Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Aug. 31, 2014 | Oct. 15, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Brisset Beer International, Inc. | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Aug-14 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001495648 | ' |
Current Fiscal Year End Date | '--05-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 2,670,500 |
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 | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONSOLIDATED_BALANCE_SHEETS_Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Aug. 31, 2014 | 31-May-14 |
Current Assets | ' | ' |
Cash | $45,163 | $15,652 |
Refunds Receivable | 1,392 | 1,418 |
Prepaid Expenses | 764 | 300 |
Total Current Assets | 47,319 | 17,370 |
Goodwill (note 5) | 25,000 | 25,000 |
Total Assets | 72,319 | 42,370 |
Current Liabilities | ' | ' |
Accounts Payable and Accrued Liabilities | 6,860 | 9,432 |
Amount Due Under Asset Purchase Agreement | ' | 12,500 |
Total Current Liabilities | 6,860 | 21,932 |
Stockholders' Equity | ' | ' |
Common Stock, Par Value $.0001 Authorized 500,000,000 shares, 2,670,500 and 2,120,500 shares issued and outstanding at August 31, 2014 and May 31, 2014 respectively | 267 | 212 |
Paid-In Capital | 1,256,880 | 1,236,788 |
Warrants | 43,853 | 9,000 |
Accumulated Deficit | -1,237,263 | -1,227,521 |
Accumulated Other Comprehensive Income | 1,722 | 1,959 |
Total Stockholders' Equity | 65,459 | 20,438 |
Total Liabilities and Stockholders' Equity | $72,319 | $42,370 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Aug. 31, 2014 | 31-May-14 |
Parentheticals | ' | ' |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 500,000,000 | 500,000,000 |
Common Stock, shares issued | 2,670,500 | 2,120,500 |
Common Stock, shares outstanding | 2,670,500 | 2,120,500 |
CONSOLIDATED_STATEMENT_OF_OPER
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
Aug. 31, 2014 | Aug. 31, 2013 | |
Expenses | ' | ' |
Professional Expenses | $4,543 | $1,737 |
Office and Sundry | 4,684 | 2,507 |
Rent | 515 | 450 |
Management and Directors' Fees | ' | 0 |
Total Expenses | 9.742 | 4,694 |
Net Loss Before Discontinued Operations | -9,742 | -4,694 |
Loss from Discontinued Operations | ' | -291 |
Net Loss | -9,742 | -4,985 |
Basic and Diluted Loss Per Share | ' | ' |
Continuing Operations | $0 | ($0.01) |
Discontinued Operations | $0 | $0 |
Weighted Average Shares Outstanding | 2,234,087 | 620,500 |
Net Loss. | -9,742 | -4,985 |
Other Comprehensive (Loss) Income | ' | ' |
Translation to US dollar presentation currency | -237 | 1,039 |
Comprehensive Loss | ($9,979) | ($3,946) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Aug. 31, 2014 | Aug. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net Loss. | ($9,742) | ($4,985) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities | ' | ' |
Accretion Expense | ' | 291 |
Asset Retirement Obligation | ' | -170 |
Change in Operating Assets and Liabilities | ' | ' |
Decrease (Increase) In Refunds Receivable | 26 | -12 |
Decrease (Increase) in Prepaid Expenses | -464 | 461 |
Increase (Decrease) in Accounts Payable | -2,572 | -3,577 |
Net Cash Used in Operating Activities | -12,752 | -7,992 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Decrease in Amounts due under Assett Purchase Agreement | -12,500 | ' |
Net Cash Used in Investing Activities | -12,500 | ' |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from the Sale of Units | 55,000 | ' |
Net Cash Provided by Financing Activities | 55,000 | ' |
Effect of exchange rate changes on cash | -237 | 1,039 |
Net (Decrease) Increase in Cash and Cash Equivalents | 29,511 | -6,953 |
Cash and Cash Equivalents at Beginning of Period | 15,652 | 51,077 |
Cash and Cash Equivalents at End of Period | 45,163 | 44,124 |
Cash paid during the year for: | ' | ' |
Interest | 0 | 0 |
Income taxes | $0 | $0 |
NATURE_OF_BUSINESS_AND_OPERATI
NATURE OF BUSINESS AND OPERATIONS | 3 Months Ended |
Aug. 31, 2014 | |
NATURE OF BUSINESS AND OPERATIONS | ' |
NATURE OF BUSINESS AND OPERATIONS | ' |
NOTE 1 – NATURE OF BUSINESS AND OPERATIONS | |
Organization and Basis of Presentation | |
Brisset Beer International, Inc. (the “Company”) was incorporated in the state of Florida on May 11, 2010 under the name Benefit Solutions Outsourcing Corp. | |
On May 19, 2011 the Board of Directors and the majority shareholder of the Company approved a change to the Company’s Articles of Incorporation which affected a 17 for one forward stock split of our issued and outstanding common stock, changed the name of the company to “Buckeye Oil & Gas, Inc.”, and changed the business of the Company to oil and gas exploration. The changes became effective at the close of business on June 1, 2011. The forward stock split was distributed to all shareholders of record on March 31, 2011. No cash was paid or distributed as a result of the forward stock split and no fractional shares were issued. All fractional shares which would otherwise be required to be issued as a result of the stock split were rounded up to the nearest whole share. There was no change in the par value of our common stock. | |
