, citizenship requirements and immigration; |
● | federal, state and local laws governing health, sanitation, safety and fire standards, the sale of liquor, zoning, land use, traffic, and environmental and other matters, as well as the acquisition of permits and licenses in connection therewith; |
● | the Americans with Disabilities Act, which is a federal law that prohibits discrimination on the basis of disability in public accommodations and employment, and other federal and state laws governing anti-discrimination, such as the Civil Rights Act and the Age Discrimination Act; |
● | the FTC’s “Franchise Rule” and other federal and state laws that govern the offer and sale of franchises and other aspects of the franchisor-franchisee relationship, including terminations and the refusal to renew franchises; |
● | the FDA’s Food Safety Modernization Act and other federal and state laws that govern nutritional content, nutritional labeling, product safety, menu labeling and other aspects of our restaurants’ operations; |
● | federal and state privacy, consumer protection and other laws; and |
● | in the event we expand our business into international jurisdictions, the foreign law equivalents of each of the above. |
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● | fluctuations in our annual or quarterly operating results; |
● | changes in capital market conditions or other adverse economic conditions; |
● | upgrades or downgrades by securities analysts following our stock; |
● | changes in financial estimates by securities analysts following our stock; |
● | our achievement, or our failure to achieve, projected financial results; |
● | future sales of our stock by our officers, directors and significant stockholders; |
● | investors’ perceptions of our business and prospects relative to other investment alternatives; |
● | significant contracts, acquisitions, joint ventures or capital commitments by our competitors; |
● | global economic, legal and regulatory factors unrelated to our performance; and |
● | the other risks and uncertainties set forth herein under Item 1A. Risk Factors and elsewhere in this report. |
● | increases or decreases in same-store sales; |
● | the timing of new restaurant openings; |
● | our ability to operate effectively in new markets; |
● | the profitability of our restaurants, particularly in new markets; |
● | labor availability and costs for hourly and management personnel; |
● | changes in consumer preferences and competitive conditions; |
● | negative publicity relating to us, our restaurants, our vendors or the products we serve; |
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● | disruptions in the type and delivery of supplies; |
● | consumer confidence and fluctuations in discretionary spending; |
● | changes in labor costs or other variable expenses; |
● | potential distractions or unusual expenses associated with our expansion plans; |
● | the impact of inclement weather, natural disasters, and other calamities; and |
● | economic conditions in the jurisdictions in which we operate and nationally. |
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In April 2012, J. David Eberle, one of our former employees, filed a complaint against us in the Circuit Court, Fourth Judicial Circuit in and for Duval County, Florida, seeking damages for breach of contract, unjust enrichment, promissory estoppel and unpaid wages pursuant to Florida Statute § 448.08. In December 2012, Mr. Eberle filed an amended complaint. We filed a motion to dismiss the amended complaint in February 2013, and Mr. Eberle filed an objection to our motion to dismiss the amended complaint in May 2013. In November 2013, Mr. Eberle filed a second amended complaint. We filed a motion to dismiss the second amended complaint in March 2014, which motion was denied by the court. The matter is not yet set for trial.
In January 2014, Marcia L. Danzeisen, Larry Simpson and M&MSquared, LLC filed a complaint against us in the Circuit Court, Fourth Judicial Circuit in and for Duval County, Florida, seeking damages for breach of contract and unjust enrichment relating to a franchise agreement that we had entered into with them in September 2012. We filed a motion to dismiss the complaint in February 2014. The court has not yet ruled on our motion. The matter is not yet set for trial.
