Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Dec. 31, 2014 | Feb. 15, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Development Capital Group, Inc. | |
Entity Central Index Key | 1517992 | |
Entity Trading Symbol | dlpm | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -28 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 72,542,735 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2015 |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $18,044 | $297,146 |
Marketable securities | 3,724 | |
Prepaid expenses | 163,400 | |
Inventory | 44,624 | 131,854 |
Note receivable | 76,420 | |
Note receivable - related party | 95,745 | 230,365 |
Merchant reserve account | 34,262 | 196,325 |
Total current assets | 192,675 | 1,099,234 |
Fixed assets: | ||
Office equipment, net of accumulated depreciation of $2204 and $818 | 3,447 | 4,538 |
Other assets: | ||
Other assets net amortization of $2218 and $0 | 5,432 | 7,650 |
Deposits held | 4,935 | 4,935 |
Total other assets | 10,367 | 12,585 |
Total assets | 206,489 | 1,116,357 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,708,906 | 1,929,642 |
Accrued interest | 106,090 | 33,821 |
Reserve for returns and allowances | 10,000 | 15,000 |
Convertible notes payable | 603,000 | 603,000 |
Convertible notes payable - related party | 380,000 | 196,988 |
Total current liabilities | 2,807,996 | 2,778,451 |
Contingencies | ||
Total liabilities | 2,807,996 | 2,778,451 |
Stockholders' (deficit): | ||
Common stock, $0.001 par value, 490,000,000 shares authorized, 105,542,735 and 105,542,735 shares issued and outstanding as of December 31, 2014 and March 31, 2014, respectively | 105,543 | 105,543 |
Additional paid in capital | 392,553 | 344,580 |
Accumulated (deficit) | -3,099,603 | -2,112,217 |
Total stockholders' (deficit) | -2,601,507 | -1,662,094 |
Total liabilities and stockholders' (deficit) | $206,489 | $1,116,357 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $2,204 | $818 |
Amortization of other assets | $2,218 | $0 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 490,000,000 | 490,000,000 |
Common stock shares issued | 105,542,735 | 105,542,735 |
Common stock shares outstanding | 105,542,735 | 105,542,735 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | |
Revenue | ||||
Sales, net of allowances | $130,832 | $1,827,587 | $2,075,003 | $609,877 |
Cost of goods sold | 63,522 | 1,120,516 | 1,320,750 | 324,188 |
Gross profit | 67,310 | 707,071 | 754,253 | 285,689 |
Operating expenses: | ||||
Selling expenses | 60,740 | 135,817 | 167,596 | 203,313 |
Promotional and marketing expenses | 2,510 | 997,082 | 1,832,502 | 10,923 |
General and administrative expenses | 13,810 | 45,343 | 70,089 | 622,422 |
Salaries and wages | 110,141 | 177,634 | 187,904 | 363,801 |
Total operating expenses | 187,201 | 1,355,876 | 2,258,091 | 1,200,459 |
Net (loss) from operating activites | -119,891 | -648,805 | -1,503,838 | -914,770 |
Other (expense): | ||||
Interest expense, net | -24,218 | -15,931 | -15,931 | -72,616 |
Total other (expense) | -24,218 | -15,931 | -15,931 | -72,616 |
Provision for income tax | ||||
Net (loss) | ($144,109) | ($664,736) | ($1,519,769) | ($987,386) |
Net loss per share - basic and diluted | $0 | ($0.01) | ($0.02) | ($0.01) |
Weighted average number of common shares outstanding - basic and diluted | 105,542,735 | 85,785,452 | 82,313,204 | 105,542,735 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) | ($1,519,769) | ($987,386) |
Adjustments to reconcile net (loss) to net cash used in operating activities: | ||
Options issued for services | 47,973 | |
Depreciation | 3,604 | |
Changes in operating assets and liabilities: | ||
Decrease in prepaid expenses | -37,500 | 163,400 |
Decrease in inventory | -20,836 | 87,230 |
Decrease in merchant reserve | 162,063 | |
(Increase) in other assets | -1,493 | 3,724 |
(Decrease) in accounts payable | 1,587,243 | -220,736 |
Increase in accrued interest | 75,281 | |
(Decrease) in allowance for returns | -5,000 | |
Net cash used in operating activities | 7,645 | -669,847 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Repayments for notes receivable | 211,040 | |
Purchase of fixed assets | -3,359 | -295 |
Net cash used in investing activities | -3,359 | 210,745 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Cash advance - related party | 2,000 | |
Proceeds from convertible notes payable - related party | 292,860 | 178,000 |
Proceeds from the sale of common stock | ||
Net cash provided by financing activities | 292,860 | 180,000 |
NET CHANGE IN CASH | 297,146 | -279,102 |