On April 4, 2014, the Company entered into an Asset Purchase Agreement with Scenario A, a private Quebec corporation, to purchase all assets relating to the product known as “Broken 7”, a craft beer locally brewed in Montreal, Quebec, Canada. Under the Asset Purchase Agreement, the Company agreed to acquire Broken 7 for $25,000 payable in two installments to Scenario A with $12,500 to be paid at closing and $12,500 to be paid 60 business days after the closing date of April 7, 2014 (second installment payment due date is July 3, 2014). The Company’s principal executive officer, Stephane Pilon, also serves as Scenario A’s President. The Corporation’s Secretary and director, Pol Brisset, also serves as Scenario A’s Vice-President. Mr. Pilon and Mr. Brisset are majority owners of Scenario A. The Company made the first payment of $12,500 on closing. The Company and Scenario A have amended the original agreement such that the due date of the second payment of $12,500 has been extended an additional 30 business days to August 15, 2014. On August 14, 2014 the Company made the second payment. | |
On May 21, 2014, the Company received a written consent in lieu of a meeting of shareholders (the “Written Consent”) from the holders of 1,561,000 shares of common stock representing, at that time, 73.62% of our issued and outstanding common shares. The Written Consent adopted resolutions which authorized the Company to act on a proposal to change the Company’s state of incorporation from Florida to Nevada by the merger of Buckeye Oil & Gas, Inc. with and into its wholly-owned subsidiary, Brisset Beer International, Inc. Brisset Beer International, Inc., is a Nevada corporation. As result of the merger, the name of the Company was changed from Buckeye Oil & Gas, Inc. to “Brisset Beer International, Inc.” and the jurisdiction was changed from Florida to Nevada. The changes became effective at the close of business on July 24, 2014. | |
The accompanying financial statements have been prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States on a going concern basis. | |
Nature of Operations | |
The Company was formerly a company engaged in the acquisition and exploration of oil and gas properties. As a result of the current status of the properties, and due to the limited resources available to the Company, the Company has abandoned its interests in its two oil and gas properties. | |
As a result of the Company’s management having experience in the brewing business, the Company has acquired the rights to Broken 7 which is a craft beer brewed in the province of Quebec, Canada. The Company will be engaged principally in the marketing of Broken 7 as it is our intention to contract all brewing and distribution activities to third-party service providers. We operate in a single segment which is the craft beer market. Our craft beer consists of single brand known as Broken 7 and is currently brewed, distributed, and marketed solely in Quebec, Canada. | |
Interim Reporting | |
In the opinion of management the unaudited condensed consolidated financial information furnished herein reflects all adjustments, consisting of normal and recurring adjustments that are necessary to fairly state the financial position of Brisset Beer International. Inc. and the results of its operations for the periods presented. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended May 31, 2014. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the fiscal year ended May 31, 2014 has been omitted. The results of operations for the three month period ended August 31, 2014 are not necessary indicative of results for the entire year ending May 31, 2015 or for any future annual or interim period. |
ABILITY_TO_CONTINUE_AS_A_GOING
ABILITY TO CONTINUE AS A GOING CONCERN | 3 Months Ended |
Aug. 31, 2014 | |
ABILITY TO CONTINUE AS A GOING CONCERN | ' |
ABILITY TO CONTINUE AS A GOING CONCERN | ' |
NOTE 2 – ABILITY TO CONTINUE AS A GOING CONCERN | |
The accompanying financial statements have been prepared in US dollars and in accordance with accounting principles generally accepted in the United States (“GAAP”) on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has only recently commenced its craft beer operations. During the three months ended August 31, 2014 the Company has incurred net losses of $9,742 and the Company expects losses to continue until it can achieve profitable operations from its craft beer operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. | |