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High | Low | |||
Fiscal Year Ended December 29, 2013 | ||||
Quarter ended March 31, 2013 | $0.84 | $0.35 | ||
Quarter ended June 30, 2013 | $0.77 | $0.42 | ||
Quarter ended September 29, 2013 | $3.01 | $0.49 | ||
Quarter ended December 29, 2013 | $3.00 | $1.05 | ||
Fiscal Year Ended December 30, 2012 | ||||
Quarter ended March 25, 2012 | $0.35 | $0.14 | ||
Quarter ended June 24, 2012 | $0.16 | $0.08 | ||
Quarter ended September 30, 2012 | $1.75 | $0.03 | ||
Quarter ended December 30, 2012 | $2.10 | $0.35 |
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Directors, Executive Officers and Corporate Governance. |
Name | Age | Positions Held | |||||
Richard W. Akam | 58 | Chief Executive Officer, Chief Operating Officer, and Secretary | |||||
Daniel Slone | 44 | Chief Financial Officer | |||||
Fred D. Alexander | 67 | Chairman of the Board | |||||
Ketan B. Pandya | 45 | Director |
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Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | All Other Compensation | Total ($) | |||||||||||||
Richard W. Akam(2) | 2013 | 150,000 | -0- | 99,080 | (6) | 12,000 | (7) | 261,080 | |||||||||||
Chief Executive Officer, Chief Operating Officer and Secretary | |||||||||||||||||||
Daniel Slone(3) | 2013 | $1 | -0- | -0- | -0- | 1 | |||||||||||||
Chief Financial Officer | |||||||||||||||||||
Michael Rosenberger(4) | 2013 | 87,500 | -0- | -0- | 177,500 | (8) | 265,000 | ||||||||||||
Former Chief Executive Officer, Chief Financial Officer and Secretary | 2012 | 150,000 | -0- | -0- | -0- | 150,000 |
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Stock Awards | |||||||||||
Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | ||||||||
Richard W. Akam | 7/22/13 | * | 50,000 | ||||||||
Daniel Slone | -0- | -0- |
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Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percentage of Class (1) | |||||||
Richard W. Akam | 99,862 | 1.6 | % | ||||||
Daniel Slone | 758 | * | |||||||
Fred D. Alexander | -0- | * | |||||||
Ketan B. Pandya | 45,700 | * | |||||||
William D. Leopold II | 2,256,072 | 35.0 | % | ||||||
Michael P. Rosenberger | 653,287 | (2) | 10.1 | % | |||||
Seenu G. Kasturi | 568,188 | (3) | 8.8 | % | |||||
All officers and directors as a group (5 persons) | 799,607 | 12.4 | % |
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Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted- average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||||
Equity compensation plans approved by security holders: | -0- | N/A | -0- | ||||||||||
Equity compensation plans not approved by security holders: | -0- | N/A | 214,287 | ||||||||||
Total | -0- | N/A | 214,287 |
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2013 | 2012 | |||||||
Audit Fees: | $ | 12,500 | $ | 12,500 | ||||
Audit-Related Fees: | --- | --- | ||||||
Tax Fees: | $ | 2,400 | --- | |||||
All Other Fees: | --- | --- | ||||||
Total: | $ | 14,900 | $ | 12,500 |
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● | Report of Independent Registered Public Accounting Firm |
● | Balance Sheets at December 29, 2013 and December 30, 2012 |
● | Statements of Operations for the Years Ended December 29, 2013 |
● | Statements of Stockholders’ Deficit for the Years Ended December 29, 2013 and December 30, 2012 |
● | Statements of Cash Flows for the Years Ended December 29, 2013 and December 30, 2012 |
● | Notes to Financial Statements |
Exhibit No. | Exhibit Description | |||
3.1 | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the registration statement on Form S-1, File No. 333-161792, initially filed with the SEC on September 8, 2009, as amended (the “Registration Statement”)) | |||
3.2 | Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.2 to the Registration Statement) | |||
3.3 | Articles of Amendment to Articles of Incorporation | |||
3.4 | Bylaws (incorporated by reference to Exhibit 3.3 to the Registration Statement) | |||
4.1 | Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement) | |||
10.1+ | Employment Agreement, dated January 22, 2013, between the Company and Richard Akam (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on January 28, 2013) |
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10.2 | Settlement and Release Agreement, dated March 25, 2013, by and among the Company, Bank of America, N.A., Michael P. Rosenberger, Rosalie Rosenberger and Hot Wings Concepts, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on April 12, 2013) | |