CASH AT BEGINNING OF PERIOD | 297,146 | |
CASH AT END OF PERIOD | 279,146 | 18,044 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | ||
Income taxes paid |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||
Dec. 31, 2014 | ||||||
Accounting Policies [Abstract] | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Basis of presentation | ||||||
The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. | ||||||
The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Plan of Operations for the year ended March 31, 2014. | ||||||
Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three and nine months ended December 31, 2014 are not necessarily indicative of results for the full fiscal year. | ||||||
Nature of business | ||||||
The Company was incorporated on September 27, 2010 under the laws of the State of Florida, as Development Capital Group, Inc. The Company has two wholly-owned subsidiaries, Clearance.Co, and Development Tech, Inc. The Company seeks to identify and invest in early-stage technology companies that have the potential to revolutionize traditional industries and transform markets. Clearance.Co, a California corporation, was incorporated on April 22, 2013 (Date of Inception) and is an online retailer offering discount brand name, non-brand name and closeout merchandise for sale on its website to primarily consumers. Development Tech, Inc., a Nevada corporation, operates the website RealtyValuator.com., an application that supports real estate investors by identifying available properties and providing tools to easily evaluate prospective investment properties. | ||||||
On March 31, 2014, the Company completed a reverse merger with privately-held Clearance.Co. In exchange for all of Clearance.Co’s outstanding shares, the Company issued 77,527,735 shares common shares for approximately 73.5% interest in the Company. Clearance.Co’s convertible note obligations totaling $799,988 were also assumed by the Company as part of the transaction. | ||||||
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, and are expressed in U.S. dollars. | ||||||
Year end | ||||||
The Company’s year-end is March 31. | ||||||
Use of estimates | ||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. | ||||||
Cash and cash equivalents | ||||||
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. | ||||||
Concentration of credit risk | ||||||
The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally-insured limit. | ||||||
Stock-based compensation | ||||||
The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. | ||||||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. | ||||||
Fair value of financial instruments | ||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses, bank overdraft and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. | ||||||
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets. | ||||||
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations. | ||||||
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. | ||||||
As of December 31, 2014: | ||||||
Fair Value Measurements | ||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | |||
Assets | ||||||
Notes Receivable | $ - | $ 95,745 | $ - | $ 95,745 | ||
Liabilities | ||||||
Convertible Notes – Related Party | 380,000 | - | 380,000 | |||
Convertible Notes Payable | $ - | $ 603,000 | $ - | $ 603,000 | ||
Inventory | ||||||
Inventories consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition costs, and are stated at the lower of cost, or market determined on the first-in-first-out basis. The Company records a write-down for inventories, which have become obsolete or are in excess of anticipated demand or net realizable value. The Company performs a detailed review of inventory each period that considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If future demand or market conditions for the Company’s products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the Company’s inventory, it may be required to record additional write-downs, which would negatively affect gross margins in the period when the write-downs are recorded. If actual market conditions are more favorable, the Company may have higher gross margins when products incorporating inventory that were previously written down are sold. | ||||||
Property and equipment | ||||||
The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Company’s internal development and construction department. Depreciation periods are as follows: | ||||||
Computer equipment 3 years | ||||||
Furniture and fixtures 7 years | ||||||