We will be required to expend substantial amounts of working capital in order to brew, distribute and market our Broken 7 brand of craft beer. Our operations to date have been funded entirely from capital raised from our private offering of securities from May 2010 through August 2014. We are entirely dependent on our ability to attract and receive additional funding from either the sale of securities or outside sources such as private investment or a strategic partner. We currently have no firm agreements or arrangements with respect to any such financing and there can be no assurance that any needed funds will be available to us on acceptable terms or at all. The inability to obtain sufficient funding of our operations in the future will restrict our ability to grow and reduce our ability to continue to conduct business operations. Our failure to raise additional funds will adversely affect our business operations, and may require us to suspend our operations, which in turn may result in a loss to the purchasers of our common stock. After auditing our May 31, 2014 financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital. If we are unable to obtain necessary financing, we will likely be required to curtail our development plans which could cause us to become dormant. Any additional equity financing may involve substantial dilution to our then existing stockholders. | |
The Company's ability to continue as a going concern is dependent on its ability to brew, distribute, and market our craft beer and ultimately achieve profitable operations and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable. Management may seek additional capital through a private placement and public offering of its common stock. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||
Aug. 31, 2014 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Management’s Estimates and Assumptions | |||
The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and notes. Significant areas requiring the use of estimates relate to accrued liabilities, asset retirement obligation, and the impairment of long-lived assets. Management believes the estimates utilized in preparing these financial statements are reasonable and prudent and are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results could differ from those estimates. | |||
Cash and Cash Equivalents | |||
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. | |||
Reclassification | |||
A reclassification has been made to prior year comparative consolidated financial statements to conform to the current year presentation. This reclassification had no material effect on previously reported results of operations or financial position. The Company reclassified the amount of other comprehensive loss from net loss in the consolidated balance sheet and on the face of the consolidated statement of operations and comprehensive loss. | |||
Foreign Currency | |||
The functional currency of the Company at August 31 and May 31, 2014 is the Canadian dollar. Transactions that are denominated in a foreign currency are re-measured into the functional currency at the current exchange rate on the date of the transaction. Any foreign currency denominated monetary assets and liabilities are subsequently re-measured at current exchange rates, with gains or losses recognized as foreign exchange losses or gains in the statement of operations. Nonmonetary assets and liabilities are translated at historical exchange rates. Expenses are translated at average exchange rates during the period. Exchange gains and losses are included in statement of operations for the period. | |||
Adjustments arising from the translation of the Company’s financial statements to United States dollars for presentation purposes due to differences between average rates and balance sheet rates are recorded in other comprehensive income. | |||
Concentration of Credit Risk | |||
The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains all of its cash balances with two financial institutions in the form of demand deposits. | |||
Loss per Share | |||
Income or loss per share is calculated based on the weighted average number of common shares outstanding. Diluted loss per share does not differ from basic loss per share since the effect of the Company’s warrants are anti-dilutive. Diluted income per share is calculated using the treasury stock method which uses the weighted average number of common shares outstanding during the period and also includes the dilutive effect of potentially issuable common shares from outstanding and warrants. At August 31, 2014, potential common shares of 4,100,000 (2013 - nil) related to outstanding share purchase warrants were excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive. | |||
Comprehensive Income | |||
In accordance with ASC 220, “Comprehensive Income” (“ASC 220”) all components of comprehensive income, including net loss, are reported in the financial statements in the period in which they are recognized. Comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and other comprehensive (income) loss, including foreign currency translation adjustments, are reported, net of any related tax effect, to arrive at comprehensive income. No taxes were recorded on items of other comprehensive income. | |||
Income Taxes | |||
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||
Uncertain Tax Positions | |||