10.3 | Voluntary Resignation and Compensation Agreement, With Exclusive Assignment, dated July 12, 2013, by and among the Company, Michael P. Rosenberger and Moose River Management, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on July 18, 2013) | |
10.4 | Consulting Agreement For Term, dated July 12, 2013, by and between the Company and Michael P. Rosenberger (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on July 18, 2013) | |
10.5 | Loan Agreement, dated September 13, 2013, by and between the Company and Blue Victory Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on September 19, 2013) | |
10.6 | Promissory Note, dated September 13, 2013, issued by the Company in favor of Blue Victory Holdings, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on September 19, 2013) | |
10.7 | Consulting Agreement, dated September 13, 2013, by and between the Company and Blue Victory Holdings, Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on September 19, 2013) | |
10.8 | Settlement Agreement and Release, dated November 1, 2013, by and among the Company, Brusta Investments, LLC, and D. Dale Thevenet (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on November 7, 2013) | |
10.9 | Contribution Agreement, dated January 20, 2014, by and between the Company and Paradise on Wings Franchise Group, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on January 24, 2014) | |
10.10 | Amended and Restated Operating Agreement of Paradise on Wings Franchise Group, LLC, dated January 20, 2014, by and among the Company and the other members thereto (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on January 24, 2014) | |
10.11 | Securities Purchase Agreement, dated February 27, 2014, by and between the Company and Seenu G. Kasturi (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on March 5, 2014) | |
10.12 | Promissory Note, dated February 27, 2014, issued by Seenu G. Kasturi in favor of the Company (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on March 5, 2014) | |
10.13+ | Summary of Compensation for Daniel Slone | |
23.1 | Consent of M&K CPAS, PLLC |
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31.1 | Certification of Chief Executive Officer of the registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended | |
31.2 | Certification of Chief Financial Officer of the registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer of the registrant required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
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AMERICAN RESTAURANT CONCEPTS, INC. | |||
Date: March 31, 2014 | By: | /s/ Richard W. Akam | |
Richard W. Akam | |||
Chief Executive Officer |
Signature | Title | Date | |||||
/s/ Richard W. Akam | Chief Executive Officer, Chief Operating Officer and Secretary (Principal Executive Officer) | March 31, 2014 | |||||
Richard W. Akam | |||||||
/s/ Daniel Slone | Chief Financial Officer (Principal Financial and Accounting Officer) | March 31, 2014 | |||||
Daniel Slone | |||||||
/s/ Ketan B. Pandya | Director | March 31, 2014 | |||||
Ketan B. Pandya | |||||||
/s/ Fred D. Alexander | Director | March 31, 2014 | |||||
Fred D. Alexander |
Page | |
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F-5 | |
F-6 | |
F-7 |
F-1 |
F-2 |
December 29, | December 30, | |||||||
2013 | 2012 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 5,062 | $ | 12,358 | ||||
Accounts receivable, net | 8,147 | - | ||||||
Accounts receivable, net – related party | 17,377 | - | ||||||
Notes receivable, current portion | 8,414 | - | ||||||
Notes receivable, current portion – related party | 6,000 | - | ||||||
Total current assets | 45,000 | 12,358 | ||||||
Property and equipment, net of accumulated depreciation of $4,674 at December 29, 2013 and December 30, 2012, respectively | - | - | ||||||
Deposits | 1,100 | - | ||||||
Notes receivable, net of current portion | 7,093 | - | ||||||
Total assets | $ | 53,193 | $ | 12,358 | ||||
Liabilities and stockholders’ deficit | ||||||||
Accounts payable and accrued expenses | $ | 579,130 | $ | 295,931 | ||||
Accrued expenses – related party | 40,066 | 80,108 | ||||||
Accrued interest | 1,255 | 90,502 | ||||||
Settlement agreements payable | 429,815 | 449,763 | ||||||
Notes payable – related party | 127,772 | 72,939 | ||||||
Notes payable – in default | 11,000 | 340,664 | ||||||