Revenue recognition | ||||||
Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collectability is probable. Sales are recorded net of sales discounts. | ||||||
The Company allows refunds for only incorrect items or a damaged or defective item within 15 days of receiving the product. The Company does not honor warranties for damaged or defective items beyond | ||||||
15 days of receiving the product. | ||||||
Advertising and marketing costs | ||||||
The Company expenses all costs of advertising and marketing costs as incurred. Advertising and marketing costs totaled $10,923 and $1,832,502 for the nine months ended December 31, 2014 and for the period of inception (April 22, 2013) to December 31, 2013, respectively. | ||||||
Loss per common share | ||||||
Net loss per share is provided in accordance with ASC Subtopic 260-10. We present basic loss per share (“EPS”) and diluted EPS on the face of the statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. | ||||||
New recent pronouncements | ||||||
The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. There are no new accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
GOING_CONCERN
GOING CONCERN | 9 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN |
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and marketing. As a result, the Company incurred accumulated net losses for the period of inception (April 22, 2013) to December 31, 2014 of $3,099,603. In addition, the Company’s development activities for the period of inception (April 22, 2013) to December 31, 2014 have been financially sustained through convertible debt financing and sales of common stock. | |
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock or through debt financing and, ultimately, the achievement of significant operating revenues and cost control measures. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
NOTES_RECEIVABLE
NOTES RECEIVABLE | 9 Months Ended |
Dec. 31, 2014 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 3 – NOTES RECEIVABLE |
On October 30, 2013, the Company loaned $20,000 to an entity as part of a convertible promissory note with a related party. The entity is a limited liability company owned and controlled by the President of the Company. The note bears interest at 5% per annum and is due the earlier of October 3, 2014 or on the next equity financing raise of at least $200,000. The principal and accrued interest shall be converted at the Company’s option at 30% discount on the price per share of the next equity financing raise. During the three months ended December 31, 2014, the note receivable was distributed to a former officer and director of the Company. | |
On December 19, 2013, the Company loaned $54,500 to an entity as part of a convertible promissory note. The note bears interest at 10% per annum and is due the earlier of June 18, 2014 or upon merger or share exchange with a public entity. The principal and accrued interest shall be converted into 250,000 shares of post-merger shares with a public entity. During the nine months ended December 31, 2014, the Company received repayment of $51,762 and in connections with the merger, the note receivable was distributed to a former officer and director of the Company. | |
On December 30, 2013, the Company loaned $349,097 to an entity controlled by the CEO as part of a non-interest bearing promissory note. The note balance at December 31, 2014 was $95,745. |
INVENTORY
INVENTORY | 9 Months Ended | ||
Dec. 31, 2014 | |||
Inventory Disclosure [Abstract] | |||
INVENTORY | NOTE 4 – INVENTORY | ||
The following is a summary of inventories: | |||
31-Dec-14 | |||
Finished goods | $ 44,624 |
FIXED_ASSETS
FIXED ASSETS | 9 Months Ended | ||
Dec. 31, 2014 | |||
Business Combinations [Abstract] | |||
FIXED ASSETS | NOTE 5 – FIXED ASSETS | ||
The following is a summary of fixed assets: | |||
31-Dec-14 | |||
Computer equipment | $ 5,651 | ||
Less: accumulated depreciation | -2,204 | ||
Fixed assets, net | $ 3,447 | ||
Depreciation expense for the nine months ended December 31, 2014 was $2,218. | |||
CONVERTIBLE_NOTES_PAYABLE_RELA
CONVERTIBLE NOTES PAYABLE - RELATED PARTY | 9 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE- RELATED PARTY | NOTE 6 – CONVERTIBLE NOTES PAYABLE– RELATED PARTY |
On July 8, 2014, the Company executed an unsecured promissory note with a third party for $20,000. The loan is due upon demand and bears 0% interest. | |
On August 18, 2014, the Company executed an unsecured promissory note with a related party for $158,000. The loan is due upon demand and bears 0% interest. |