The Company adopted the provisions of ASC 740-10-50, formerly FIN 48, Accounting for Uncertainty in Income Taxes. The Company had no material unrecognized income tax assets or liabilities for the year ended May 31, 2014 or for the year ended May 31, 2013. The Company’s policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the year ended May 31, 2014 and 2013, there were no income tax, or related interest and penalty items in the income statement, or liability on the balance sheet. The Company files income tax returns in the U.S. federal jurisdiction and Florida State. Tax years 2011 to present remain open to income tax examination. The Company is not currently involved in any income tax examinations. | |||
Fair Value of Financial Instruments | |||
The book values of cash, prepaid expenses, and accounts payable approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: | |||
• | Level one — Quoted market prices in active markets for identical assets or liabilities; | ||
• | Level two — Inputs other than level one inputs that are either directly or indirectly observable; and | ||
• | Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. | ||
Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter. | |||
Goodwill | |||
Pursuant to its agreement with Scenario A, the Company has acquired all rights to Broken 7, a craft beer brewed in Quebec, Canada. The assets acquired consist of goodwill as no inventory or other assets were acquired. The Company accounts for this assets under ASC No. 350, Intangibles—Goodwill and Other which states that goodwill and intangible assets with indefinite useful lives should not be amortized, but instead tested for impairment at the reporting unit level at least annually or more frequently if circumstances indicate possible impairment. The Company tests for impairment annually in the fourth quarter of the fiscal year. If impairment exists, a write-down to fair value (measured by discounting estimated future cash flows) is recorded. | |||
Impairment of Long-lived Assets | |||
In accordance with ASC 360, Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. | |||
In accordance with ASC 350 Intangibles – Goodwill and Other the Company performs a qualitative assessment at the end of each reporting period to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount. | |||
Revenue recognition | |||
Revenue from the Company’s craft beer business is expected to be received in the form of commissions. The Company intends to contract out services to a single supplier for brewing, labeling and distribution. The Company does not yet have a contract in place for such services but once in place it is expected that the supplier will deliver beer to vendors on behalf of the Company, collect the proceeds from sale, and then pay the Company the respective commission. Revenue will be recorded at the time of delivery to the customer. The method of calculating, and the amount, of the commission payable to the Company is still to be negotiated. | |||
Recent Accounting Pronouncements | |||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. | |||
ASU 2014-10 Topic 915 Development Stage Entities | |||
The objective of the guidance is to reduce cost and complexity in the financial reporting system by eliminating inception-to-date information from the financial statements of development stage entities. The new standard eliminates the concept of a development stage entity (“DSE”) from U.S. GAAP. Therefore, the current incremental reporting requirements for a DSE, including inception-to-date information, will no longer apply. This standard is effective for annual reporting periods beginning after December 15, 2014. The Company has elected to early adopt this guidance effective with its May 31, 2014 consolidated financial statements. |
DISCONTINUED_OPERATIONS_OIL_AN
DISCONTINUED OPERATIONS OIL AND GAS PROPERTY INTERESTS (Unproven) | 3 Months Ended |
Aug. 31, 2014 | |
DISCONTINUED OPERATIONS OIL AND GAS PROPERTY INTERESTS (Unproven) | ' |
DISCONTINUED OPERATIONS OIL AND GAS PROPERTY INTERESTS (Unproven) | ' |
NOTE 4 – DISCONTINUED OPERATIONS | |
The Company was formerly engaged in the exploration for oil and gas in Alberta, Canada. The two properties have not ever produced any significant quantities of oil or gas and the properties do not have any known reserves or resources. In addition due to the limited resources available to the Company, the Company has abandoned its interests in its two oil and gas properties. As of May 31, 2014, the Company discontinued its operations in the oil and gas industry. As a result, the Company has recognized $291 as discontinued operations for the three months ended August 31, 2013. |
GOODWILL
GOODWILL | 3 Months Ended |
Aug. 31, 2014 | |
INTANGIBLE ASSETS | ' |
INTANGIBLE ASSETS | ' |
NOTE 5 – GOODWILL | |
Broken 7 | |