Other current liabilities | 801 | - | ||||||
Total current liabilities | 1,189,839 | 1,329,907 | ||||||
Total liabilities | 1,189,839 | 1,329,907 | ||||||
Stockholders’ deficit: | ||||||||
Class A common stock – $0.01 par value: 100,000,000 shares authorized, 5,659,418 and 5,315,506 shares issued and outstanding at December 29, 2013 and December 30, 2012, respectively | 56,594 | 53,155 | ||||||
Additional paid-in capital | 2,340,736 | 1,554,314 | ||||||
Stock subscriptions payable | 139,080 | 90,000 | ||||||
Accumulated deficit | (3,673,056 | ) | (3,015,018 | ) | ||||
Total stockholders’deficit | (1,136,646 | ) | (1,317,549 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 53,193 | $ | 12,358 |
F-3 |
For the Year Ended | ||||||||
December 29, 2013 | December 30, 2012 | |||||||
Revenue: | ||||||||
Net revenue | $ | 472,439 | $ | 393,068 | ||||
Net revenue – related party | 17,377 | 57,878 | ||||||
Total net revenue | 489,816 | 450,946 | ||||||
Operating expenses: | ||||||||
Professional fees | 536,191 | 326,203 | ||||||
Employee compensation expense | 665,084 | 193,064 | ||||||
General and administrative expenses | 240,978 | 191,164 | ||||||
Total operating expenses | 1,442,253 | 710,431 | ||||||
Loss from operations | (952,437 | ) | (259,485 | ) | ||||
Other income / (expense): | ||||||||
Interest expense | (37,776 | ) | (58,979 | ) | ||||
Derivative loss | - | (368 | ) | |||||
Gain on settlement of debt | 320,798 | - | ||||||
Loss on settlement of lawsuit | - | (35,000 | ) | |||||
Other income | 11,377 | - | ||||||
Total other income / (expense) | 294,399 | (94,347 | ) | |||||
Net loss | $ | (658,038 | ) | $ | (353,832 | ) | ||
Net loss per share – basic and fully diluted | $ | (0.12 | ) | $ | (0.07 | ) | ||
Weighted average number of shares outstanding – basic and fully diluted | 5,387,641 | 5,080,256 |
F-4 |
Additional | Stock | |||||||||||||||||||||||
Common Stock | Paid-in | Subscriptions | Accumulated | |||||||||||||||||||||
Shares | Par Value | Capital | Payable | Deficit | Total | |||||||||||||||||||
Balance at December 25, 2011 | 4,784,966 | $ | 47,850 | $ | 1,452,783 | $ | 120,000 | $ | (2,661,186 | ) | $ | (1,040,553 | ) | |||||||||||
Common stock issued for services | 370,572 | 3,705 | 7,968 | - | - | 11,673 | ||||||||||||||||||
Amortization of stock compensation expense | - | - | 37,500 | - | - | 37,500 | ||||||||||||||||||
Common stock issued upon conversion of promissory notes | 117,397 | 1,174 | 15,426 | - | - | 16,600 | ||||||||||||||||||
Common stock issued for stock subscriptions payable | 42,571 | 426 | 29,574 | (30,000 | ) | - | - | |||||||||||||||||
Settlement of derivative liability | - | - | 9,811 | - | - | 9,811 | ||||||||||||||||||
Imputed interest on no-interest loans | - | - | 1,252 | - | - | 1,252 | ||||||||||||||||||
Net loss | - | - | - | - | (353,832 | ) | (353,832 | ) | ||||||||||||||||
Balance at December 30, 2012 | 5,315,506 | $ | 53,155 | $ | 1,554,314 | $ | 90,000 | $ | (3,015,018 | ) | $ | (1,317,549 | ) | |||||||||||
Common stock issued for services | 71,429 | 714 | 49,286 | 49,080 | - | 99,080 | ||||||||||||||||||
Common stock issued upon conversion of promissory notes | 28,572 | 286 | 54,714 | - | - | 55,000 | ||||||||||||||||||
Common stock issued upon conversion of promissory notes – related party | 243,911 | 2,439 | 473,186 | - | - | 475,625 | ||||||||||||||||||
Imputed interest on no-interest loans | - | - | 11,686 | - | - | 11,686 | ||||||||||||||||||
Settlement of related-party debt | - | - | 197,550 | - | - | 197,550 | ||||||||||||||||||
Net loss | - | - | - | - | (658,038 | ) | (658,038 | ) | ||||||||||||||||
Balance at December 29, 2013 | 5,659,418 | $ | 56,594 | $ | 2,340,736 | $ | 139,080 | $ | (3,673,056 | ) | $ | (1,136,646 | ) |
F-5 |
For the Years Ended | ||||||||
December 29, 2013 | December 30, 2012 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (658,038 | ) | $ | (353,832 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
Stock issued for compensation and amortization of stock compensation expense | 99,080 | 49,173 | ||||||
Loss on legal judgment | - | 35,000 | ||||||
Amortization of debt discount | - | 2,023 | ||||||
Change in fair value of derivative liability | - | 368 | ||||||
Imputed interest on no-interest loans | 11,686 | 1,252 | ||||||
Gain on settlement of debt | (320,798 | ) | - | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (8,147 | ) | 2,156 | |||||