CONVERTIBLE_NOTES_PAYABLE_LONG
CONVERTIBLE NOTES PAYABLE - LONG TERM | 9 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
CONVERTIBLE NOTES PAYABLE - LONG TERM | NOTE 7 – CONVERTIBLE NOTES PAYABLE – LONG TERM |
On September 1, 2013, the Company executed an unsecured promissory note with a third party for $303,000. The loan bears 12% interest and is due on September 1, 2015 with a balloon payment of principal and accrued interest. The note is convertible into shares of the Company’s common stock at $0.1389 per share. During the nine months ended December 31, 2014, accrued interest expense was $27,270. | |
On December 12, 2013, the Company executed an unsecured promissory note with a third party for $200,000. The loan bears 12% interest and is due on December 12, 2015 with a balloon payment of principal and accrued interest. The note is convertible into shares of the Company’s common stock at $0.1389 per share. During the nine months ended December 31, 2014, accrued interest expense was $18,000. | |
On February 1, 2014, the Company executed an unsecured promissory note with a third party for $300,000. The loan bears 12% interest and is due on February 1, 2016 with a balloon payment of principal and accrued interest. The note is convertible into shares of the Company’s common stock at $0.1389 per share. During the nine months ended December 31, 2014, accrued interest expense was $27,000. |
STOCK_OPTIONS
STOCK OPTIONS | 9 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
STOCK OPTIONS | NOTE 8 – STOCK OPTIONS |
On July 17, 2014, the Company approved and adopted an incentive and nonqualified Stock Option Plan of 2014 and reserved 20,000,000 shares for issuance under the plan. | |
During the nine months ended December 31, 2014, the Company granted 2,000,000 stock options to an officer of the Company. Of the total, 500,000 stock options vested immediately and the remaining 1,500,000 stock options vest quarterly over the next three years. Once the stock options are vested, the individual has two years to exercise at $0.08. The Company recorded compensation of $47,973 for the nine months ended December 31, 2014. |
LEASE_OBLIGATIONS
LEASE OBLIGATIONS | 9 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
LEASE OBLIGATIONS | NOTE 9 – LEASE OBLIGATIONS |
The Company leases its office space under an operating lease agreement that expires August 12, 2014. Future minimum lease payments for the upcoming year through lease expiration are approximately $20,200. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS |
On August 1, 2013, the Company entered into a consulting agreement with an entity that is owned and controlled by the President of the Company which is effective until Mr. Ricard is removed as an officer of the Company. The monthly fee was $5,000. The payments were ceased in May 2014. | |
On August 1, 2013, the Company entered into a consulting agreement with an entity that is a shareholder of the Company which is effective until either party provides 30 days’ notice of termination. The monthly fee was $4,500. The payments were ceased in May 2014. | |
As of December 31, 2014, the Company had notes receivable due a related party limited liability company controlled by the CEO and shareholder totaling $95,745. The note receivable is due upon demand and bears no interest. | |
As of June 30, 2014, the Company had a notes receivable of $20,000 and accrued interest receivable of $660 due from a related party. The related party is a limited liability company owned and controlled by the President of the Company. During the three months ended December 31, 2014, the note receivable was distributed to a former officer and director of the Company. | |
On August 18, 2014, the Company executed an unsecured promissory note with a related party for $158,000. The loan is due upon demand and bears 0% interest. |
MATERIAL_AGREEMENTS
MATERIAL AGREEMENTS | 9 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
MATERIAL AGREEMENTS | NOTE 11 – MATERIAL AGREEMENTS |
On July 29, 2014, the registrant Development Capital Group, Inc. (the “Company”) entered into a separation agreement with its president and director Joseph Ricard, along with his affiliated entities Plum Investors, LLC and Tunebash, Inc., whereby (i) Mr. Ricard resigned as a director and president of the Company, (ii) the consulting agreement with Plum Investors, LLC, dated August 1, 2013, for payment to Mr. Ricard as our president was terminated without liability to the Company, and any amounts owing to Mr. Ricard under the consulting agreement were waived, (iii) the convertible note held by the Company from Tunebash, Inc, was terminated without liability to Tunebash, Inc. and any amounts owed to the Company under such convertible note were waived, and (iv) the Compapy transferred all assets and intellectual property rights in connection with “Realty Valuator” to Mr. Ricard. | |
On July 29, 2014, the Company and Plum Investors, LLC terminated the consulting agreement between the parties dated August 1, 2013. | |
On July 29, 2014, Joseph Ricard, pursuant to the terms of the Settlement Agreement discussed above in Item 1, resigned as the Company’s President and member of the Company’s Board of Directors. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS |
On January 9, 2015, in connection with the resignation of the Company’s officer and director Shahbod Rastegar, the Company entered into (i) a Cancellation of Promissory Note and his wholly owned-entity Metrix360, whereby the Company’s former CEO agreed to cancel 33,000,000 shares of his common stock in exchange for the cancellation of his note receivable in the amount of $95,775. Additionally, the Company entered into a Lock-Up Agreement whereby 6,000,000 shares of Company common stock held by the former officer is subject to certain leak-out provisions over a period of 39 months. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||
Dec. 31, 2014 | ||||||
Accounting Policies [Abstract] | ||||||
Basis of presentation | Basis of presentation | |||||
The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. | ||||||
The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Plan of Operations for the year ended March 31, 2014. | ||||||
Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three and nine months ended December 31, 2014 are not necessarily indicative of results for the full fiscal year. | ||||||
Nature of business | Nature of business | |||||
The Company was incorporated on September 27, 2010 under the laws of the State of Florida, as Development Capital Group, Inc. The Company has two wholly-owned subsidiaries, Clearance.Co, and Development Tech, Inc. The Company seeks to identify and invest in early-stage technology companies that have the potential to revolutionize traditional industries and transform markets. Clearance.Co, a California corporation, was incorporated on April 22, 2013 (Date of Inception) and is an online retailer offering discount brand name, non-brand name and closeout merchandise for sale on its website to primarily consumers. Development Tech, Inc., a Nevada corporation, operates the website RealtyValuator.com., an application that supports real estate investors by identifying available properties and providing tools to easily evaluate prospective investment properties. | ||||||
On March 31, 2014, the Company completed a reverse merger with privately-held Clearance.Co. In exchange for all of Clearance.Co’s outstanding shares, the Company issued 77,527,735 shares common shares for approximately 73.5% interest in the Company. Clearance.Co’s convertible note obligations totaling $799,988 were also assumed by the Company as part of the transaction. | ||||||
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, and are expressed in U.S. dollars. | ||||||
Year end | Year end | |||||
The Company’s year-end is March 31. | ||||||
Use of estimates | Use of estimates | |||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. | ||||||
Cash and cash equivalents | Cash and cash equivalents | |||||
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. | ||||||
Concentration of credit risk | Concentration of credit risk | |||||
The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally-insured limit. | ||||||
Stock-based compensation | Stock-based compensation | |||||
The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. | ||||||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. | ||||||
Fair value of financial instruments | Fair value of financial instruments | |||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses, bank overdraft and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. | ||||||
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets. | ||||||
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations. | ||||||
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. | ||||||
As of December 31, 2014: | ||||||
Fair Value Measurements | ||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | |||
Assets | ||||||
Notes Receivable | $ - | $ 95,745 | $ - | $ 95,745 | ||
Liabilities | ||||||
Convertible Notes – Related Party | 380,000 | - | 380,000 | |||
Convertible Notes Payable | $ - | $ 603,000 | $ - | $ 603,000 | ||
Inventory | Inventory | |||||
Inventories consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition costs, and are stated at the lower of cost, or market determined on the first-in-first-out basis. The Company records a write-down for inventories, which have become obsolete or are in excess of anticipated demand or net realizable value. The Company performs a detailed review of inventory each period that considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If future demand or market conditions for the Company’s products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the Company’s inventory, it may be required to record additional write-downs, which would negatively affect gross margins in the period when the write-downs are recorded. If actual market conditions are more favorable, the Company may have higher gross margins when products incorporating inventory that were previously written down are sold. | ||||||
Property and equipment | Property and equipment | |||||
The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Company’s internal development and construction department. Depreciation periods are as follows: | ||||||
Computer equipment 3 years | ||||||
Furniture and fixtures 7 years | ||||||
Revenue recognition | Revenue recognition | |||||
Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collectability is probable. Sales are recorded net of sales discounts. | ||||||
The Company allows refunds for only incorrect items or a damaged or defective item within 15 days of receiving the product. The Company does not honor warranties for damaged or defective items beyond | ||||||
15 days of receiving the product. | ||||||
Advertising and marketing costs | Advertising and marketing costs | |||||
The Company expenses all costs of advertising and marketing costs as incurred. Advertising and marketing costs totaled $10,923 and $1,832,502 for the nine months ended December 31, 2014 and for the period of inception (April 22, 2013) to December 31, 2013, respectively. | ||||||
Loss per common share | Loss per common share | |||||
Net loss per share is provided in accordance with ASC Subtopic 260-10. We present basic loss per share (“EPS”) and diluted EPS on the face of the statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. | ||||||
New recent pronouncements | New recent pronouncements | |||||
The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. There are no new accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Table) | 9 Months Ended | |||||
Dec. 31, 2014 | ||||||
Accounting Policies [Abstract] | ||||||
Fair value of financial instruments | Fair value of financial instruments | |||||
As of December 31, 2014: | ||||||
Fair Value Measurements | ||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | |||
Assets | ||||||
Notes Receivable | $ - | $ 95,745 | $ - | $ 95,745 | ||
Liabilities | ||||||
Convertible Notes – Related Party | 380,000 | - | 380,000 | |||
Convertible Notes Payable | $ - | $ 603,000 | $ - | $ 603,000 | ||
Depreciation periods are as follows: | Depreciation periods are as follows: | |||||
Computer equipment 3 years | ||||||
Furniture and fixtures 7 years |
INVENTORY_Table
INVENTORY (Table) | 9 Months Ended | ||
Dec. 31, 2014 | |||
Inventory Disclosure [Abstract] | |||
Summary of inventories | The following is a summary of inventories: | ||
31-Dec-14 | |||
Finished goods | $ 44,624 |
FIXED_ASSETS_Table
FIXED ASSETS (Table) | 9 Months Ended | ||
Dec. 31, 2014 | |||
Business Combinations [Abstract] | |||
Summary of fixed assets | The following is a summary of fixed assets: | ||
31-Dec-14 | |||
Computer equipment | $ 5,651 | ||
Less: accumulated depreciation | -2,204 | ||
Fixed assets, net | $ 3,447 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
Assets | ||
Notes Receivable | $95,745 | |
Liabilities | ||
Convertible Notes - Related Party | 380,000 | 196,988 |
Convertible Notes Payable | 603,000 | 603,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Notes Receivable | ||
Liabilities | ||
Convertible Notes - Related Party | ||
Convertible Notes Payable | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Notes Receivable | 95,745 | |
Liabilities | ||
Convertible Notes - Related Party | 380,000 | |
Convertible Notes Payable | 603,000 | |
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Notes Receivable | ||
Liabilities | ||
Convertible Notes - Related Party | ||
Convertible Notes Payable |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 9 Months Ended |
Dec. 31, 2014 | |
ComputerEquipment [Member] | |
Property and equipment | 3 years |
Furniture and fixtures [Member] | |
Property and equipment | 7 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Narrative) (USD $) | 9 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2014 | Mar. 31, 2014 | |
Advertising and marketing costs | $1,832,502 | $10,923 | |
Common Stock Issued | 105,542,735 | 105,542,735 | |
Clearance.Co [Member] | |||
Common Stock Issued | 77,527,735 | ||
Interest Rate of Shares Issued | 73.50% | ||
Convertible Note Obligations | 799,988 |
GOING_CONCERN_Detail_Narrative
GOING CONCERN (Detail Narrative) (USD $) | 20 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated net losses | $3,099,603 |
NOTES_RECEIVABLE_Detail_Narati
NOTES RECEIVABLE (Detail Narative) (USD $) | 1 Months Ended | |||||||
Dec. 19, 2013 | Aug. 18, 2014 | Jun. 08, 2014 | Feb. 01, 2014 | Dec. 30, 2013 | Dec. 12, 2013 | Oct. 30, 2013 | Sep. 01, 2013 | |
Receivables [Abstract] | ||||||||
Loans | $54,500 | $158,000 | $20,000 | $300,000 | $349,097 | $200,000 | $20,000 | $303,000 |
Interest on loan | 10.00% | 0.00% | 0.00% | 12.00% | 0.00% | 12.00% | 5.00% | 12.00% |
Notes receivable | 95,745 | |||||||
Accrued interest receivable | 200,000 | |||||||
Number of converted shares | 250,000 | |||||||
Repayment of receivables | $51,762 | |||||||
Price per share for convertion | 30.00% |
INVENTORY_Details
INVENTORY (Details) (USD $) | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | |
Finished goods | $44,624 |
FIXED_ASSETS_Details
FIXED ASSETS (Details) (USD $) | Dec. 31, 2014 | Mar. 31, 2014 |
Less: accumulated depreciation | ($2,204) | |
Total fixed assets, net | 3,447 | 4,538 |
ComputerEquipment [Member] | ||
Property, Plant and Equipment, Gross | $5,651 |
FIXED_ASSETS_Detail_Narrative
FIXED ASSETS (Detail Narrative) (USD $) | 9 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Depreciation expense | $2,218 |
CONVERTIBLE_NOTES_PAYABLE_RELA1
CONVERTIBLE NOTES PAYABLE- RELATED PARTY (Detail Narratives) (USD $) | Aug. 18, 2014 | Jun. 08, 2014 | Feb. 01, 2014 | Dec. 30, 2013 | Dec. 19, 2013 | Dec. 12, 2013 | Oct. 30, 2013 | Sep. 01, 2013 |
Debt Disclosure [Abstract] | ||||||||
Loans | $158,000 | $20,000 | $300,000 | $349,097 | $54,500 | $200,000 | $20,000 | $303,000 |
Interest on loan | 0.00% | 0.00% | 12.00% | 0.00% | 10.00% | 12.00% | 5.00% | 12.00% |
CONVERTIBLE_NOTES_PAYABLE_LONG1
CONVERTIBLE NOTES PAYABLE - LONG TERM (Detail Narrative) (USD $) | 1 Months Ended | |||||||
Feb. 01, 2014 | Dec. 12, 2013 | Sep. 01, 2013 | Aug. 18, 2014 | Jun. 08, 2014 | Dec. 30, 2013 | Dec. 19, 2013 | Oct. 30, 2013 | |
Notes to Financial Statements | ||||||||
Accrued interest expense | $27,000 | $18,000 | $27,270 | |||||
Loans | $300,000 | $200,000 | $303,000 | $158,000 | $20,000 | $349,097 | $54,500 | $20,000 |
Interest on loans | 12.00% | 12.00% | 12.00% | 0.00% | 0.00% | 0.00% | 10.00% | 5.00% |
Convertible notes price per share | $0.14 | $0.14 | $0.14 |
STOCK_OPTIONS_Detail_Narrative
STOCK OPTIONS (Detail Narrative) (USD $) | 9 Months Ended | |
Dec. 31, 2014 | Jul. 17, 2014 | |
Stock options granted | 2,000,000 | |
Stock options vested | 500,000 | |
Remaining stock options vest | 1,500,000 | |
Stock options vesting period | 3 years | |
Stock options exercise price | $0.08 | |
Compensation | $47,973 | |
2014 Plan [Member] | ||
Shares reserved for issuance | 20,000,000 |
LEASE_OBLIGATIONS_Detail_Narra
LEASE OBLIGATIONS (Detail Narrative) (USD $) | Aug. 12, 2014 |
Debt Disclosure [Abstract] | |
Future minimum lease payments | $20,200 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Detail Narrative) (USD $) | 1 Months Ended | ||||||||||
Aug. 01, 2013 | Dec. 31, 2014 | Aug. 18, 2014 | Jun. 30, 2014 | Jun. 08, 2014 | Feb. 01, 2014 | Dec. 30, 2013 | Dec. 19, 2013 | Dec. 12, 2013 | Oct. 30, 2013 | Sep. 01, 2013 | |
Notes receivable | $95,745 | $20,000 | |||||||||
Accrued interest receivable | 660 | ||||||||||
Loan | 158,000 | 20,000 | 300,000 | 349,097 | 54,500 | 200,000 | 20,000 | 303,000 | |||
Interest on loans | 0.00% | 0.00% | 12.00% | 0.00% | 10.00% | 12.00% | 5.00% | 12.00% | |||
Consulting agreement fee | 4,500 | ||||||||||
Agreement Maturity | The payments were ceased in May 2014 | ||||||||||
President [Member] | |||||||||||
Consulting agreement fee | $5,000 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 9 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Common stock held by officer | 33,000,000 |
Receivable amount in exchange of common stock | $95,775 |
Shares for leak-out provisions | 6,000,000 |