On April 4, 2014, the Company entered into an Asset Purchase Agreement with Scenario A, a private Quebec corporation, to purchase all assets relating to the product known as “Broken 7”, a craft beer locally brewed in Montreal, Quebec, Canada. Under the Asset Purchase Agreement, the Company agreed to acquire Broken 7 for $25,000 payable in two installments to Scenario A with $12,500 to be paid at closing and $12,500 to be paid 60 business days after the closing date of April 7, 2014 (second installment payment due date is July 3, 2014). The purchase was of the Broken 7 trademark and recipe. We have valued the trademark and recipe at minimal value and have therefore accounted for the entire purchase as goodwill. The Company’s principal executive officer and director, Stephane Pilon, also serves as Scenario A’s President. The Corporation’s Secretary and director, Pol Brisset, also serves as Scenario A’s Vice-President. Mr. Pilon and Mr. Brisset are majority owners of Scenario A. The Company made the first payment of $12,500 on closing. The Company and Scenario A have amended the original agreement such that the due date of the second payment of $12,500 has been extended an additional 30 business days to August 15, 2014. On August 14, 2014 the Company made the second payment. The fair value of Broken 7 is measured by level three hierarchy of fair value of financial instruments. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | ||||||||||||||||
Aug. 31, 2014 | |||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
NOTE 6 – STOCKHOLDERS’ EQUITY | |||||||||||||||||
Shares of common stock outstanding | Common stock | Additional paid-in capital | Warrants | ||||||||||||||
Balance – May 31, 2014 | 2,120,500 | 212 | 1,236,788 | 9,000 | |||||||||||||
Issuance of units | 550,000 | 55 | 20,092 | 34,853 | |||||||||||||
Balance – August 31, 2014 | 2,670,500 | 267 | 1,256,880 | 43,853 | |||||||||||||
Stock Splits | |||||||||||||||||
Effective July 8, 2013, the Company and the Board of Directors of the Company adopted resolutions to effectuate a reverse split of its issued and outstanding shares of common stock on the basis of 1 post consolidation share for each 100 pre-consolidation shares. All share and per share amounts in the condensed consolidated financial statements of the Company have been adjusted to reflect the reverse split. | |||||||||||||||||
Issuance of Units | |||||||||||||||||
On August 12, 2014, the Company completing a financing issuing 550,000 units at $0.10 per unit for total proceeds of $55,000. Each unit consist of one share of common stock, one A warrant, and one B warrant. The A warrant is exercisable at a price of $0.15 per warrant until August 12, 2019 and each B warrant is exercisable at a price of $0.25 per warrant until August 12, 2020. The units were issued pursuant to Regulation S of the Securities Act of 1993. | |||||||||||||||||
The warrants included in the units have been fair valued using the Black Scholes model. The fair value of the warrants was determined using the following assumptions: dividend rate – 0%; volatility - 141%; risk free rate - 0.07%; and a term of five or six years. Based on their fair value the warrants have been assigned a value of $34,853. | |||||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Aug. 31, 2014 | |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 7 – RELATED PARTY TRANSACTIONS | |
The Company does not yet have a service agreement in place for its current principal executive officer, Stephane Pilon. As a result of the Company not undertaking significant operations year-to-date, management has not been compensated. Current management has agreed to forgo any cash compensation until such time the Company has the resources to pay compensation. | |
The Company’s Asset Purchase Agreement was executed with Scenario A. The Company’s principal executive officer and director, Stephane Pilon, also serves as Scenario A’s President. The Corporation’s Secretary and director, Pol Brisset, also serves as Scenario A’s Vice-President. Mr. Pilon and Mr. Brisset are majority owners of Scenario A. The Company has made total payments of $25,000 to Scenario A under the Asset Purchase Agreement. | |
ACCOUNTING_POLICIES_Policies
ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||
Aug. 31, 2014 | |||
ACCOUNTING POLICIES | ' | ||
Management's Estimates and Assumptions | ' | ||
Management’s Estimates and Assumptions | |||
The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and notes. Significant areas requiring the use of estimates relate to accrued liabilities, asset retirement obligation, and the impairment of long-lived assets. Management believes the estimates utilized in preparing these financial statements are reasonable and prudent and are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results could differ from those estimates. | |||
Cash and Cash Equivalents Policy | ' | ||
Cash and Cash Equivalents | |||
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. | |||
Reclassification | ' | ||
Reclassification | |||
A reclassification has been made to prior year comparative consolidated financial statements to conform to the current year presentation. This reclassification had no material effect on previously reported results of operations or financial position. The Company reclassified the amount of other comprehensive loss from net loss in the consolidated balance sheet and on the face of the consolidated statement of operations and comprehensive loss. | |||
Foreign Currency | ' | ||
Foreign Currency | |||
The functional currency of the Company at August 31 and May 31, 2014 is the Canadian dollar. Transactions that are denominated in a foreign currency are re-measured into the functional currency at the current exchange rate on the date of the transaction. Any foreign currency denominated monetary assets and liabilities are subsequently re-measured at current exchange rates, with gains or losses recognized as foreign exchange losses or gains in the statement of operations. Nonmonetary assets and liabilities are translated at historical exchange rates. Expenses are translated at average exchange rates during the period. Exchange gains and losses are included in statement of operations for the period. | |||
Adjustments arising from the translation of the Company’s financial statements to United States dollars for presentation purposes due to differences between average rates and balance sheet rates are recorded in other comprehensive income. | |||
Concentration of Credit Risk | ' | ||
Concentration of Credit Risk | |||
The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains all of its cash balances with two financial institutions in the form of demand deposits. | |||
Loss per Share | ' | ||
Loss per Share | |||
Income or loss per share is calculated based on the weighted average number of common shares outstanding. Diluted loss per share does not differ from basic loss per share since the effect of the Company’s warrants are anti-dilutive. Diluted income per share is calculated using the treasury stock method which uses the weighted average number of common shares outstanding during the period and also includes the dilutive effect of potentially issuable common shares from outstanding and warrants. At August 31, 2014, potential common shares of 4,100,000 (2013 - nil) related to outstanding share purchase warrants were excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive. | |||
Comprehensive Income, Policy | ' | ||
Comprehensive Income | |||
In accordance with ASC 220, “Comprehensive Income” (“ASC 220”) all components of comprehensive income, including net loss, are reported in the financial statements in the period in which they are recognized. Comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and other comprehensive (income) loss, including foreign currency translation adjustments, are reported, net of any related tax effect, to arrive at comprehensive income. No taxes were recorded on items of other comprehensive income. | |||
Income Taxes Policy | ' | ||
Income Taxes | |||
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||
Uncertain Tax Positions | ' | ||
Uncertain Tax Positions | |||
The Company adopted the provisions of ASC 740-10-50, formerly FIN 48, Accounting for Uncertainty in Income Taxes. The Company had no material unrecognized income tax assets or liabilities for the year ended May 31, 2014 or for the year ended May 31, 2013. The Company’s policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the year ended May 31, 2014 and 2013, there were no income tax, or related interest and penalty items in the income statement, or liability on the balance sheet. The Company files income tax returns in the U.S. federal jurisdiction and Florida State. Tax years 2011 to present remain open to income tax examination. The Company is not currently involved in any income tax examinations. | |||
Fair Value of Financial Instruments | ' | ||
Fair Value of Financial Instruments | |||
The book values of cash, prepaid expenses, and accounts payable approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: | |||
• | Level one — Quoted market prices in active markets for identical assets or liabilities; | ||
• | Level two — Inputs other than level one inputs that are either directly or indirectly observable; and | ||
• | Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. | ||
Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter. | |||
Goodwill Policy | ' | ||
Goodwill | |||
Pursuant to its agreement with Scenario A, the Company has acquired all rights to Broken 7, a craft beer brewed in Quebec, Canada. The assets acquired consist of goodwill as no inventory or other assets were acquired. The Company accounts for this assets under ASC No. 350, Intangibles—Goodwill and Other which states that goodwill and intangible assets with indefinite useful lives should not be amortized, but instead tested for impairment at the reporting unit level at least annually or more frequently if circumstances indicate possible impairment. The Company tests for impairment annually in the fourth quarter of the fiscal year. If impairment exists, a write-down to fair value (measured by discounting estimated future cash flows) is recorded. | |||
Impairment of Long-lived Assets | ' | ||
Impairment of Long-lived Assets | |||