Accounts receivable – related party | (17,377 | ) | - | |||||
Notes receivable | (7,500 | ) | - | |||||
Deposits | (1,100 | ) | - | |||||
Accounts payable and accrued liabilities | 294,237 | 84,703 | ||||||
Accrued liabilities – related party | 157,507 | 68,576 | ||||||
Settlement agreements payable | (19,948 | ) | - | |||||
Other current liabilities | 801 | - | ||||||
Net cash used by operating activities | (469,597 | ) | (110,581 | ) | ||||
Cash flows from investing activities | ||||||||
Issuance of notes receivable | (10,507 | ) | - | |||||
Issuance of notes receivable – related party | (6,000 | ) | - | |||||
Repayments of notes receivable | 2,500 | - | ||||||
Net cash used by investing activities | (14,007 | ) | - | |||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of notes payable | - | 50,000 | ||||||
Proceeds from issuance of notes payable – related party | 526,308 | 72,939 | ||||||
Repayments on notes payable | (50,000 | ) | - | |||||
Net cash provided by financing activities | 476,308 | 122,939 | ||||||
Net (decrease) / increase in cash and cash equivalents | (7,296 | ) | 12,358 | |||||
Cash and cash equivalents, beginning of period | 12,358 | - | ||||||
Cash and cash equivalents, end of period | $ | 5,062 | $ | 12,358 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest | $ | - | $ | - | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
Schedule of non-cash financing activities | ||||||||
Settlement of derivative liability | $ | - | $ | 9,811 | ||||
Stock issued upon conversion of notes payable | $ | 55,000 | $ | 16,600 | ||||
Stock issued upon conversion of notes payable – related party | $ | 475,626 | $ | - | ||||
Stock issued for stock subscriptions payable | $ | - | $ | 30,000 | ||||
Settlement of related-party debt | $ | 197,550 | $ | - |
F-6 |
F-7 |
F-8 |
F-9 |
F-10 |
Derivative Financial Instruments
F-11 |
F-12 |
December 29, | December 30, | |||||||
2013 | 2012 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 784,758 | $ | 454,317 | ||||
Deferred tax liabilities | --- | --- | ||||||
Valuation allowance | (784,758 | ) | (454,317 | ) | ||||
Net deferred tax asset | $ | --- | $ | --- |
F-13 |
F-14 |
Total Derivative Liability | ||||
Balance, December 25, 2011 | $ | 9,443 | ||
Increase in derivative value due to issuances of convertible promissory notes | -0- | |||
Promissory notes converted during period | (9,811 | ) | ||
Changes in fair market value of derivative liabilities | 368 | |||
Balance, December 30, 2012 | $ | -0- | ||
Increase in derivative value due to issuances of convertible promissory notes | -0- | |||
Promissory notes converted during period | -0- | |||
Changes in fair market value of derivative liabilities | -0- | |||
Balance, December 29, 2013 | $ | -0- |
F-15 |
Level 1 | Level 2 | Level 3 | ||||||||||
Derivative liabilities – December 29, 2013 | $ | -0- | $ | -0- | $ | -0- | ||||||
Derivative liabilities – December 30, 2012 | $ | -0- | $ | -0- | $ | -0- |
Derivative Liabilities | ||||
Balance, December 25, 2011 | 9,443 | |||
Purchases, sales, issuances and settlements (net) | (9,443 | ) | ||
Balance, December 30, 2012 | $ | -0- | ||
Purchases, sales, issuances and settlements (net) | -0- | |||
Balance, December 29, 2013 | $ | 0- |
F-16 |
F-17 |
F-18 |
Year | Lease Payment | ||||
2014 | $ | 13,200 | |||
2015 | 1,100 | ||||
2016 | -0- | ||||
2017 | -0- | ||||
2018 | -0- | ||||
Thereafter | -0- | ||||
Total | $ | 14,300 |
F-19 |
F-20 |
F-21 |
F-22 |
December 29, | December 30, | |||||||
2013 | 2012 | |||||||
Notes payable – related party | $ | 127,772 | $ | 72,939 | ||||
Notes payable – in default | 11,000 | 340,664 | ||||||
Total notes payable, net | $ | 138,772 | $ | 413,603 |
F-23 |
F-24 |
F-25 |
F-26 |
F-27 |
F-28 |
F-29 |
F-30 |
Exhibit | Exhibit Description | |||
3.3 | Articles of Amendment to Articles of Incorporation | |||
10.13+ | Summary of Compensation for Daniel Slone | |||
23.1 | Consent of M&K CPAS, PLLC | |||
31.1 | Certification of Chief Executive Officer of the registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended | |||
31.2 | Certification of Chief Financial Officer of the registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended | |||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer of the registrant required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended | |||
101.INS* | XBRL Instance Document | |||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |