| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of presentation Effective September 29, 2018, following
authorization by its shareholders, the Company withdrew its previous election to be regulated as a BDC under the Investment Company
Act of 1940, as amended, or the 1940 Act. Prior to such time, the Company was a closed-end, non-diversified management
investment company that had elected to be treated as a BDC under the 1940 Act. The Company shall discontinue applying
the guidance in FASB Accounting Standards Codification (ASC) Topic 946 - Financial Services – Investment Company and shall
account for the change in its status prospectively by accounting for its equity investments in accordance with ASC Topics 320
- Investments—Debt and Equity Securities as of the date of the change in status. Additionally, the presentation of the financial
statements will be that of a commercial company rather than that of an investment company. In accordance with ASC 946, the Company
is making this change to it financial reporting prospectively, and not restating periods prior to the Company's change in
status to a non-investment company effective September 29, 2018. Accordingly, in this report, the Company refers to both accounting
in accordance with U.S. generally accepted accounting principles (GAAP) applicable to corporations (Corporation Accounting), which
applies commencing September 29, 2018 and to that applicable to investment companies under the 1940 Act (Investment Company Accounting)
which applies to prior periods. However, pursuant to ASC 205 – Presentation of Financial Statements, Section 205-10-50-1,
"Changes Affecting Comparability", certain amounts in the 2017 financial statements have been reclassified to conform
to the 2018 presentation. These reclassifications primarily effect the presentation of revenues and expenses in the statements
of operations and presentation of assets in the balance sheet. Additionally, the schedules of investments are not presented for
2018 or 2017. The Company determined that there is no cumulative effect of the change from Investment Company Accounting to Corporation
Accounting on periods prior to those presented and that there is no effect on the Company's financial position or results
of operations as a result of this change. In order to maintain its status as a non-investment
company, the Company will now operate so as to fall outside the definition of an "investment company" or within an
applicable exception. The Company expects to continue to operate outside the definition of an "investment company"
as a company primarily engaged in the business of developing and selling apparel products. Going Concern These financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the
normal course of business. As reflected in the accompanying financial statements, the Company had a net loss of $969,463 for the
year ended December 31, 2018. Additionally, the Company had an accumulated deficit of $1,642,510 at December 31, 2018 and
has not generated any revenues under its new business plan. These factors raise substantial doubt about the Company's ability
to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance
that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity
capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the
future. If the Company is unable to raise additional capital or secure additional lending in the near future to fund its business
plan, management expects that the Company will need to curtail its operations. These financial statements do not include any adjustments
related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. Use of Estimates The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Making estimates
requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ
significantly from estimates. Significant estimates during the years ended December 31, 2018 and 2017 include the collectability
of notes receivable, the valuation of the Company's equity investments, amortization period and valuation of intangibles,
the estimates for obsolete inventory, the fair value of assets acquired, assumptions used in assessing impairment of long-term
assets, valuation allowances for deferred tax assets and the fair value of shares issued for assets acquired. Cash and Cash Equivalents The Company considers all highly liquid
investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high
credit quality financial institutions. The Company's accounts at these institutions are insured by the Federal Deposit Insurance
Corporation ("FDIC") up to $250,000 or by the Securities Investor Protection Corporation ("SIPC") up to
$250,000. During 2018 and 2017, the Company had cash balances exceeding the FDIC and SIPC insurance limit on interest bearing accounts.
To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating
of the financial institutions in which it holds deposits. The carrying amounts reported in the balance sheets for cash and cash
equivalents of $336,679 and $294,591 at December 31, 2018 and 2017, respectively, approximate their fair market value based on
the short-term maturity of these instruments. At December 31, 2018 and 2017, the Company had approximately $86,700 and $44,600,
respectively, of cash in excess of FDIC limits. Notes Receivable The Company recognizes an allowance for
losses on notes receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an
analysis of historical bad debt experience, current note receivable aging, and expected future write-offs, as well as an assessment
of specific identifiable accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts
is recognized as general and administrative expense. Inventory Inventory, consisting of finished goods,
are stated at the lower of cost and net realizable value utilizing the first-in, first-out (FIFO) method. A reserve is established
when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value
due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the
cost and the net realizable value. These reserves shall be recorded based on estimates and included in cost of sales. Intangible Assets Intangible assets
are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful lives. Intangible
assets consist of a brand ambassador agreement which was being amortized over a period of one year and trademarks which are recorded
at cost and have an indefinite useful life and are not amortized. For the year ended
December 31, 2018, the Company recorded an impairment loss of $87,745 related to the impairment of the brand ambassador agreement. Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company
reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets
may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted
future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between
the asset's estimated fair value and its book value. At December 31, 2018, based on management's impairment analysis,
the Company wrote off the remaining unamortized carrying value of its intangible asset related to the brand ambassador agreement,
management determined that there was a significant adverse change in the extent or manner in which this long-lived asset was being
used. Securities Transactions Securities transactions
are recorded on a trade date basis. Securities transactions outside conventional channels, such as private transactions, are
recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale,
and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively. The Company records
interest and dividend income on an accrual basis to the extent that the Company expects to collect such amounts. Commissions and
other costs associated with transactions involving securities, including legal costs, are included in the cost basis of purchases
and deducted from the proceeds of sales. Equity Investments,
at Cost Equity investments,
at cost of $12,766 at December 31, 2018, comprised mainly of non-marketable capital stock and stock warrants, are recorded at cost,
as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically. Prior to September 29,
2018, equity investments, at cost were recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation.
The fair value of equity investments, at cost that had no ready market were determined in good faith by the Board of Directors,
based upon the financial condition and operating performance of the underlying investee companies as well as general market trends
for businesses in the same industry. Included in the equity investments, at fair value were non-marketable securities of $467,066
at December 31, 2017. Equity Investments, at Fair Value Through September
29, 2018, on a quarterly basis, the Board of Directors of the Company (the "Board"), in good faith, determined the
fair value of equity investments, at fair value in the following manner: Equity securities which are listed on a
recognized stock exchange are valued at the adjusted closing trade price on the last trading day of the valuation period. For equity
securities that carry a restriction inherent to the security, a restriction discount is applied, as appropriate. Investments in
warrants are valued at fair value using the Black-Scholes option pricing model. Investments in securities which are convertible
at a date in the future are valued assuming a full conversion into common shares and valued based on the methodology for equity
securities described above, or at the respective investment's face value, whichever is a better indicator of fair value.
Investments in unlisted securities are valued using a market approach net of the appropriate discount for lack of marketability. Investments without a readily determined
market value were primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market
approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or
liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash
flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations
about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair
value pricing the Company's investments include, as relevant: available current market data, including relevant and applicable
market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions,
information rights, the nature and realizable value of any collateral, the portfolio company's ability to make payments,
its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios
of peer companies that are public, M&A comparables, and enterprise values, among other factors. Because there is not a readily available
market value for some of the investments in its portfolio, the Company valued certain of its portfolio investments at fair value
as determined in good faith by the Board, as described herein. Due to the inherent uncertainty of determining the fair value of
investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate
from period to period. Additionally, the fair value of the Company's investments differed significantly from the values that
would have been used had a readily available market existed for such investments and may differ materially from the values that
the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or
otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a
forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it. Subsequent to September 29, 2018, pursuant
to ASC 320 – Investments – Debt and Equity Securities, the Company categorizes its equity investments, fair value as
an available for sale security since there is an active market in such equity investment. Available for sale securities are carried
at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a
specific identification basis and are included in other income (expense). The Company reviews equity investments for impairment
whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. Net Realized
Gain or Loss and Net Change in Unrealized Appreciation or Depreciation of Equity Investments, at Fair Value Realized gain
or loss is recognized when an investment is disposed of and is computed as the difference between the Company's cost basis
and the net proceeds received from such disposition. Realized gains and losses on investment transactions are determined
by specific identification. Net change in unrealized appreciation or depreciation is computed as the difference between the fair
value of the investment and the cost basis of such investment, including any reversal of previously recorded unrealized appreciation/depreciation
when gains or losses are realized. Revenue Recognition The Company applies Accounting Standards
Update ("ASU") 2014-09 and ASC Topic 606, Revenue from Contracts with Customers The Company records interest and dividend
income on an accrual basis to the extent that the Company expects to collect such amounts. Income Taxes Through March 31, 2017, the Company elected
to be treated as a RIC under Subchapter M of the Code and operated in a manner so as to qualify for the tax treatment applicable
to RICs. At March 31, 2017, the Company failed this
diversification test since the Company's investment in IPSIDY INC. (formerly ID Global Solutions Corporation) ("IDTY")
accounted for over 25% of the Company's total assets. This discrepancy was not caused by the acquisition of any security.
The failure was not a result of willful neglect. The Company did not cure its failure to retain its status as a RIC and the Company
does not intend to seek to obtain RIC status again. Accordingly, beginning in 2017, the Company is subject to income taxes at corporate
tax rates. The loss of the Company's status as a RIC did not have any impact on the Company's financial position or
results of operations. Distributions from net investment income
and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those
amounts determined in accordance with U.S. GAAP. These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, they are charged or credited to paid-in-capital in excess of par or accumulated net realized
loss, as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable
to differences in the tax characterization of income or loss and any non-deductible expenses. These differences are generally determined
in conjunction with the preparation of the Company's annual tax returns. Beginning in 2017, deferred income tax
assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities,
as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and
liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they
relate. Deferred tax assets and liabilities 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. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be realized. On December 22, 2017, President Trump signed
into law the Tax Cuts and Jobs Act (the "Act"), a tax reform bill which, among other items, reduces the current federal
income tax rate to 21% from 34%. The rate reduction is effective January 1, 2018, and is permanent. The Act has caused the Company's
deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted
through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 ("SAB 118"), as of
December 31, 2017, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably
estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred
tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates
due to the Company's continued analysis or further regulatory guidance that may be issued as a result of the Act. Net (Loss) Income per Common Share Basic (loss) income per share is computed
by dividing net (loss) income available to common shareholders by the weighted average number of shares of common stock outstanding
during each period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted
average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period
using the as-if converted method. Potentially dilutive securities which included convertible preferred shares are excluded from
the computation of diluted shares outstanding if they would have an anti-dilutive impact on the Company's net losses. The
following table presents a reconciliation of basic and diluted net (loss) income per share:
Year Ended December 31,
2018 2017
(Loss) Income per common share - basic:
Net (loss) income allocated to common stockholders $ (969,463 ) $ 356,536
Weighted average common shares outstanding - basic 49,101,419 50,082,441
Net (loss) income per common share - basic $ (0.02 ) $ 0.01
(Loss) Income per common share - diluted:
Net (loss) income allocated to common shareholders - basic $ (969,463 ) $ 356,536
Numerator for (loss) income per common share - diluted $ (969,463 ) $ 356,536
Weighted average common shares outstanding - basic 49,101,419 50,082,441
Effect of dilutive securities:
Convertible preferred stock - 2,000,000
Weighted average common shares outstanding – diluted 49,101,419 52,082,441
Net (loss) income per common share - diluted $ (0.02 ) $ 0.01 The following potentially dilutive shares
have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive for the year ended
December 31, 2018:
December 31, December 31,
Convertible preferred stock 2,000,000 - New Accounting Pronouncements Accounting
standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a
material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated
to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