In accordance with ASC 360, Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. | |||
In accordance with ASC 350 Intangibles – Goodwill and Other the Company performs a qualitative assessment at the end of each reporting period to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount. | |||
Revenue recognition | ' | ||
Revenue recognition | |||
Revenue from the Company’s craft beer business is expected to be received in the form of commissions. The Company intends to contract out services to a single supplier for brewing, labeling and distribution. The Company does not yet have a contract in place for such services but once in place it is expected that the supplier will deliver beer to vendors on behalf of the Company, collect the proceeds from sale, and then pay the Company the respective commission. Revenue will be recorded at the time of delivery to the customer. The method of calculating, and the amount, of the commission payable to the Company is still to be negotiated. | |||
New Accounting Pronouncements | ' | ||
Recent Accounting Pronouncements | |||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. | |||
ASU 2014-10 Topic 915 Development Stage Entities | |||
The objective of the guidance is to reduce cost and complexity in the financial reporting system by eliminating inception-to-date information from the financial statements of development stage entities. The new standard eliminates the concept of a development stage entity (“DSE”) from U.S. GAAP. Therefore, the current incremental reporting requirements for a DSE, including inception-to-date information, will no longer apply. This standard is effective for annual reporting periods beginning after December 15, 2014. The Company has elected to early adopt this guidance effective with its May 31, 2014 consolidated financial statements. |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | ||||||||||||||||
Aug. 31, 2014 | |||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||||||||
Shares of common stock outstanding | Common stock | Additional paid-in capital | Warrants | ||||||||||||||
Balance – May 31, 2014 | 2,120,500 | 212 | 1,236,788 | 9,000 | |||||||||||||
Issuance of units | 550,000 | 55 | 20,092 | 34,853 | |||||||||||||
Balance – August 31, 2014 | 2,670,500 | 267 | 1,256,880 | 43,853 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation (Details) (USD $) | 21-May-14 | Apr. 04, 2014 |
Organization and Basis of Presentation | ' | ' |
Purchase price under the Asset Purchase Agreement | ' | $25,000 |
Amount of first installment to Scenario A to be paid at closing of the Asset Purchase Agreement | ' | 12,500 |
Amount of Second installment to Scenario A to be paid 60 business days after the closing date of the Asset Purchase Agreement | ' | $12,500 |
Received a written consent from the holders of shares | 1,561,000 | ' |
Percentage of issued and outstanding common shares represented by holders of shares | 73.62% | ' |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | 3 Months Ended |
Aug. 31, 2014 | |
GOING CONCERN: | ' |
Net loss for the Period | $9,742 |
Results_of_Discontinued_operat
Results of Discontinued operations (Details) (USD $) | 3 Months Ended |
Aug. 31, 2014 | |
Results of Discontinued operations | ' |
The Company has recognized an amount as discontinued operations | $291 |
GOODWILL_Details
GOODWILL (Details) (USD $) | Apr. 04, 2014 |
INTANGIBLE ASSETS DETAILS | ' |
Asset Purchase Agreement, the Company agreed to acquire Broken 7 payable in two installments | $25,000 |
Installments to Scenario A to be paid at closing | 12,500 |
Installments to Scenario A to be paid 60 business days after the closing date of April 7, 2014 (second installment) | $12,500 |
Changes_in_Stockholders_equity
Changes in Stockholders equity (Details) | Shares of common stock outstanding | Common stock | Additional paid-in capital | Warrants |
Balance at May. 31, 2014 | 2,120,500 | 212 | 1,236,788 | 9,000 |
Issuance of units | 550,000 | 55 | 20,092 | 34,853 |
Balance at Aug. 31, 2014 | 2,670,500 | 267 | 1,256,880 | 43,853 |
COMMON_STOCK_SHARE_TRANSACTION
COMMON STOCK SHARE TRANSACTIONS (Details) (USD $) | Aug. 12, 2014 |
COMMON STOCK SHARE TRANSACTIONS: | ' |
Closed a direct offering for the issuance common shares | 550,000 |
Issuance of Units at a price | $0.10 |
Issuance of Units for aggregate gross proceeds | $55,000 |
A warrant is exercisable at a price | $0.15 |
B warrant is exercisable at a price | $0.25 |
Fair_value_of_warrants_determi
Fair value of warrants determined using following assumptions (Details) (USD $) | 3 Months Ended |
Aug. 31, 2014 | |
Fair value of warrants determined using following assumptions: | ' |
Dividend rate | 0.00% |
Volatility | 141.00% |
Risk free rate | 0.07% |
Term of years | 5 |
Warrants have been assigned a value | $34,853 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | Apr. 04, 2014 |
RELATED PARTY TRANSACTIONS CONSISTS OF THE FOLLOWING: | ' |
The Company has made total payments of to Scenario A under the Asset Purchase Agreement. | $25,000 |